New Analysis Of Impact Of Proposed Superannuation Tax
The Financial Services Council (FSC) has released new data that shows the full impact of the proposed superannuation tax on different age cohorts of Australians under four different scenarios.
The FSC has built on its previous modelling to inform negotiations between the Government, the Greens and the Opposition on the final design of the superannuation tax.
The four scenarios modelled by the FSC include:
Ultimately, the decision on whether to index the proposed tax will have a significant impact on younger Australians and is critical to the overall fairness of the measure. The total cumulative impact on Australians under the four different scenarios include:
CEO of the FSC Blake Briggs said: “The Government will set the tone for how it intends to govern in its second term by deciding whether to listen to broad consumer, industry and economists’ feedback on how the current design of its superannuation tax is unfair to future generations of Australians.
“The superannuation industry recognises the Government has the capacity to force the new tax through the Parliament with the support of the Greens but encourages the two parties to take a more constructive and consultative approach.
“The Financial Services Council encourages the Government to consult on options that would not unfairly target future generations of Australian superannuation consumers and undermine confidence in our retirement system by introducing a new, contentious tax on unrealised capital gains.
“The superannuation industry recognises there is merit to ensuring the superannuation system remains fair and fiscally sustainable, however the Government’s current approach risks undermining consumer confidence in Australia’s retirement system by changing the goal posts on current and future retirees who, until now, have played by the rules.
“The FSC is concerned that the absence of indexation is a deliberate and cynical design feature of the new tax, that targets younger Australians, in full knowledge that Australia’s deteriorating financial position means future governments will be too cash strapped to introduce indexation at a later stage,” Mr Briggs concluded.
Table 1. Impact of three superannuation tax policy scenarios on different age cohorts.
Data Source
– ATO Taxation statistics 2019-20 Individuals:
Superannuation contributions, by total superannuation member accounts balance range, taxable income range and age range, 2019-20 financial year.
Assumptions
https://fsc.org.au/news/media-release/media-release-fsc-new-analysis-of-the-impact-of-proposed-superannuation-tax