In uncharacteristic fashion, the federal government has committed to making no further tax changes to superannuation after the bevy of changes which came into effect on July 1 this year.
“The coalition has done the job that we needed to do on the taxation of superannuation,” Kelly O’Dwyer, Federal Minister for Financial Services said in a speech to the Tax Institute conference in Sydney on Friday.
“The job has been finished and legislated. There are no further plans.”
The Australian reported that the new changes which came into effect on the first day of July, cut the amount of annual contributions which could go into a superannuation account on a concessional basis from $35,000 to just $25,000 a year.
The contribution amount after tax was also cut from $180,000 to $100,000 a year.
It also put a cap on the amount of money which could go into a superannuation account in tax-free retirement mode to $1.6million.
The new changes also took away a lot of the appeal of transition to retirement plans which had been popular with those approaching retirement age.
While some concessions were made, including allowing people to make several years “catch up” contributions if they had low super balances, the scope of the changes drew strong criticism from those with larger super balances who had been actively contributing large sums of money in preparation of retirement.
However, the federal government’s promise to not make any more tax changes to super means that it will most likely become an issue in the next election.
“Our approach gives Australians certainty and the industry stability about the Coalition’s superannuation tax policy,” O’Dwyer said.
“It stands in stark contrast to the Labor Party and the Greens who will slug superannuants significantly more in tax as they prepare for their retirement. The only certainty the Labor Party and the Greens are able to provide Australians saving for their retirement is that they will be hit with higher taxes.”