ALP to oppose super splitting…

The Federal Government’s plans to allow couples to split their superannuation contributions could be in danger after the Labor party revealed it would oppose the measures.

The shadow minister for retirement incomes and savings, Nick Sherry, announced last week that Labor would not support the measures in order to help fund its own proposal to cut the rate of the contributions tax on superannuation savings.

Labor has proposed either an across the board cut in the tax on superannuation contributions from 15 to 13 per, or a cut in the tax to 11.5 per cent for people aged over 40.

Labor’s proposals were announced as an alternative to the Government’s plans to cut the rate of the superannuation surcharge, which the Labor party has also previously pledged to resist

According to Sherry, Labor’s proposals would be revenue neutral.

He says Labor would save $1.1 billion over 4 years through its rejection of the Government’s proposals to cut the surcharge and allow couples to split their superannuation, as well as through changes to some public sector superannuation schemes, in order to pay for the tax cuts.

But the Treasurer, Peter Costello, has claimed the Labor party’s proposals would cost more than $2 billion over four years, creating a $1 billion revenue shortfall.

The Government’s proposals to allow couples to split their superannuation, scheduled to take effect from July 1 next year, were initially announced at the last election and confirmed in last week’s budget.

The proposals would allow one spouse to make superannuation contributions into an account in the other spouse’s name, effectively doubling the current superannuation reasonable benefit limits.