High-income earners will have to wait longer for relief from the super surcharge.
The Government’s attempt to pass the Superannuation (Surcharge Rate Reduction) Amendment Bill 2003 through the Senate last month was shot down by Labor, which branded the proposal “a blatantly unfair tax cut” exclusively benefiting only five per cent of working Australians.
The bill proposed to reduce the maximum 15 per cent surcharge rate by 1.5 per cent over three years, and would have reduced surcharge rates by one 10th of their current levels.
Labor Shadow Minister for Retirement Incomes and Savings Senator Nick Sherry put a motion forward, which was also defeated, to withdraw the bill or amend it to cut the contributions tax for all Australians.
However, Minister for Revenue and Assistant Treasurer Helen Coonan disagrees with statements that the bill is simply a tax cut for the rich. She says: “Higher income earners will still be paying significantly higher rates of tax and surcharge once this measure has been passed than other income earners.”
Meanwhile, the co-contributions bill, which involves the Government matching voluntary super contributions for people earning under $20,000 up to $32,000, was also not passed by Parliament, despite support from other parties.
According to Michaela Anderson, director of policy and research at the Association of Superannuation Funds of Australia, this Bill will benefit second income earners with a high-income spouse, but anyone earning below $20,000 without a rich partner is unlikely to have the money to make voluntary contributions.
The Australian Democrats’ superannuation spokesman Senator John Cherry says he supported the co-contribution legislation because the highest priority is to restore confidence in super, especially for low and middle-income earners.
