Super surcharge cut blocked in Senate
The Government’s attempt to pass its controversial Superannuation (Surcharge Rate Reduction) Amendment Bill 2003 through the Senate was shot down by Labor last night, which branded the proposal “a blatantly unfair tax cut” exclusively benefiting only 5 per cent of working Australians.
The Bill, aiming to reduce the superannuation surcharge from 15 per cent to 10.5 per cent over three years, was defeated by 33 votes to 27.
Labor Shadow Minister for retirement incomes and savings, Senator Nick Sherry put a motion forward, which too was defeated, that the Bill in fact be withdrawn or at least amended to “cut the contributions tax for all Australians, a fairer approach, particularly at a time of negative returns, to boost the retirement income for all Australians and assist the Nation in preparing for the ageing of the population”.
“The proposed surcharge tax reduction to high-income earners is an exclusive tax cut to those earning greater than $90,500 surchargeable income with the greatest benefit going to those on an income greater than $109,900 with the result that it assists only the highest five per cent of income earners,” Sherry says.
However, Assistant Treasurer Helen Coonan defended the notion that the Bill was simply a tax cut for the rich.
“Higher income earners will still be paying significantly higher rates of tax and surcharge once this measure has been passed, than other income earners,” Senator Coonan says.
Sherry argues that a much fairer motion would be to reduce the general super contribution tax rate of 15 per cent down to 13 per cent.
“We have costed it [the general tax reduction] and it’s still within a balanced budget. However the biggest problem for super at the moment is there has been a significant decline in confidence - at a time of negative returns we need to cut the tax for all Australians to restore confidence,” Sherry says.
Recommended for you
ASIC has issued infringement notices to two AFSLs over financial advisers providing personal advice while they were unregistered.
Australian retirees could increase their projected annual incomes by as much as 51 per cent through comprehensive financial advice, according to a Vanguard study, but cost continues to be an issue.
AMP has announced a senior appointment to its North leadership team, reinforcing the firm’s commitment to the advice industry.
Despite the financial adviser exam being rooted in ethics, two professional year advisers believe the lack of support and transparency from the regulator around the exam is unethical.
