Superannuation

The Albanese Government is defending itself against accusations of a broken election promise, after lifting the tax rate on balances above $3 million from ...

Please click below to help InDaily continue to uncover the facts. Your contribution goes directly to helping our journalists uncover the facts. “We are not going to impact the family home, full stop, exclamation mark,” he said. “The cost of the tax breaks for people who don’t need them, and the gender gap in balances,” he said. “The changes are about making superannuation more sustainable by making the tax breaks more affordable.” “Let’s look at reining in the stage three tax cuts,” he said.

The government will adopt a change to the superannuation tax breaks that will affect Australians who have super balances exceeding $3 million.

“This adjustment does not impose a limit on the size of superannuation account balances in the accumulation phase. Chalmers and Jones warned that this figure exceeded the cost of the age pension by 2050. Chiefly, to rein in “generous superannuation tax breaks” so that the system was fairer, better targeted and sustainable. “This is expected to apply to around 80,000 people, and they will continue to benefit from more generous tax breaks on earnings from the $3 million below the threshold,” the ministers said. The change will come into effect from 2025-26 and will mean the concessional tax rate to future earnings of superannuation balances in this category will be 30%. The government will adopt a change to the superannuation tax breaks that will affect the 0.5% of Australians who have super balances over $3 million, but after the next federal election.

The opposition is branding changes to superannuation tax as an attack on aspirational Australians as the treasurer says the new rate is modest.

“The first change will be on higher-income Australians. The next change will be on people on the next rung down and the next rung down after that.” While it was the government’s intention to add super to the leave, it wasn’t something that was affordable at the moment, he said. “The changes are about making superannuation more sustainable by making the tax breaks more affordable,” he told reporters in Canberra on Wednesday. It will impact about 80,000 Australians and is expected to raise $2 billion in the first full year and $3.2 billion over five years. The opposition is branding changes to superannuation tax as an attack on aspirational Australians, as the treasurer says the new rate is modest.

Anthony Albanese has been accused of breaking an election promise after announcing that Australians with more than $3million in superannuation would lose ...

But one which makes a difference to the sustainability and affordability of the superannuation system that we cherish.” Forty six per cent of the tax concessions benefit goes to those aged 60 or older. We have persistent and growing spending pressures,” he said. The average superannuation balance is about $150,000. We think we have struck the right balance here and we’re confident we have.” “In 2016, they jacked up taxes on superannuation to the tune of $5 billion. “The average benefit for those aged over 60 who have superannuation is also higher because of the zero per cent tax rate applied to earnings in the retirement phase,” the statement said. That’s what Angus Taylor said in 2016 when they increased taxes on super,” Dr Chalmers said. “For instance, over 55 per cent of the benefit of superannuation tax breaks on earnings flow to the top 20 per cent of income earners, with 39 per cent going to the top 10 per cent of income earners.” “People in higher taxable income deciles receive a larger share of the benefit due to making larger contributions and paying higher marginal rates of tax, which makes the flat 15 per cent rate of tax on superannuation contributions more concessional.” “They can explain that to the Australian people. The “modest adjustment” is not retrospective, and will not impose a limit on the size of superannuation account balances in the accumulation phase.

Treasurer Jim Chalmers opened the gates to reform last week with the wording of the long-awaited objective of superannuation to be legislated later in the ...

That means a tax on the money your money generates in investments inside the fund, not the income paid out to retiree members. The Grattan Institute says that limit should be cut to $220,000 and a tax of 35 cents in the dollar could be levied above that income. “The elephant in the room is that most people are still earning tax-free income in retirement,” Mr Coates said. “That will save $1.6 billion a year and reducing the income level at which section 293 tax [on high incomes] to $220,000 would save another $1.1 billion.” “Most people contributing more than $20,000 are in the top 20 per cent of income earners and will never spend their super in retirement,” Mr Coates said. Contributions tax is the tax the government takes out of concessional super contributions. But there’s a problem for the government in that it won’t deliver Treasury enough money to stem the rise in super costs. “The main effect of that is to boost the value of inheritances which makes Australia less equal.” [wording for the objective of super](https://thenewdaily.com.au/finance/2023/02/21/four-principles-true-purpose-superannuation/) to stipulate that the system must “preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”. The cap on concessions for balances above $3 million is below that recommended by the super industry, which wanted it set at $5 million, and above that called for by the Grattan Institute, which had said $2 million was a better figure. [hints turned into policy when he unveiled a crackdown on the fewer than 1 per cent of super members with more than $3 million.](https://thenewdaily.com.au/news/politics/2023/02/28/tax-concessions-super-rich-cut/) [the government has unveiled an overhaul of super changes](https://thenewdaily.com.au/news/politics/2023/02/28/tax-concessions-super-rich-cut/) that will increase tax on superannuation contributions for those with balances over $3 million from 15 per cent to 30 per cent.

