As Australians navigate the complexities of managing their retirement savings, a new development has emerged that could impact the financial futures of those with substantial superannuation balances. Federal Treasurer Jim Chalmers has turned his attention to the tax concessions granted to high-value superannuation accounts, following revelations that these breaks are expected to cost the government a staggering $55 billion this financial year.
The Tax Expenditures and Insights Statement, released on a recent Tuesday, has brought to light 48 tax concessions currently under review, with superannuation concessions leading the pack. This scrutiny comes at a time when the government is facing a dual challenge: the need to increase public spending to meet the growing demand for services such as aged care and Medicare, and a revenue shortfall exacerbated by a downturn in mineral earnings.
In a press conference held in Canberra, Mr. Chalmers addressed the financial pressures on federal budgets, emphasising the Australian public’s rightful expectation for a decent level of services. ‘Whether it’s aged care, Medicare, early childhood education, the care economy more broadly, this is going to become an increasingly important part of our economy as our population ages in particular,’ he stated.
The Treasurer outlined the Albanese government’s strategy to balance these demands, which includes a mix of spending restraint in other areas, identifying savings, and implementing modest but meaningful tax reforms. These measures aim to ensure that the government can afford to pay workers in essential sectors fairly, thereby attracting much-needed talent to these fields.
Chalmers highlighted that the government’s immediate focus would be on addressing ‘unfinished business’ related to previously announced tax measures, including those targeting multinational corporations and super tax concessions. This suggests that individuals with high super balances may soon find themselves facing increased taxes as part of the government’s efforts to fund its priorities without introducing entirely new elements to its fiscal agenda.
We’d love to hear your thoughts on the proposed tax increases for high super balances. What’s your take on the government’s plan to target super concessions? Do you think it’s a fair way to balance the budget, or are there better alternatives? Join the conversation in the comments below and share your views on the future of retirement savings.
Also read: The future of superannuation: A bold proposal for tax reform
Remembering the last 40 years all governments have favoured the higher paid/wealthy part of Australia’s population. I was disgusted when Labor went through with the last tax cuts.
Who has had their available money for being able to survive severely reduced. Not the wealthy, just your everyday person. Why should the general population be made to suffer for the people who are still spending their money. Its about time the Labor govt. looked after the people who have supported them, with no reward for doing so.
I can remember when the top tax rate was in excess of 60 cents in the dollar, and now it’s down to 45 cents in the dollar, and majority of workers are only paying 30 cents in the dollar.
There are no statistics that show what percentage of the total income tax collected by the different tax rates.
If government ensured that big businesses paid taxes on all their profits and reduced the many perks for mining companies, then government finances would be in a much better situation. In recent years the ATO has revealed information about big businesses and their small or zero tax payments.
Superannuation was designed to be a tax dodge for the wealthy, and it is being used that way extensively. What a surprise! Reform is long overdue, but don’t hold your breath for the rich to make rules that impact them. Maybe if politicians were not so generously paid they might actually focus on what is good for the nation instead of what is good for them and their rich mates.
Taxes on large company profits have never been adequate and certainly multinationals are not paying anywhere near their share. Perhaps hefty taxes would reduce the rapid growth of huge corporations and make room for more small business, which is the lifeblood of a healthy society.
The plus side to big business and mining paying limited tax is that they employ thousands of employees across Australia who do pay tax. Without the existence of these businesses, these employees would not exist and would not be paying high rates of tax particularly in the mining sector that attract workers with high salaries. These highly paid workers also contribute to the economy and other businesses by spending their high paid salaries.