The SMSF Owners' Alliance said Mr Bowen has claimed the cost of tax incentives will rise to $50 billion in justifying Labor’s proposed new tax on superannuation earnings.
SMSF Owners' Alliance executive director Duncan Fairweather said that to get the $50 million figure, Mr Bowen has “added two numbers that Treasury says should not be added together”.
Mr Fairweather said that based on a media release from the shadow minister, he has added together $20 billion in estimated superannuation contributions and $30 billion in estimated concessions on superannuation fund earnings.
“These numbers are from Treasury’s 2014 Taxation Expenditure Statement (TES) included in the Budget papers,” he said.
According to Mr Fairweather, however, it cannot be claimed by adding these two components that the total cost to the budget will be $50 billion, and this is potentially the saving that could be made if superannuation tax concessions are removed.
“They can’t be added because they measure different things. If the tax concessions on contributions are removed or reduced so less money flows into superannuation, then the earnings of superannuation funds will also be lower,” he said.
Treasury warned in the TES that these components should not be added, Mr Fairweather added.
“The shadow treasurer has not heeded this warning and so had double counted in arriving at this $50 billion number,” he said.
“Treasury has also heavily qualified the conclusions that can be drawn from the TES which attempts to measure taxes that are not collected, such as the GST exemptions on food, education and health services, the capital gains tax exemption on people’s homes and tax incentives for retirement savings.”