Well the following article says it all.....But Tony and co would...

Well the following article says it all.....

But Tony and co would rather smash pensioners and students and the disabled into to economic ruin than take another dollar out their rich mates pockets!

Economic lightweights don't have the courage for genuine tax reform!

"Tax breaks on superannuation, capital gains to cost $300b."

"Tax breaks on capital gains and superannuation could cost almost $300 billion over the next three years, budget figures show, renewing calls for the Abbott government to scale back concessions.

Economists said exemptions on fresh food, education, health and ­financial supplies from the goods and services tax – estimated to cost almost $78 billion over the period – also need to end.

Updated forecasts from Treasury in the federal budget papers show the capital gains tax exemption on the family home, the 50 per cent CGT discount and superannuation concessions remain the biggest costs to the budget.The figures are an update on Treasury’s tax expenditure statement released earlier this year. It had forecast out to 2017-16, whereas the budget papers forecast further out to 2017-18.

Since most household saving is concentrated in property and superannuation, the cost to federal revenue could grow as a percentage of GDP if no action is taken to tackle the budget sacred cows. Bank of America-Merrill Lynch chief economist Saul Eslake said CGT and super tax breaks should be scaled back, but not totally eliminated.

Deloitte Access Economics partner Chris Richardson said the Commission of Audit had already suggested including the family home in the pensions assets test. “Treasury has considered the potential for something similar around CGT,” he said.

CONCESSIONS UNDERMINE FAIRNESS OF SYSTEM
Grattan Institute chief executive John Daley said many of the concessions, especially for superannuation, were undermining the fairness of the tax system. Middle-income earners were facing bracket creep while the wealthy benefited from the tax breaks.

Economist Steve Keen said top income earners benefited most from the CGT and super concessions.

“They drive up the value of the assets that make the rich richer – shares, rental property they own, and their residences which they are encouraged to over-develop,” he said. “If these had been tackled rather than slugging the bottom 20 per cent for about 5 per cent of their incomes, all the social safety net provisions that were stripped in this budget could have been maintained.” But AMP chief economist Shane Oliver said if tax concessions were removed people would stop saving, or channel the money into other areas to help reduce their taxable income.

“If you eliminate those concessions people won’t put their money in bank accounts – they will shift money into areas such as negative gearing, so the savings won’t be as great as Treasury estimates,” he said.

This possibility is noted by Treasury in the budget papers. It said its estimates could not be interpreted as the exact loss to federal revenue as “there may be significant changes in activity were tax expenditures to be removed”.

Association of Superannuation Funds of Australia chief executive Pauline Vamos warned against cutting super concessions. She said the ongoing cost of the tax concessions was likely to be around 1.5 per cent of GDP.

“Savings are relatively mobile, and people will often place their money into investment vehicles where they receive the most favourable tax treatment,” she said. “When you pull one lever, such as changing the tax concession on super, there is a strong likelihood you will see money flow into other vehicles, such as negative gearing.”

It’s also likely that if the GST base was broadened, or the rate was increased, there would be exemptions for low-income earners, which also comes at a cost to the budget.

BACKING FOR WIDER TAX REFORMS
But Mr Oliver backed wider calls for GST reforms, saying exemptions for fresh food, health and education costs had no economic rationale.

“It creates a distortion when we are not paying GST on the goods and services we consume the most of,” he said.

Mr Eslake said the $80 billion cut in funding for the states and territories heightened the need to fix the GST. Apart from food, education and health, a number of other areas such as financial services, residential and community care services, pharmaceuticals, child care services, water and sewerage charges and private health insurance premiums are also exempt. Mr Eslake said if all these were removed, it would raise more than twice as much as the states and territories will lose from the proposed funding cuts.

Or if Tony Abbott was brave enough to raise the GST rate from 10 per cent to 12.5 per cent, the government could reap an additional $153 billion (over the seven years to 2024-25, assuming no material change in consumer behaviour), Mr Eslake said.

Mr Richardson said GST reform would be a sensible part of long-term budget reform.

Treasury predicts superannuation tax breaks will cost $36.25 billion in 2014-15. The super concessions will in total cost $171 billion over the three years. The other big costs is the capital gains tax exemption on the family home (estimated to grow to $57 billion over the three years to 2017-18) the 50 per cent discount on capital gains (which could hit $70.5 billion over the same period) and the cost of CGT discounts for individuals and trusts (estimated at $28.3 billion)."

http://www.afr.com/p/national/tax_breaks_on_superannuation_capital_fivqxKm050y3iAKE0WppcI