Super to become political ‘battleground’
After being off the political agenda in the lead-up to the last election, one industry body believes the recent delays to the superannuation guarantee are a “sign of things to come” for further changes in superannuation.
As part of the government’s repeal of the Minerals Resource Rent Tax, the superannuation guarantee (SG) will remain at 9.5 per cent until 2021/2022.
The staged increase in the SG to 12 per cent will now take until 1 July 2025, almost a decade later than the original Labor legislation had envisaged.
Speaking to SMSF Adviser, Taxpayers Australia’s Reece Agland said these developments are a signal of the “reality” that superannuation will be facing further changes in the lead-up to the next election.
“Nothing was really said at the last election, but at the next election, it will be a battleground,” Mr Agland said.
“At this one they were a little too scared to touch super, so they said they wouldn’t touch it for a few years. But I think the next election is going to be a big issue.”
Mr Agland suggested the changes could involve taxing the superannuation of high net worth individuals, which is likely to affect the SMSF sector.
He has previously told SMSF Adviser it is becoming increasingly apparent that the tax concessions to the wealthy are “unsustainable” long term.
“A number of people, including Liberal heavyweight Malcolm Turnbull and Treasury Secretary Dr Martin Parkinson, have intimated that the excessively generous deductions in superannuation available to the wealthy are unsustainable and need to be considered in any genuine tax reform process,” Mr Agland said.
The Low Income Superannuation Contribution (LISC) will now be retained until 2017. However, Mr Agland said it should be a permanent fixture.
“Most people get a tax advantage over putting their money into super, but if you’re on the lowest level of income, you end up paying tax. It’s a bit of a ridiculous situation,” Mr Agland said.