Super changes welcome and fair

Labor candidate for Bendigo, Lisa Chesters, today welcomed the changes to superannuation announced by the Federal Labor Government. Ms Chesters noted that the changes would make the system fairer, and would have no impact at all on the vast majority of retirees in the Bendigo Electorate.

“The Gillard Labor Government believes all Australians should have the opportunity to build adequate retirement savings. The Government has already taken the historic decision to increase superannuation contributions from 9% to 12% and the reforms announced today will further improve the fairness, sustainability and efficiency of the superannuation system,” Ms Chesters said.

The changes correct an anomaly which has provided open-ended tax concessions to some high-income earners. From July 2014, self-funded retirees whose income is over $100,000 will now pay some tax, but only at the rate of 15% and only on amounts in excess of $100,000. Superannuation payments up to $100,000 will still be tax free. In Bendigo there would be barely a handful of retirees affected by these changes.

“For retirees on very high superannuation incomes, it is still a very good deal. To put the changes into some context, from 2014 retirees on a superannuation income of $200,000 per year will pay the same tax as a worker on $68,000 per year.”

“I agree with Treasurer Wayne Swan’s observation that there is something wrong with a system where working Australians on average wages provide excessive support to those with millions in their account,” Ms Chesters said.”

Included in the announced reforms are changes to assist young and part time workers who often have small amounts of super in different funds. After full implementation, the changes will require inactive super amounts up to $3,000 to be transferred to the Australian Tax Office which will then hold them and release them to their owner, with interest, on request. These changes support low income workers by avoiding the erosion of small superannuation amounts due to fees and charges made by superannuation funds.

“Far from the ill-informed scare mongering of the opposition, I applaud the changes announced today as they continue Labor’s proud record of increasing fairness for all Australians.”