Super Review looked at the views of the major federal political parties on what will be the big issues for superannuation in 2004 and their answers and statements suggest that while they are prepared to change many of the constructs, they are not keen to significantly tamper with the tax elements.
ASFA played the tax cuts card in late January when it launched a high-profile national advertising campaign and released the results of a survey revealing that superannuation is increasingly becoming a first line issue for key segments of the electorate.
One of the key findings of the survey is that whereas it had been previously acknowledged that super tended to be a priority for those over 40, those as young as 30 now see it as a positive issue.
ASFA CEO Philippa Smith hopes the survey’s findings will have the effect of encouraging the major parties to review their approach to super and particularly the taxation aspects.
“The ageing of our population and pressures this brings means that it is critical to encourage disciplined long-term savings for individual well-being, the strength of our economy and the stability of future generations,” she says.
“Apart from the family home, super is the major, and often only, savings for ordinary Australians,” Smith says.
“Because of super, the situation for low and middle income earners is improving but we need to build super savings if we are to meet the individual and national challenges of the future. Both government and individuals need to act now — this mustn’t be allowed to slip from the agenda.”
Despite ASFA’s call for a review of the tax structures applying to superannuation and the Federal Opposition’s earlier indications that it would be prepared to lower the contributions tax, the Government has stuck to the broad policy position outlined by the Assistant Treasurer and Minister for Revenue, Senator Helen Coonan, when she addressed the ASFA Conference in November, last year.
What is more, Coonan found her position strengthened when, just days before the ALP national conference, the Opposition acknowledged that it was not in a position to specifically reconfirm its commitment to reduce the contributions tax.
Coonan says Labor abandoned its proposed cut in contributions tax because it relied on a $700 million ‘saving’ that doesn’t exist.
“Despite being part of lengthy debate about the Government’s super reform package, the Opposition has only just realised you can’t make a cost ‘saving’ from money that is already out there benefiting Australian workers,” she says.
Signalling that the Government will not be shifting ground on the taxation regime currently applying to superannuation, Coonan says, “the Government provides substantial tax concessions to superannuation — worth $11.2 billion in 2003-04 and the average Australian worker will have an estimated 40 per cent more in retirement by investing money in superannuation.”
“The Government is supportive of policies that can produce significant increases in retirement income, build the nation’s wealth and produce better retirement outcomes for Australian workers — policies such as the Government’s co-contribution scheme,” she says.
However, a spokesperson for the Opposition spokesman on Retirement Incomes, Nick Sherry, says a cut to the contributions tax remains firmly on the agenda, albeit that it is currently subject to a costings review.
“It would be wrong to say that it is set in concrete, but it is definitely still on the agenda,” she says.
