SMSFA mulls support for changed tax rates
The SMSF Association has said that while the tax regimes around superannuation should ideally remain the same, it is open to the introduction of a “low personal tax rate” above a certain tax-free threshold.
SMSFA chief executive and managing director Andrea Slattery said this option will “maintain equity and sustainability for superannuation” but added that it is essential there be adequate transitional provisions, a low tax rate and a high tax-free threshold.
Ms Slattery said the SMSF Association considers the proposal, contained within its submission to the Tax White Paper, to be the “preferred method for improving equity in the superannuation system”.
“We believe this proposal allows people to build adequate superannuation balances efficiently and is preferable to a more complex tax on earnings or high account balances, both of which are costly and inefficient,” she said.
“We believe that this strikes the right balance between providing people with appropriate incentives to sacrifice their current income for long-term retirement savings and ensuring that superannuation is fair and sustainable.”
This approach, Ms Slattery said, taxes people outside the super system and allows them to make their own decisions about how they manage their benefits in retirement.
“We are emphatic that superannuation tax policy should not be used as an instrument to raise government revenue to meet fiscal shortfalls in the short to medium term,” she said.
“In addition, the Association believes it is absolutely essential that superannuation taxes not be seen in isolation, but [in] how they interact with the age pension, and other social security settings and tax payments.”