Retirement
Opt-out super mere ‘tax grab in disguise’
NSW workers would be slugged an extra $1.3 billion in tax per year if the radical plan to scrap compulsory superannuation for low-paid workers was approved.
Opt-out super mere ‘tax grab in disguise’
NSW workers would be slugged an extra $1.3 billion in tax per year if the radical plan to scrap compulsory superannuation for low-paid workers was approved.
Industry Super Australia (ISA) has calculated the figures in response to the proposition put forward by backbench Coalition MPs that would allow workers paid less than $50,000 to opt out of superannuation and take the money as wages.
The ISA said the average NSW resident who is earning less than $50,000 would be hit with a tax bill of $1,000 a year more as a result of any changes.
It also pointed out that workers in the federal electorates of Sydney, North Sydney, Grayndler and Kingsford Smith would be hit the hardest by the extra tax.
This is because wages are taxed at a higher rate than super contributions, ISA pointed out, which is more than double in most cases.
It expects more than 1.3 million people to be affected if the plan was to go ahead.
It’s reportedly being considered as part of the current Retirement Income Review.
As well as seeing low-paid workers losing money to tax, the plan would “demolish” the retirement savings of affected individuals, ISA has indicated.
“A 30-year-old working mum earning $50,000, who takes time out to raise children, would lose almost $300,000 from her super at retirement and pay more than $61,000 extra in tax,” it said.
Similarly, it highlighted that “a 30-year-old man on $50,000 – who has a continuous career – will lose a staggering $533,000 from their retirement savings and be lumped with an extra $113,000 tax bill over his working life”.
Industry Super Australia chief executive Bernie Dean called the proposal “dangerous” and said it would condemn more than 1 million NSW workers to poverty in retirement.
“The numbers don’t lie. Opt-out super is a blatant tax grab that would be used to prop up the government’s budget bottom line, at the expense of hardworking NSW workers’ retirement savings,” he stated.
Calling it bad for the economy and bad for NSW, Mr Dean said “local NSW MPs need to call out this proposal for what it is or explain to their constituents why they support them paying more tax for no gain”.
About the author
About the author
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. ...Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. ...Read more
Superannuation
Total value of Aussie super funds increases
KPMG has released the findings from a new review. ...Read more
Superannuation
Super returns fall into the red for FY22
Unless a recovery takes place in the coming weeks, super funds will experience their fifth negative financial year since the introduction of compulsory super. ...Read more
Superannuation
Could the Super Home Buyer Scheme ‘torpedo’ Aussie super savings?
Industry Super Australia has argued that the scheme would force funds to hold more cash. ...Read more
Superannuation
Super fund returns at risk of being negative for this financial year
With two months to go in the current financial year, super funds are only just in the black. ...Read more
Superannuation
Some Aussies are missing out on $17k in super every year
A report has found that hundreds of thousands of Aussies are at a significant financial disadvantage, foregoing $175,000 in super on average by retirement age. ...Read more
Superannuation
APRA chair says 'good enough isn't good enough' for super sector
Wayne Byres discussed the sector at a FINSIA event. ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. ...Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. ...Read more
Superannuation
Total value of Aussie super funds increases
KPMG has released the findings from a new review. ...Read more
Superannuation
Super returns fall into the red for FY22
Unless a recovery takes place in the coming weeks, super funds will experience their fifth negative financial year since the introduction of compulsory super. ...Read more
Superannuation
Could the Super Home Buyer Scheme ‘torpedo’ Aussie super savings?
Industry Super Australia has argued that the scheme would force funds to hold more cash. ...Read more
Superannuation
Super fund returns at risk of being negative for this financial year
With two months to go in the current financial year, super funds are only just in the black. ...Read more
Superannuation
Some Aussies are missing out on $17k in super every year
A report has found that hundreds of thousands of Aussies are at a significant financial disadvantage, foregoing $175,000 in super on average by retirement age. ...Read more
Superannuation
APRA chair says 'good enough isn't good enough' for super sector
Wayne Byres discussed the sector at a FINSIA event. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
