The Federal Treasurer, Scott Morrison has sent his clearest signal yet that the Government is intent on altering the tax structures around superannuation to eliminate their use as “tax free inheritance pools”.
At the same time as confirming his view the purpose of superannuation has to be ensuring people become less reliant on the age pension, the Treasurer said he was particularly concerned to look after the needs of low and middle income earners.
Speaking during a national television interview, Morrison said the Government believed that the purpose of superannuation, by definition the purpose of any tax incentives supporting superannuation was to “ensure that people would be less reliant, or not reliant at all, on a welfare payment, i.e. the pension, in their retirement”.
“Now, there are a whole range of people for whom the landing on the pension is not a reality for them. But they’re particularly low and middle income-earners, and in particular those most at risk, if they’re not building up their superannuation over time – they’re the ones who are most likely to be drawing down heavily on a welfare payment in the pension in the future,” the Treasurer said.
“So our argument on super is we’ve got to ensure the incentives are targeted to address the purpose and are not there as the form of building inheritance pools or tax free inheritance pools to pass on,” he said. “That’s not what super’s about.”
However he rules out suggestions of retrospectively legislating to impact those already in the retirement phase.
“On the retirement phase, though, I think we always have to be very careful on the retirement phase because people are in it,” Morrison said. “They set up their arrangements before going into it and whether it’s technical retrospectivity or not, you are effectively applying a retrospectivity when you’re looking at the retirement phase.”
