In this current financial year, an estimated $21 billion in superannuation tax concessions will flow to the richest 10% of Australians – more than is spent on either child care subsidies, government schools or the estimated $13.6 billion that it would cost the government to include dental in Medicare.
The proposed changes would only affect around 0.5% of people with superannuation and would have been a very small but vital attempt to redress the gross imbalance in the system.
Australia Institute research shows the vast majority of people under 30 will never have more than $3 million in superannuation.
“The government’s watering down of the changes, by indexing the $3 million with inflation, and ruling out taxing unrealised capital gains will be of great comfort to those who abuse the superannuation system in order to avoid paying tax,” said Greg Jericho, Chief Economist at The Australia Institute.
“The tax system needs reform to make it fairer and to remove distortions such as the capital gains tax discount which has greatly contributed to the housing affordability crisis.
“These changes do little to rein in massive inequality of the superannuation tax system.
“The government’s decision today will embolden those who prefer a tax system that favours the rich.”
