The current superannuation tax concessions are neither sustainable nor fair, according to KPMG.
In a submission to Treasury's consultation on the objective of superannuation, KPMG recommended several changes to the concessional tax treatment of super.
“Concessional tax treatment within superannuation recognises the fact that Australians forego wages which are invested in the system,” the accounting firm said.
There has been “much discussion” of the current concessional arrangements and it is generally recognised that the arrangements are “not sustainable or fair”, KPMG's submission said.
“The system has matured sufficiently that the goal of increasing national savings no longer need be a primary motivation driving decision-making.”
Consequently, a number of changes to the system are justified, KPMG said, adding that super should remain compulsory and be used exclusively for retirement.
First, the annual income threshold at which the 15 per cent tax rate applies to concessional superannuation contribution (currently $300,000) should be reduced.
Second, non-concessional caps should be reduced from the existing $180,000, and the ability to bring forward three years' worth of non-concessional contributions should be “restricted”, KPMG said.
Finally, KPMG repeated its call for the introduction of a lifetime limit to the amounts individuals can maintain within the superannuation system (including SMSFs).
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