Treasurer Scott Morrison announced plans to lower the concessional contribution caps for superannuation to $25,000 in this year’s federal budget.
Key industry bodies, including the SMSF Association, have criticised the measure, saying it will have an “enormous impact” on those who are aiming to be self-sufficient in retirement.
Speaking at the Tax Institute’s Superannuation Conference, Mr Cooper said while some might regard the measure as “draconian”, it will not be a significant roadblock to accumulating retirement savings.
“It is only a tax measure, not a savings cap as some commentators assert,” Mr he said.
“It will not prevent most people saving for retirement, either in or out of the super system. It will merely dictate how much of a leg-up certain savers will get from the tax system.”
Overall, Mr Cooper said the budget measures “hit the right notes on the fairness scale”.
“An element progressivity has been introduced into super in a relatively simple way and there were also important redistributive measures directed at low income earners,” he said.
“Through these measures in combination, more people will now enjoy income in retirement as a supplement to the age pension.”
A spot on comment JCA. The problem is that the 50% has now become a formidable voting block that both parties will pander to, Labor philosophically and Liberal pragmatically.
Jeremy Cooper appears ignorant of superannuation’s tax status deriving from its function as a lifetime income averaging mechanism for incomes from personal exertion. There is no logical place for caps in that understanding. There is a place for deferred taxation upon receipt only as a pension or annuity. Superannuation existed before the age pension and was never created as a supplement to public charity.
Dr Terry Dwyer
Dwyer Lawyers
http://www.dwyerlawyers.com.au
All of the commentators like Cooper are engaged in the same deceit of “examining” the super concessions in isolation and very conveniently omitting the fact that the people making the concessional contributions are paying all the tax into the system. NATSEM are suggesting we are now approaching the point where 50% of the population make no net contribution to the tax system yet we see this sort of nonsense from Cooper that it is unfair that the people who actually pay ALL the tax heaven forbid get some very limited relief if they further position themselves not to be a drain on other taxpayers in the future.