Yesterday’s National Reform Summit turned-up the heat on Tony Abbott to ditch his “captain’s call” to never increase taxes on superannuation.
The summit promised to focus on tax and superannuation, with all delegates agreeing that Australia’s entire retirement income system needs a rethink and that it needs to be addressed holistically, rather than pulling apart.
Fairfax reports that calls for a review to consider potential changes to super taxes, age pension rules, health and housing together received unanimous support on Wednesday.
But that’s as far they got.
Delegates, which included the president of the Business Council of Australia; Ian Yates from the Councils on the Ageing Australia, and the Australian Council of Trade Unions chief executive, could not agree on the finer details of how to make the retirement income system more sustainable.
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Tax concessions on superannuation were one sticking point, with David Whiteley, chief executive of Industry Super Australia, admitting that superannuation concessions are unfair. Under the current system, the top 1 per cent of income earners are receiving large incentives to save via super.
Former Treasury Secretary Dr Martin Parkinson said, “It’s not a retirement incomes policy, it’s a wealth accumulation policy. That doesn’t make sense to me. It’s an obvious area we should be looking at.”
Writing for Macro Business, Leith van Onselen says, “Blind Freddy can see that the superannuation system is unfair and in desperate need of reform.
“Meanwhile, superannuation concessions are costing the Budget a fortune in lost revenue, and are projected to grow by a whopping 10.8% per annum between 2014-15 and 2017-18 to some $49 billion,” he writes.
The outcome of the summit is the belief that the government needs to stop clinging to its promises not to make any changes to superannuation, and start thinking strategically about reform.
Onselen writes, “Almost everyone has called for reform and yet “tin ear” Tony continues to rule-out changes. And because of this, the Coalition finds itself against the wall with a fiscally unsustainable superannuation policy that will severely damage its economic/Budget credentials for as long as it remains in office.”
If the National Reform Summit can’t come up with a plan to improve superannuation, perhaps we can… Where would you suggest the government starts?