CPA Australia Media Release
CPA Australia welcomes common-sense changes to proposed $3m super tax
- Tax on unrealised capital gains would have been unjust
- Indexation of super balance thresholds vital to protect future generations of workers
- Increase to LISTO to benefit lower-income Australians
Australia’s largest accounting body, CPA Australia, today welcomed Treasurer Jim Chalmers’ changes to the government’s proposed $3 million superannuation tax.
Superannuation Lead Richard Webb said the revisions followed months of campaigning from industry groups and stakeholders. He said Parliament should legislate the changes.
“The government has listened to our concerns. The outcomes will help make Australia’s superannuation system fairer and more equitable,” Mr Webb said.
“The indexing of the Division 296 proposal and taxing of realised earnings will ensure that Australia’s superannuation system remains fit for purpose for future generations.
“If legislated, this change is expected to benefit millions of low-income earners by improving their capacity to contribute to superannuation and build long-term retirement savings.”
Mr Webb said that if the $3 million balance threshold had not been indexed, it would have eventually impacted a greater number of Australians than was acknowledged.
“We are pleased that the government has listened to our feedback and made these common-sense changes,” he said. “Policymakers have a duty to ensure that the spending power of future retirement savings is preserved.
“Bracket creep already has a silent eroding effect on personal finances. Allowing further erosion of superannuation savings would have been contrary to the fundamental principles of our tax system.”
CPA Australia is also relieved to see the government change course on its plan to tax unrealised capital gains as part of its reforms of superannuation.
“This was a particularly egregious element of the government’s initial proposal,” said Mr Webb. “Providing certainty and financial stability for this and future generations of retirees is critical. Taxing unrealised gains would have distorted our tax system, which needs broader reform.”
Mr Webb said updating the low-income superannuation tax offset (LISTO) to $810 from $500 and increasing the eligibility threshold from $37,000 to $45,000 are positive and long-overdue steps that will help ensure more Australians – especially women and part-time workers – are not left behind when it comes to retirement savings.
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Endorsed by the CPA?The government has folded and run for the exit,having once again failed the courage test.The only thing that changed in 2022 was the titular name of the government.
The CPA (and their members’ wealthier clients) are the only ones who do.
What a gutless and useless ragtag bunch we have in government.
The government and in particular the Treasurer have listened and modified their superannuation changes to move away from taxing unrealised capital gains and have introduced indexation on the $3 million threshold.
I like a government that listens.
Still not attending to that “revenue problem” indicated elsewhere on soc meeja
Not a penny payed in tax by the biggest corporations, according to that list..
Got nice suits though,leefe.Lovely picture of that youthful bean counter at the top…butter wouldn’t melt in his mouth.
Terry, this government has very selective hearing,Keating’s comments notwithstanding.
One report claims that the watering down of the changes to superannuation taxation that Labor took to the election was Albanese overruling Chalmers (wonder if Albanese has been secretly sworn in as treasurer as well? we wouldn’t know they hide everything.)
Another claim is that after removing the tax on unrealized gains these changes will mean an extra $2billion (thenewdaily whose source was SkyNews)over the forward estimates (does that mean $500 million a year?)
The indexation of the $3 million threshold means that about the number of people affected (80 000) will stay the same.
This is fiddling at the edges yet again. It is not going to fix the taxation rorting that Howard/Costello turned superannuation into for the wealthy.
As Michael Pascoe put it “That means it will only ever be a small number of people who will have their massive tax break reduced to merely extremely good.
We don’t index income tax, so what should be so precious about the super tax break for the wealthy, particularly when it would remain a very good deal anyway?
If it is to be indexed, the Greens’ call for the starting point of $2 million makes more sense. Left without indexing, the pain/pleasure point for the extra tax would be reached in time and adjusted at that time, as it is for other taxes. ”
As Michael explained better than I could “For someone with a taxable income of $200,000 a year, there remains a 30 per cent discount on tax paid on super contributions and earnings compared with their ordinary income. For average workers, it’s a 15 per cent tax break. For some low-income workers, there is no break at all, and some super earnings are taxed more than any savings outside super.
And that’s before getting to the truly ridiculous part of seriously rich people in the “pension” phase paying no tax on their super hoarding.
Might the government have tried to really fix the distortions of the Howard/Costello rorting? Nah, too hard. Would have been bad press. ”
Labor pretending to be trying to fix things, when they ain’t.
How many things does this make where Labor went to the election claiming one thing then did something else after the election? like taking climate change,integrity in parliament and transparency seriously, like leaving no one behind.
Fair for me, less equitable for you!