The federal Budget has failed to address the inequities within the superannuation system, namely the tax concessions afforded to wealthier Australians, says Good Super.
Current tax concessions for superannuation cost roughly $30 billion per year, an amount that is not sustainable for future generations, said Good Super managing director Andrew MacLeod.
“Continuing generous advantages in super taxation incentives, largely benefiting the baby boomer generation, are continuing what is now being called ‘intergenerational theft’," said Mr MacLeod.
He argued that concessions should end after an objective retirement capital level is met – he himself favours an end to tax concessions for superannuation balances over $1.8 million – and proposed that this be calculated using the average weekly earnings to interest rate ratio.
“While tax concessions for young and low-income people makes sense to encourage better retirements savings, it makes no sense to give tax concessions to the 'uber-wealthy' when government tax revenues are as tight as today’s,” he said.
Mr MacLeod said retirement should be funded by Australians, not the $40 billion per year pension system, “which is a safety net not a comfort net”.
“Rather than fund tomorrow’s retirement for the wealthy, we should fund today’s infrastructure for the younger generations,” he said.
“With this Budget, the government has shown that they cannot lead the discussion [on superannuation]. It is time for the super industry to stand up and lead,” he said.
The superannuation system “is a system designed to both relieve long-term pressure on the budget and provide a minimum retirement lifestyle for all Australians – not a luxury lifestyle for some”, Mr MacLeod said.
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