ASFA disputed the argument that super tax concessions cost the federal Budget $30 billion annually, more than the total spending on the age pension.
“When you take into account the savings the government makes on the age pension as a result of super, and the impact of behavioural change that would occur if super tax concessions were removed, a more accurate estimate would be around $16 billion a year,” ASFA said.
It was also critical of the suggestion that super does not help the government reduce spending on the age pension with super saving the government $7 billion in age pension expenditure annually.
“Around 32 per cent of those aged 65 in 2013 were fully self-funded in retirement, up from 22 per cent in 2000,” ASFA said. “We project this number will rise to 40 per cent by 2023.”
The argument that the bulk of tax concessions for superannuation contributions go to high-income earners said was another misconception, it said.
“ASFA analysis of data from 2011-12 found that around 75 per cent of the tax concessions applied to contributions went to those paying either the middle-income marginal tax rates of 30 per cent, or 38 per cent for those earning between $37,000 and $180,000 a year.”.
The industry body also said high-income earners get the most benefit from concessional capital gains tax treatment, negative gearing and exemptions for the family home rather than from superannuation.
The assets held in superannuation by high-net worth individuals represent just over 20 per cent of the total $1.6 trillion of investable assets held by high-net-worth individuals.
ASFA chief executive Pauline Vamos said correct information is the first step in good decision-making.
“[This] is why it is so important that we get the facts right before we start these discussions,” Ms Vamos said.
“An informed debate is what’s needed to ensure policymakers and the broader community can reach a consensus on how we can adjust our superannuation system to ensure it remains sustainable and equitable, and caters better to the needs of the growing population of retirees.”
The other thing that i have not seen mentioned is death tax. None of my high net worth clients have dependents for their super to go to tax free so they will eventually pay a huge amount of tax. Surely this also needs to be factored into the ‘cost’ of super.
But the politicians don’t want and “informed debate”. In fact, they want an ill-informed, one-sided debate because that suits their current purpose – which is to raid the savings held in the SMSF sector.
So they will continue peddling the misinformation that SMSF is just another tool by which the so-called “rich” can avoid paying tax (at the expense of the battling working classes of course!).
Say a lie often enough and people eventually believe it to be true. That’s the whole basis of political propaganda.