Speaking at a press conference in Adelaide this week, Bill Shorten was asked if he could rule out whether Labor would be increasing or introducing new taxes on superannuation.
In his response, Mr Shorten said that Labor has “no plans to increase taxes on superannuation” and “no plans to introduce any new taxes on superannuation”.
Despite Mr Shorten’s comments this week, the Labor Party has previously outlined a spate of measures which are expected to have a direct impact on at least some superannuation members, particularly those in SMSFs.
If elected, the Labor Party has made it clear that it intends to remove refunds for excess franking credits from 1 July 2019 onwards, which some have estimated will see SMSFs fully in pension phase and below the $1.6 million threshold lose around $5,000 in income per year on average.
Labor has provided an exemption for those receiving the age pension under the measure.
SMSFs that had at least one pensioner or allowance recipient before 28 March 2018 will also be exempt from the changes.
Based on estimates by the Parliamentary Budget Office, the measure will impact 840,000 individual taxpayers, 210,000 SMSFs and 2,300 Australian Prudential Regulation Authority–regulated funds in the 2019–20 financial year.
The Financial Services Council has also estimated that around 2.6 million Australians in APRA-regulated funds will be negatively impacted by Labor’s franking credit policy.
Labor has also previously flagged that it intends to reduce the division 293 threshold down to $200,000 from its current $250,000.
This is the threshold at which high-income earners pay an additional 15 per cent tax on concessional contributions up to the concessional contribution cap of $25,000.
SuperConcepts executive manager of SMSF technical services Mark Ellem explained that, under the current threshold, if an individual has an adjusted income of $275,000 and their employer contributes $25,000 to their super fund, you would end up with an additional tax bill of $3,750.
“However, if your adjusted taxable income was $260,000 and concessional contributions of $25,000 were made to your fund, then only $10,000 would be taxed at the additional 15 per cent ($1,500),” he explained.
If the threshold is reduced, then the threshold will impact a greater number of individuals.
Hardly surprising that the Pollies don’t understand the Tax Policies. They are very complicated and some of use have studied for quite a few years and practiced for decades and we have difficulty at times too. Plus the new legislation is so fragmented. The answer to all of our prayers would be a simpler tax system. (But the flip side is I might lose my job LOL)
He has already been corrected by the shadow finance minister saying Shorten didn’t understand the question and that Labor have no plans ‘during this election campaign’ to increase super taxes – in other words they will if they do get elected but just aren’t telling. Scum and financially illiterate.
Latest on Shorten’s answer:
A day later, Mr Chalmers told reporters that he wanted to make Labor’s policy “clear”.
“When Bill Shorten said we don’t have any plans, he was talking about we don’t have any additional things to announce during the election campaign,” Mr Chalmers said.
Welcome to the future Ministry of Truth. Doubleplusgood.
A clever answer: “No plans to increase taxes on Superannuation” didn’t rule out whether Labor would be increasing or introducing new taxes on Superannuation. I’ve heard Labor will abolish accumulation accounts for members with a pension account. I’m certain Labor has a hidden agenda (not a plan as Shorten has said)
My goodness, we have to be embarrassed at the spelling errors in these comments. This is abysmal and I, for one, wouldn’t take criticism seriously from anyone who can’t spell. For example “there life long savings” “does the politicians” “doesnt” “propsed” “verse”.Of course it is an extra tax but these comments don’t help.
George Lawrence: spelling errors in comments here could indicate different highest education, i.e. some attended a University and other left high school early; or our first language at school was not English or for another reason beyond our control. Let’s embrace all comments here rather than be embarrassed by those with spelling errors. 😀
I’m not sure if he knows exactly what he’s talking about and what his proposed changes will actually cause…
Amazing!! Bill doesnt even know the propsed ALP policies!!!
If I am out of pocket from the position I am in now IT IS AN ADDITIONAL TAX!!! Come on media about time you interpreted the spin for all those Australians that are impacted and don’t work in the industry..
It’s not really an additional tax if you look at it objectively. If the dividends were unfranked there would not be a taxable amount. It’s just facts where you are going wrong.
Surely taxing dividend income received by a SMSF at 30% instead of 15%, by denying a refund of excess franking credits, represents a tax increase. Or am I missing something?
Also, perhaps I misunderstood your comment, but unfranked dividends are fully taxable with no franking credit to be refunded as there hasn’t been any tax paid on them. They are taxed at 15% in a SMSF……..
I think it’s unfair that under Shorten high and middle income earners will get a tax credit of $0.30 for every $1.00 of fully franked dividend and lower income earners not receiving a Centrelink pension will not get a tax credit of $0.30 for every $1.00 of fully franked dividend. The fair thing to do is either refund the franking tax credit to low income earners not receiving a Centrelink pension as is done now or allow low income earners even not receiving a Centrelink pension to carry forward the unused franking tax credit into the future. Consider a low income earner losing franking tax credits in one year and selling an investment property or shares and making a large capital gain the following year. The unused franking tax credit lost in the previous year should be allowed to offset tax in the following year.
Only a politician or a thief could tell such lies and keep a straight face.
Please explain Big Taxing Bill Shorten how you are not going to tax super more ?
I mean someone seriously with a voice have a go at less tax the higher income hard working people on there life long savings verse the hypocrisy of a 10 year stint in parliament life long pensions and benefits.
Why does the politicians have different super rules. Time to make it the same.
Of course they are not going to touch superannuation taxes as they are taxing everything else – negative gearing, refundable franking credits, NCCs to $75,000 and CGT discount to 25%. But industry super is protected at all costs. At least SMSFs can take some of that gloss.