Hi frack - better read it yourself here, it's a bit of a wishy washy statement that can be interpreted in many ways, no specifics or if it will become L A W. It's a feeler to assess sentiment of the electorate.
Federal government considering exit tax on $1m super balances
by: Andrew Main From: The Australian January 31, 2013 12:08PM
THE Federal Government is understood to be mulling the imposition of exit tax on superannuation pots with balances close to $1 million.
At present there are caps on how much money super fund members can put into their fund at the concessional tax rate of 15 per cent, with most savers limited to $25,000 in contributions a year.
This follows moves by Treasurer Wayne Swan to reduce level of savings eligible for a lower tax rate from $50,000 and, prior to that, $100,000.
There is no tax payable on withdrawals by retired super fund members who are over the age of 60. But a suggestion, which appears to have come from Superannuation Minister Bill Shorten’s office, emerged today that the government was considering the introduction of tax on super fund withdrawls for retirees with balances in the region of $1 million. Digital Pass $1 for first 28 Days
According to Treasury figures, the tax concessions on superannuation currently deprive it of at least $30 billion in revenue a year, against projected total budget expenditures of around $370 billion.
Without any rule change bringing in a higher rate of tax on some super contributions, the Treasury believes the amount of revenue it misses out on from super savers could climb to $40 billion by 2013-14.
Any attempt by the government to cut super concessions as it hunts for additional revenue is likely to create a storm of protest from the Coalition. Former Coalition Treasurer Peter Costello abolished the Reasonable Benefit Limit (RBL) on super concessions July 2007.
The superannuation industry, meanwhile, has been calling for an end to tinkering with the system after the government last year hiked the tax on super savings from 15 per cent to 30 per cent for people who earned over $300,000. The government has also cut the tax-free contribution limit that applies to all super contributos from $50,000 from $25,000.
At the weekend Opposition Leader Tony Abbott made an election commitment that a Coalition government would leave superannuation rules as they are.
Any tax levied on exiting funds by the Labor government measure would be lower than the 46.5 per cent tax levied under the RBL rules, but any tax at all would be noticed in a regime where the tax rate is currently zero.
Opposition superannuation spokesman Mathias Cormann said today: “This Labor government has a terrible track record on superannuation already, having imposed more than $8 billion in increased taxes on people’s retirement savings so far.’’
Mr Cormann was referring to the reduction in concessional contribution caps, which had originally been set at $100,000 a year.
