CA ANZ said the proposed changes regarding the $3 million super tax pose a risk to future generations and is calling on the government to “strongly consider the unintended consequences of introducing these changes without indexation”.
“The ‘changing of the goalposts’ would right now double the tax payable on superannuation for around 80,000 Australians who have followed the rules at all times,” CA ANZ said in a statement.
“And because they are not indexed, they set a tax trap which will capture more and more people in the future.”
The Financial Services Council estimates that up to half a million Australians aged in their 20s and 30s could be impacted by the changes by the time they retire, while CA ANZ forecasts that a current 25-year-old young professional earning $95,000 per year will be $90,000 worse off in retirement as a result of the changes.
CA ANZ superannuation and financial services leader, Tony Negline, said these changes will unfairly impact people who are in, or approaching retirement, while also being a tax trap for young players.
“We are urging parliamentarians to either pause, reject or amend this legislation – because it would be unjust to pass the Bill in its current version,” he said.
Mr Negline highlighted numerous recent changes to superannuation rules, encompassing restrictions on investment amounts, the $1.6 million limit for after-tax contributions, and the introduction of a threshold mandating a 30 per cent tax, instead of the usual 15 per cent, for individuals earning over $250,000.
“It is our duty to make sure that amendments to legislation are fair and balanced – and these latest amendments deeply concern us,” Mr Negline said.
I am surprised that the CA ANZ say that the tax will see a doubling of tax for individuals that have followed the rules all along. In mine and my husband’s case it is more than a tripling of the tax because of the taxing of unrealised capital gains, even taking into account the thresholds. It irks me that the government says that it is a doubling of the tax and to see that the professional body for Chartered Accountants in Australia also refer to a doubling in many cases is a narrow view of the effects of this tax. Of course, there are many over the $3m threshold who may not pay any extra tax. This is the whole inequity of the formula – a calculation based on paper profits that may never actually materialise, and to rub salt into the wound, the ATO will never refund the over-paid taxes.
So much for having a fair go! And all along we have only done what we have been encouraged to do by our own government, and worked within the system that now sees it fit to punish us for having the temerity to look after ourselves.