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ASFA warns on tax
The Association of Superannuation Funds of Australia (ASFA) last month used the Warburton Hendy tax report to warn the Federal Government that Australia has become uncompetitive with other major developed countries when it comes to providing savings incentives.
In a statement issued in the week following the Government’s receipt of the Warburton Hendy report, ASFA said Australia needed to bring its savings incentives up to at least the level of the majority of OECD countries.
ASFA said that while the Warburton Hendy Report had suggested that methodological and data differences had made international comparisons difficult, ASFA had been able to analyse one of the international studies cited by the report, and conducted its own separate analysis based on super tax concessions in other OECD countries.
ASFA chief executive said ASFA’s closer analysis of one of the studies cited by the Warburton Hendy Report discovered flaws.
“ASFA found that in comparison with contemporary personal tax rates and actual income tax rates applying to retirees, taxes on super in Australia are no longer significantly concessional,” Smith said.
“The reduction in Australia’s marginal tax rates in recent years, while perfectly sound policy, has nevertheless reduced incentives for saving,” she said. “For many individuals, the extent of this reduction in tax incentives has been 10 cents or more in every dollar contributed.”
AUTHOR
Mike Taylor
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