And it confirms what I think we already knew....Retirement review reveals how much the wealthy benefit from government supportReport sure to spark debate over the intended purpose of superannuation and tax breaks that favour the rich.
Australia’s wealthiest are given twice as much financial support as those on the lowest incomes, says a new government report on the state of the nation’s retirement income system.
The report is sure to spark debate over the intended purpose of superannuation, as well as other tax breaks that favour the rich.
It revealed that government payouts and tax concessions are, by retirement, worth more than $700,000 to Australia’s top 10 per cent of earners, but just $350,000 to the nation’s lowest earners.
So far, the three-person panel leading the retirement income review is not recommending any changes. It has, however, tabled a paper intended for community response and has signalled its interest in making the system fairer for younger taxpayers as well as for those in retirement.
The paper also points out how our ageing population may eventually put pressure on remaining workers to fund older people.
“Age Pension expenditure is funded from government revenue, affecting the tax impost on working Australians,” said Treasurer Josh Frydenberg.
“Australia’s ageing population means there will be a declining number of workers for every retiree. It is, therefore, important the retirement income system does not place an undue fiscal burden on future generations.”
However, in contrast to this supposition, the paper also showed that super savings had increased from $229 billion in 1995 to $2.9 trillion today and that reliance on the Age Pension had dropped from 80 per cent to around 68 per cent.
While the staggering increase in accumulated super means more self-funded retirees and fewer people reliant on the Age Pension, the paper warns against the use of super by those in higher income brackets as a way to accumulate wealth or pass on wealth to ensuing generations.
“The retirement income system is not intended to boost private savings per se, nor is it intended to be a source of savings for the purchase of large assets during an individual’s life (such as housing), or to assist with wealth accumulation in order to provide for inheritances,” says the paper.
One table in the report clearly illustrates how wealthier people benefit from government support and generous tax concessions.
While some are critical of these tax concessions, others defend them, saying that wealthier people pay more tax over their lifetime and that outlay for the pension outweighs revenue lost on favourable tax treatment of super.
However, according to research from Anglicare and Per Capita, tax concessions to the wealthiest fifth of households cost the budget about half as much as the total cost of welfare payments.
The full article with figures and charts can be found here...https://www.yourlifechoices.com.au/news/govt-looking-after-top-end-report?utm_medium=email&utm_campaign=Volume%2019%20Issue%20316%20Daily%20eNews%20Monday%2025%20November&utm_content=Volume%2019%20Issue%20316%20Daily%20eNews%20Monday%2025%20November+Version+A+CID_224e19f7ce35ca5cdbd20fb9f7d30d6b&utm_source=campaign%20monitor&utm_term=Report%20sparks%20fight%20for%20fairer%20pension%20and%20squabbles%20over%20super
