Despite vocal opposition, the Labor government intends to go ahead in its May budget with plans to increase the tax revenues generated from superannuation funds and will defend the move as critical to sustaining the tax revenue base as the Australian population ages, according to The Australian Financial Review.
The government's stance received the backing of AustralianSuper fund chief executive Ian Silk, who said that the string of tax breaks that have fuelled superannuation savings for decades are unsustainable and need to be scaled back.
“It is inevitable we won't be able to maintain the current tax settings on super,” he told the AFR. “This is not about arguing for more taxes but a recognition that the current settings pose a huge problem for any government.”
Treasury secretary Martin Parkinson said several months ago that tax concessions for superannuation would become increasingly unsustainable as Australia's population ages and its tax base narrows, which has formed the basis for the Labor government's stance.
“With the Commonwealth budget coming under increasing pressure over the next few decades, the fiscal sustainability of all policies, including superannuation, will demand greater public scrutiny,” Mr Parkinson said.
At the current pace of growth, the federal government would forego $44.8 billion in tax revenues related to super concessions in 2015-16, up from $31.8 billion in 2012-13, the AFR added.
