Speaking at the release of the Super Challenge of Retirement Income Policy by the Committee for Economic Development of Australia, Mr Bowen argued that introducing Labor’s policy of restricting concessions for those with superannuation balances in excess of $1.5 million would help resolve the superannuation balance gender gap.
“The current system sees close to 40 per cent of all concessions flowing to the top 10 per cent of income earners,” said Mr Bowen.
“This means 40 per cent of all concessions accrue to people that are not at risk of fronting up to local Centrelink to pick up a pension. Of course most of this cohort are represented by men.”
Mr Bowen claimed that tax concessions for superannuation are the fastest-growing tax concession in the federal budget and will exceed the cost of the age pension within just four years.
“They are unsustainable and unfair to Australia’s low-income workers and unfair to Australia’s women. They represent a deliberate transfer of wealth from women to men.”
He also referred to research by Rice Warner that the superannuation system for those on the lowest incomes actually costs them money.
“In fact it costs single females in this decile over $32,000 or about three years of work over their working life,” said Mr Bowen.
“Even for women in the bottom 20 per cent of income earners, the superannuation system costs them money.”
The top 10 per cent of male income earners, Mr Bowen said, receive a benefit of around $1.5 million in concessions over their lifetime, based on the Rice Warner research.
“In my mind, there are two types of policy responses to this unacceptable situation: general measures to improve the equity of superannuation tax concessions across the income spectrum, and then targeted measures which deal with women in particular,” he said.
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I agree with you DavidL.
The concessions are available to every one. Just because someone who pays say $200,000 in income tax a year, the cost for the tax foregone is less than $12,000. Any one on that sort of income will replace this if they have to and the public purse will not be much enhanced.
When you look at the cost of the highly complex schemes that Labour has thought up, which will cost superannuation funds to comply with, who do you think will be paying for them? – low income earners of course, so not only will it not save much money, it will cost the very people they are trying to protect. So instead of it costing $32,000 (allegedly) it is likely to cost them $35,000 over the same period with all the extras that Labour want to introduce.
KISS principal works for me.
I still struggle to see how tax concessions which are available equally to every taxpayer – whether male or female, high-income or low-income – can be considered inequitable.
In essence, then, their argument is that because some people can’t afford to take advantage of the concession, then nobody should be allowed to. Very different argument to “the system favours the rich”, and smacks of hypocrisy.
Also baffled by the discussion on women’s super balances. I may be wrong, but for a married couple aren’t super balances pooled assets in a divorce settlement that are split on separation? Therefore, why does it matter who has the higher balance?
And don’t couples share their combined balances in retirement when both are drawing pensions to spend on lifestyle?