Just a week out from the Federal Budget, Industry Super Australia (ISA) is calling for a retargeting of superannuation tax concessions, claiming the existing regime is fuelling a super gap between men and women.
ISA chief executive, David Whiteley has released new research commissioned by his organisation and claimed that the existing structure of tax concessions is outdated because it is catering to full-time breadwinners in high paying jobs rather than a growing share of the workforce that works part-time.
“For example, tax breaks are paying the equivalent of an overseas holiday each year for the average male in the top tax bracket, who makes an annual tax saving of $14,314 with a super balance of $508,000,” he said.
Whiteley claimed that, by comparison, for a female working part time in her mid-40s and juggling work and family, the current arrangements delivered just $435 a year, on average, in tax benefits with an average super balance of $65,000.
“Fresh data from the Australian Taxation Office shows for the first time how superannuation tax breaks are not offering enough help to people who need it most, while enabling those with super-sized balances to accumulate even greater wealth,” he said
“We have a clear view of how the tax settings for super have failed to keep pace with the changing nature of work. The tax settings are a product of last century. They work very well for a full-time male breadwinner, but do a poor job of boosting the super of part-time workers — most of whom are women.”
The ISA chief executive said the 2016 Budget needed to address the disparity between men and women .
“ISA calls on all political parties to use the 2016 Budget to guarantee all Australians receive tax concessions on mandatory super savings through retaining the LISC [lower income super contribution] or an alternative. This can be achieved at no cost to the Budget by paring back billions in generous concessions for those with higher levels of super already.
“This reform is a fair and rational policy response that would put the super system back on track to fulfil is objective of ensuring Australians are financially secure in retirement and reduce future pressure on the age pension.
“If we don’t modernize now, the system will fail to allow the majority of our daughters to achieve this standard for decades to come, no matter how hard-working, educated, or skilled they are.”
