Treasury estimates still ‘too limited’
Treasury has released its Tax Expenditures Statement for 2015, but the industry is being reminded of the significant limitations of the figures when calculating the true cost of super concessions.
Late last week, Treasury released the 2015 Tax Expenditures Statement, which purports to give some indication of the cost of super tax concessions.
However, Peter Burgess, general manager, technical services and education at SuperConcepts(formerly AMP SMSF) again advised caution on the government and industry using these figures as a basis for increasing taxes on super.
“By Treasury’s own admission, this is a very crude calculation of the cost of the superannuation concessions,” Mr Burgess told SMSF Adviser.
“We know it doesn’t factor in revenue savings associated with lower reliance on the old age pension and we know it doesn’t factor in changes in behaviours if a superannuation tax concessions were withdrawn,” he said.
Late last year, a parliamentary committee recommended that Treasury alter its calculations to appropriately analyse the true costs and benefits of superannuation tax concessions.
This argument is consistent with industry views that there needs to be a more holistic and sophisticated approach to valuing tax concessions with a model that, for example, factors in a reduction in age pension costs.