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Senior Labor MPs were tight-lipped on Tuesday on the prospect of changes to super tax concessions for high-income earners, after former minister Simon Crean said super should escape tinkering.
The SMSF Professionals Association of Australia, which represents professional advisers to the self-managed super sector, said there was "growing speculation" Labor would reduce the threshold at which a 15 per cent tax on concessional contributions would apply to $180,000.
Legislation for the 15 per cent tax, which was introduced in last year's budget but targeted people earning more than $300,000, has yet to be introduced to Parliament.
SPAA technical director Peter Burgess said another rumoured change was an increase in the tax on super-fund earnings from 15 per cent to up to 20 per cent. "But this will have an impact on high and middle-income earners, so is considered less likely," he said.
Industry Super Network chief executive David Whiteley said that industry super funds, which represent 20 per cent of total funds under management but about half of the Australian workforce, were concerned by the proposed abolition of the low-income tax offset under a Coalition government.
He said about 3 million people, including about half of industry fund members, benefited from an offset, which applies to people with a taxable income below $66,667.
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Superannuation groups are urging the government to quarantine the $1.5 trillion super sector from structural changes or one-off hits in the May budget, asking that retirement savings be protected from budget tinkering.
Senior Labor MPs have been tight‑lipped about any changes. There is speculation about potential measures, but public comment has been limited and former minister Simon Crean has urged against tinkering with super.
The 15% tax on concessional contributions was in last year’s budget and was originally targeted at people earning more than $300,000; legislation has not yet been introduced to Parliament. Industry groups say there is growing speculation Labor could lower the threshold so the 15% tax would apply from about $180,000.
There are rumours the tax on super‑fund earnings could be raised from 15% to as high as 20%, but the SMSF Professionals Association’s technical director said this would hit high‑ and middle‑income earners and is considered less likely.
The low‑income superannuation tax offset is a benefit that applies to people with taxable income below $66,667. Industry Super Network says about 3 million people—including roughly half of industry fund members—benefit from this offset, and the network is concerned by proposals to abolish it under a Coalition plan.
SPAA has flagged 'growing speculation' that Labor might reduce the income threshold for the 15% tax on concessional contributions to $180,000 and noted rumours about raising the tax on super‑fund earnings, both of which would affect members of self‑managed super funds.
Industry super funds represent about 20% of total funds under management but cover around half of the Australian workforce, which is why industry groups say proposed changes could have broad impacts.
Everyday investors should watch developments in the May budget and for any legislation introduced to Parliament affecting concessional contribution thresholds, the tax on super‑fund earnings, and the low‑income offset, since these changes would determine who is most affected.
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