The Federal Treasurer, Scott Morrison has continued his mantra of ensuring superannuation is not used as an estate planning and tax minimisation device, while introducing the exposure draft legislation around the second tranche of the Government Budget superannuation changes.
The Treasurer’s formal statement said the changes contained in the exposure draft were intended to make the system fairer and more sustainable and he continued to insist that the majority of Australians – 96 per cent of individuals with superannuation – would be either better off or unaffected.
According to Morrison’s statement the second tranche of the Exposure Drafts includes legislative amendments to:
- Implement the Government’s $1.6 million transfer balance cap, which places a limit on the amount an individual can hold in the tax-free retirement phase;
- Make the taxation of concessional superannuation contributions more sustainable, by lowering the concessional contributions cap to $25,000 per year and reducing the income threshold at which individuals are required to pay an additional 15 per cent contributions tax, from $300,000 to $250,000;
- Provide greater flexibility for those with broken work patterns by allowing individuals with balances of less than $500,000 to “carry forward” unused concessional cap space for up to five years;
- Encourage the development of innovative retirement income products to provide more choice and flexibility for retirees;
- Ensure that transition to retirement income streams are accessed for the purpose for which they were designed and not for tax minimisation;
- Abolish the out-dated anti-detriment provision, which effectively result in a refund of a member’s lifetime superannuation contributions tax payments into an estate; and
- Apply commensurate treatment for these measures to defined benefit schemes and constitutionally protected funds.
According to Morrison, the Government remains on track to have the measures introduced into the Parliament before the end of the year.
The exposure draft is open to submissions and comment from stakeholders until 10 October.
Mike
Your usage of ‘mantra’ in reference to preempt the abuse of super seems pejorative: mindless repetition, blind faith, following the command from a higher power and untested by reality?
Super can never sustain building the grand kids’ Oxbridge escapades, as it is being financed by the near-invisible average taxpayer groaning under the pressure of unfunded age pensions, less wealthy than those who can game the rules.
The Government deserves praise for this overdue vision, long after Keating’s compulsory super, undoing the damage of Howard Costello tax-free super post 60, regardless of size.
A bit more neutral language would be appropriate. I have a natural advantage as a Brahmin well-versed in several original Sanskrit mantras, I should know!
Ramani