Super tax ‘loopholes’ under fire
Following the release of the Treasury’s Tax Expenditures Statement, The Australia Institute has slammed super tax concessions for the wealthy as a key strain on the federal Budget.
The Australia Institute stated superannuation and housing tax breaks for those in higher income brackets are costing the budget 10 times as much as leaving the GST off fresh food.
According to Treasury's Tax Expenditure Statement, which was released late Friday afternoon, the cost of the concessional tax treatment of superannuation fund earnings will rise from $13.4 billion in 2014/2015 to $25.8 billion in 2017/2018.
The total cost of all of the different tax concessions for superannuation is forecast to hit $45 billion by 2017.
"The Abbott government says it will do anything to repair the Budget bottom line, but their definition of anything does not extend to closing the loopholes which are draining tens of billions of dollars from the budget each year," said Dr Richard Denniss, executive director of The Australia Institute.
The Treasury also forecast that the cost of taxing income from capital gains at half the rate of other forms of income will surge from $5.8 billion to $7.6 billion over the same period.
The vast majority of the benefits of these concessions go to the wealthiest 20 per cent of households, The Australia Institute stated.
"If Joe Hockey was serious about getting the Budget back into surplus he would be cracking down on the loopholes… that allow multi-millionaires and some big foreign companies to pay zero tax in Australia," Dr Denniss said.