Abbott slams Rudd on contributions cap

Henry review dependent on SG hike

By Roy Emery
Wed 24 Mar 2010

The opposition leader has accused the Rudd government of creating uncertainty in the industry following its decision to wind back the contribution caps.

Opposition Leader Tony Abbott has slammed the Rudd government for winding back the amount income earners can contribute to their super.

"The Rudd government has wound back incentives we [the Howard government] offered people to save for their retirement," Abbott said. 

"From July 2009 the Rudd government has, first, reduced the concessional contributions cap from $50,000 to $25,000. Second, the government has reduced by one third the maximum amount of superannuation co-contributions," Abbott told InvestorDaily.

While not specifically committing to return the contributions cap to $50,000 Abbott made it clear that he rejected Labor's move, saying it  reduces the incentive for income earners to build a retirement nest egg.

"People will only save if they are confident in their economic environment. The Rudd government has generated much economic uncertainty because of its arbitrary spending plans. The arbitrary cut in the maximum concessional contribution level has left many taxpayers ... with potential tax liabilities. This hardly generates confidence in the consistency of the superannuation system," Abbott said.

Abbott said he would wait for the Henry and Cooper reviews before formalising the Coalition's plans regarding a possible increase in the super guarantee levy from 9 per cent to 15 per cent. 

"The opposition supports a fair and effective superannuation system. In terms of specific policy, we are reserving our judgement until the government releases the Henry review of taxation and the Cooper review of superannuation. Both these reports will inform our policies on saving before the election," Abbott said.

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