The trustee lobbyist argued that while the ASFA report points out the tax-free income stream payments for balances exceeding $2 million, it fails to note how much more tax these people pay in the first place.
“As the Treasurer has pointed out this week, 2 per cent of taxpayers pay 26 per cent of income tax -the top 20 per cent of taxpayers pay 65 per cent of income tax,” said SMSFOA.
“Fairness can’t be judged by looking at superannuation tax benefits in isolation from income and other taxes paid.”
SMSFOA criticised ASFA’s focus on the tax benefits derived from large superannuation account balances as “looking at the issue through a very narrow prism”.
“A better perspective would be gained by taking into account all taxes paid over a lifetime and all tax concessions received,” said SMSFOA.
The trustee lobbyist also said questioning whether it is fair for younger generations of taxpayers to be funding the tax concessions of older, higher net worth individuals ignores the fact that the superannuation system is much fairer in relation to the age pension.
“Superannuation is built during a person’s working life while the Age Pension is funded by taxpayers now and in the future,” said SMSFOA.
SMSF trustees, SMSFOA said, are largely achieving the objective of the superannuation system with an average account balance of $500,000.
“An average account balance of less than $30,000 in the large APRA-regulated funds, represented by ASFA, is clearly falling well short,” said SMSFOA.
“Instead of worrying about a small number of high account balances and retirement incomes, ASFA should be concerned about why most of the members of the managed funds it represents are not going to have enough superannuation to fund ASFA’s own notion of a comfortable retirement.”
People have accumulated savings through hard work, said SMSFOA, having paid their fair share of tax and more along the way, should not be penalised for their success.
“Given the Government’s intention to have an open and sensible conversation about tax so that we can have a lower, fairer and simpler tax system, stirring up envy with headline grabbing tall poppy numbers is not a constructive contribution to the debate which should be about how every Australian can be a taller poppy,” said SMSFOA.
I agree wholeheartedly with comments #1 #2 & #3. More and more our Democracy is becoming an Ineptocracy, this is… A system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themmselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.
To put it simply and bluntly I am sick and tired of hearing statements like the younger people pay taxes to fund the older generation, the government makes the older people sound like leeches. In my working life time like many other working professionals we have paid a lot of taxes to fund schools, health cares, child allowances etc. I have worked hard, saved and planned for my retirement so I do not have to depend on Pensions and much of the money I have into my Super has already been taxed why should I have to pay further taxes on the Super earnings (that is if I do not lose any money through share crashes) in the last section of my life. There is a lot of medical expenses and the like to pay and we do not get any help from the government as self funded retirees.
I agree completely with AMSFOA. It’s time some sanity was introduced into this debate. Don’t take the incentive away from everybody who wants to save. Let’s look at the system: I will bet that the “big” super members, during their working life, have received little if any of all the various benefits that others have received, nor will they receive the Pensioner Health Card, the Age Pension, cheap travel etc, subsidised retirement in nursing homes. These social security benefits are considerable and in many cases will add up to much more than the tax that the beneficiaries have paid in their lifetimes.
The big earners pay the tax so those less fortunate get their benefits.
Let us not put too big a burden on those who work hard and save for their retirement.
Exceptionally well put, SMSFOA. Let’s cut through the sensationalist garbage and the narrow-minded political ideologies so we can have a sensible debate about the whole tax system.
Unfortunately, that’s never going to happen in this country. Too many people with vested interests and short-term self-serving agendas.