The current system of superannuation tax concessions favours higher-income earners and disadvantages women who dominate Australia’s low-income earners, says the shadow treasurer.
Speaking at the release of the Super Challenge of Retirement Income Policy by the Committee for Economic Development of Australia, Mr Bowen argued that introducing Labor’s policy of restricting concessions for those with superannuation balances in excess of $1.5 million would help resolve the superannuation balance gender gap.
“The current system sees close to 40 per cent of all concessions flowing to the top 10 per cent of income earners,” said Mr Bowen.
“This means 40 per cent of all concessions accrue to people that are not at risk of fronting up to local Centrelink to pick up a pension. Of course most of this cohort are represented by men.”
Mr Bowen claimed that tax concessions for superannuation are the fastest-growing tax concession in the federal budget and will exceed the cost of the age pension within just four years.
“They are unsustainable and unfair to Australia’s low-income workers and unfair to Australia’s women. They represent a deliberate transfer of wealth from women to men.”
He also referred to research by Rice Warner that the superannuation system for those on the lowest incomes actually costs them money.
“In fact it costs single females in this decile over $32,000 or about three years of work over their working life,” said Mr Bowen.
“Even for women in the bottom 20 per cent of income earners, the superannuation system costs them money.”
The top 10 per cent of male income earners, Mr Bowen said, receive a benefit of around $1.5 million in concessions over their lifetime, based on the Rice Warner research.
“In my mind, there are two types of policy responses to this unacceptable situation: general measures to improve the equity of superannuation tax concessions across the income spectrum, and then targeted measures which deal with women in particular,” he said.
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