Finance guru Scott Pape has revealed that Aussies only need about half the recommended amount of superannuation when they retire,

* The cost of these concessions is projected to exceed the cost of the age pension by 2050. * It does not impose a limit on the size of superannuation account balances in the accumulation phase and it applies to future earnings. One superannuation fund amassed an astonishing $544million (pictured) * This will apply to about 80,000 people, who will continue to benefit from the 15 per cent tax rate on earnings from the $3 million below the threshold. The other 99.5 per cent of Australians would continue to receive the 'same generous tax breaks' - meaning the 15 per cent concessional rate would remain unchanged for them. The Barefoot Investor author said it's more realistic to aim for the much more attainable Super Consumers Australia figure of $302,000 for a single and $402,000 for couples.

The Federal Labor Government has proposed a legislative objective for superannuation, which encompasses notions of dignity, equity and sustainability, to ...

However, the specific details regarding how the objective will impact the superannuation industry and other sectors of the Australian economy remains to be seen. The Government is seeking stakeholder feedback on the draft legislative superannuation objective, including its benefits, practical application, and alternative wording. These reforms have enshrined in legislation new conduct obligations for superannuation trustees, and broadly align with the proposed superannuation objective. Following this, and in recent years, the key superannuation regulators have been proactive in enacting reforms to improve outcomes for superannuation fund members. It is also unclear at this stage whether there is intended to be any consequences under the legislation for non-compliance with the legislated objective (however that is to be measured and assessed). Under the proposed legislation, superannuation trustees may feel compelled to make sustainable and equitable investments having regard to the proposed statutory objective, despite the Treasurer’s comment that “the objective is not intended to guide the regulation of trustees’ conduct”. The Treasurer has been quick to act in seemingly the Government’s first step towards ensuring that our superannuation system remains fiscally ‘sustainable’ – from 2025‑26, Australians with over A$3 million in superannuation will be taxed at a concessional tax rate of 30% (applied to future earnings) – an adjustment from 15%. Superannuation trustees are currently subject to various statutory and general law duties, including to act in the best financial interests of beneficiaries. It’s possible that legislating an objective for superannuation will further enhance the ability of trustees to consider broader environmental and societal goals, including nation-building projects. The Government have focused this objective on ensuring that Australians have savings and income for retirement, which would appear to limit the Government’s future ability to allow draw downs on superannuation to fund things other than retirement e.g. The executive summary of the Consultation Paper itself makes it explicitly clear that the Treasurer is keen to “leverage greater superannuation investment in areas where there is alignment between the best financial interests of members and national economic priorities, particularly given the long-term investment horizon of superannuation funds.” Is the purpose of our superannuation system to simply save for retirement, or to help Australians save for their first home?

Anthony Albanese has slammed the door shut on a future change to a tax break on the family home after the Treasurer failed to categorically rule it out ...

Both Dr Chalmers and Mr Albanese rejected suggestion the change of heart was a broken promise. “What we’ve done is release more information. “It’s very clear from what’s been happening in the last week that Labor doesn’t keep its commitments. It’s just a Treasury summary,” Dr Chalmers responded. I think people are aware of that. there are a lot of tax breaks in the system.

The Albanese government has been accused of breaking an election promise and shifting the goal posts on superannuation....

"We are not going to impact the family home, full stop, exclamation mark," he said. "Let's look at reining in the stage three tax cuts," he said. "The changes are about making superannuation more sustainable by making the tax breaks more affordable." "The cost of the tax breaks for people who don't need them, and the gender gap in balances," he said. Greens leader Adam Bandt, whose party's Senate support will be needed to pass the changes, said he would discuss the plan with Labor, but the "modest proposal" ignored other more responsible budget policies. "When we can afford to pay superannuation guarantee on paid parental leave we would like to, but this change is about budget repair."