Retirement
Government slammed for ‘tax grabbing’ low-income super proposal
A proposal floated by government that would see workers earning less than $50,000 a year able to opt out of compulsory super has been slammed as nothing more than a tax grab.
Government slammed for ‘tax grabbing’ low-income super proposal
A proposal floated by government that would see workers earning less than $50,000 a year able to opt out of compulsory super has been slammed as nothing more than a tax grab.
The idea is being considered as part of the federal government’s Retirement Income Review, which is looking at the “three pillars” of Australia’s existing retirement system: the means-based Age Pension, compulsory superannuation and voluntary savings.
Floated by Liberal senator Andrew Bragg, the proposal would see workers earning less than $50,000 able to opt out of compulsory super and instead receive the amount of money that would have gone into their super account in wages instead.
Industry Super Australia (ISA) has weighed in on the idea, noting that while the idea is being touted by some as a pay boost for low-income workers, “the numbers make it clear the real winner is the government, with workers left paying higher taxes to line government coffers”.
Wages are taxed at a higher rate than super contributions, with ISA indicating that this is almost double in most cases.
According to the industry body, it means that workers who take super as wages will raid their retirement savings only to pay more tax.
To highlight its point, it has released analysis that shows “the extent of the super tax grab” in Tasmania.
ISA said 102,500 Tasmanian workers would be affected by the proposal, which would see them losing a total of $350 million a year in retirement savings, while also being slugged an extra $101 million in personal tax.
This equates to around $1,000 more in tax payable for the average worker each year.
Commenting on the issue, ISA chief executive Bernie Dean slammed the “dangerous proposal”.
“Tasmanian workers will be slugged more than 100 million more in tax every year, only to end up destitute in retirement.”
Arguing that “the numbers don’t lie”, Mr Dean called it “a blatant tax grab by the government to prop up its own budget bottom line, at the expense of hardworking Tasmanians’ retirement savings”.
About the author
About the author
Superannuation
Super reforms to save members thousands but should go further
The “Your Future, Your Super” reforms announced during the federal budget are heading in the right direction, with members potentially benefiting, an industry expert has said. ...Read more
Superannuation
Australia slips in global pension index
The Australian superannuation system has been rated at B, falling to fourth place, new research has revealed. ...Read more
Superannuation
Early super payments slow to under $200m
Less than $200 million was paid out of the super system in the second week of October, as the popularity of the government’s early release scheme looks to be slowing further following the release of...Read more
Superannuation
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown. ...Read more
Superannuation
1.2m Australians lose in tax offset lag
The Treasury’s latest tax cuts will see more than 1.2 million low-income earners paying a higher rate of tax on their superannuation contributions, with funds arguing changing the tax rate could add...Read more
Superannuation
Could you be stuck in a poor-performing fund?
The government’s superannuation reforms to eliminate multiple superannuation accounts could have unintended consequences, with older Australians locked into financial decisions made by their teenage...Read more
Superannuation
Big super pushes for gender parity
One of Australia’s largest superannuation funds has launched an investor-led initiative that will see women fill at least 40 per cent of the executive roles in the ASX 200 over the next decade. ...Read more
Superannuation
Why it is ‘cruel’ and ‘embarrassing’ not to raise the SG
Australian workers, who are bearing the brunt of the public decision to shut down the economy, could be “cruelly rewarded” for their sacrifice with a less dignified retirement, industry experts ...Read more
Superannuation
Super reforms to save members thousands but should go further
The “Your Future, Your Super” reforms announced during the federal budget are heading in the right direction, with members potentially benefiting, an industry expert has said. ...Read more
Superannuation
Australia slips in global pension index
The Australian superannuation system has been rated at B, falling to fourth place, new research has revealed. ...Read more
Superannuation
Early super payments slow to under $200m
Less than $200 million was paid out of the super system in the second week of October, as the popularity of the government’s early release scheme looks to be slowing further following the release of...Read more
Superannuation
‘Impressive’ super erases most COVID-19 losses
Australian superannuation has erased most of the COVID-19 downturn following a positive September quarter, new research has shown. ...Read more
Superannuation
1.2m Australians lose in tax offset lag
The Treasury’s latest tax cuts will see more than 1.2 million low-income earners paying a higher rate of tax on their superannuation contributions, with funds arguing changing the tax rate could add...Read more
Superannuation
Could you be stuck in a poor-performing fund?
The government’s superannuation reforms to eliminate multiple superannuation accounts could have unintended consequences, with older Australians locked into financial decisions made by their teenage...Read more
Superannuation
Big super pushes for gender parity
One of Australia’s largest superannuation funds has launched an investor-led initiative that will see women fill at least 40 per cent of the executive roles in the ASX 200 over the next decade. ...Read more
Superannuation
Why it is ‘cruel’ and ‘embarrassing’ not to raise the SG
Australian workers, who are bearing the brunt of the public decision to shut down the economy, could be “cruelly rewarded” for their sacrifice with a less dignified retirement, industry experts ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
