Apr 2 2018
    Financial Review

Labor planning to top up parents' superannuation


Labor is planning to apply the superannuation guarantee to taxpayer-funded paid parental leave to help address the imbalance in the retirement savings between men and women.

But the ALP is yet to decide whether it will accelerate the increase in the rate of the guarantee from the current level of 9.5 per cent to the target rate of 12 per cent, after the original trajectory introduced by the Gillard government was frozen for seven years by the Coalition.

With the superannuation guarantee to feature in the May budget, Revenue and Financial Services Minister Kelly O'Dwyer warned Labor against meddling with the current trajectory in an environment of flat wages growth.

"Increasing the superannuation guarantee earlier would only mean lower wages for Australian workers," she told The Australian Financial Review.


Shadow treasurer Chris Bowen left open the option.

"The Liberal Party is ideologically opposed to our compulsory super system and the increase in the Super Guarantee – they've delayed it twice now," he said.   

"The Turnbull government will find any excuse to break its commitments on superannuation, which has seen millions of Australian workers with lower retirement incomes as a result."

Labor, however, is definitely considering applying the guarantee to paid parental leave as part of a policy to prop up the retirement savings of women.

Mr Bowen indicated this last week when he pledged Labor would not unveil any more policies tinkering with the tax treatment of super, but there were other areas at which it was looking.

"There are other matters in superannuation, like gender equity and the superannuation guarantee, which we continue to be concerned about, particularly gender equity, we will have more to say in that space," he said.

In 2012, the Gillard government passed legislation to increase the 9 per cent super guarantee by annual increments with the aim of reaching 12 per cent by July 1, 2019.

The Abbott government, which inherited a rate of 9.25 per cent, froze it at 9.5 per cent in the 2014 budget for four years and delayed the increase to 12 per cent until July 1, 2021.   
Tax on contributions

Under a second change legislated later in 2014, it extended the freeze at 9.5 per cent until July 1, 2021 and the 12 per cent rate until July 1, 2025.

The federal budget to be handed down in May will reflect the increase from 9.5 per cent to 10 per cent that is scheduled for July 1, 2021.

The government says it has no plans to change this again whereas Labor is yet to state its plans.

Because the super guarantee is paid to many workers as part of their salary, they pay a lower rate of tax on the super contributions than they otherwise would pay as income tax. Each 0.5 per cent increase is worth almost $2 billion a year in lost revenue to the budget.

In February, the Grattan Institute argued the 12 per cent target should be axed to deliver a budget saving.   

It argued that the current rate of 9.25 per cent was adequate in that it would provide an income in retirement equivalent to 79 per cent of the pre-retirement wage for a median worker.

It further argued that the super guarantee was detrimental for low-income earners because every extra dollar in super would reduce age pension payments in retirement because of the pension assets test.

It also contended that increasing the guarantee would suppress wage growth, meaning lower increases to the age pension which is linked to wage growth.

whiteknight wrote on Apr 3^rd, 2018 at 8:03am:



Oh dear. The leftist, progressive Grattan Institute?

Who would believe the LIES coming out of the union controlled Labor Party ?

Grappler Racist Filth wrote on Apr 3^rd, 2018 at 1:14pm:



Then there's family benefits and tax concessions along the way....... so the reality is much higher wage difference per hour between Jo and Joe...

Joe, BTW, is Joeleen, a single woman with no kids...

Where is all this money coming from?  retirees again?

As Bull Shorten sends Labor down the tube and alarms the sleeping Lefties.

Pensioners BEWARE Labor will rob you blind!!!!


Bill Shorten’s plan to dismantle ‘millionaires’ welfare’
The Australian1:41PM March 14, 2018



Federal Opposition leader Bill Shorten has defended his tax reform plan against attacks from Prime Minister Malcolm Turnbull that it will hurt pensioners, insisting his policy would dismantle “millionaires’ welfare”.

Visiting Brisbane to sell yesterday’s announcement to abolish cash rebates for tax credits on shares, Mr Shorten rejected Mr Turnbull’s criticism that Labor would hurt battlers not the rich.

“There are some people who will lose some government money, but they’re getting this government money and they’re paying no income tax … I think most Australians when they discover this system exists will probably want to know why they didn’t know about it before, and secondly say that doesn’t make sense,” Mr Shorten said, at a mechanics workshop in the Brisbane electorate of Oxley, held by Labor’s Milton Dick.

“Labor’s up for a tough debate.”

“How can it be fair that a few people, are able to get a tax refund when they’ve paid no income tax? That’s effectively the loophole we’re shutting,” he said.

“Now, we’re not saying it’s illegal. We’re saying it’s a tidy little arrangement the nation can no longer afford. Why should the mechanics here who are supporting their kids, working hard at their trade, they pay their income tax. Why is it that they can’t get a tax refund if they pay no income tax? This is a particular benefit which is created by John Howard, at a particular time when the Commonwealth government had a lot of money.”

“Well, times have changed.”

He described the current system as “millionaires’ welfare”.

“When you give millionaires hundreds of thousands of dollars in taxpayer money, that’s not welfare for the low income, that’s millionaires’ welfare,” Mr Shorten said.

“We are going to stop multi-millionaires’ welfare funded by the taxpayers of Australia.”

He ruled out offering an exemption for full pensioners, under the policy.

“When we talk about full pensioners, a very small number — it’s not even one per cent — will be marginally affected,” Mr Shorten said. “We’re offering the best deal for pensioners in this country.”

Shorten’s cash grab ‘to manage budget’

Earlier, Malcolm Turnbull savaged Bill Shorten’s “cash grab” in axing cash refunds for franking credits, arguing the Opposition Leader was “robbing” pensioners and retirees and was wrong to claim the policy would mostly impact the wealthy.

The Prime Minister said the Opposition Leader’s $59 billion crackdown on dividend imputation would barely touch the rich, with nearly all those impacted by the policy being retirees earning less than $87,000 a year.

“Bill Shorten is robbing pensioners and self-funded retirees of tax refunds. He’s effectively taxing them twice,” Mr Turnbull said.

“This is an attack targeted on people on lower and middle-incomes. It is taking money from people who have worked and saved all their lives and are battling.

“So he can dress this up as much as he likes, but I tell you Australian pensioners, self-funded retirees, know who it’s targeted at. It’s targeted at them.

“Bill Shorten is coming for the savings, for the incomes, for the lifestyles, for the affordability of the cost of living of people on lower and lower middle-incomes in retirement.”

Mr Shorten said this morning Labor’s policy would have a “marginal” impact on “a few pensioners”, declaring his policy was targeted at ending largesse to the “top end of town”.

“How can we have a system where someone gets a $2.5 million refund from the government to pay no income tax, it is ridiculous,” Mr Shorten said.

“This scheme, while it will have a marginal affect on a few pensioners, is (mostly) going to the top end of town.

“How can it be that tax payers — mums and dads, nurses, teachers and doctors — are going to work, paying taxes to the Australian Taxation Office and the Australian Taxation Office is cutting a tax refund cheque to multi-millionaires who pay no income tax?”

Mr Shorten said he would fight the government’s “scare campaign” because his policy was about fairness.

“I’m going to choose the battler over the top end of town and Mr Turnbull is using a few pensioners as a sort of human shield to justify featherbedding the very rich who are getting a tax loophole which is simply unsustainable,” he said.

Mr Turnbull said the policy would hit 200,000 pensioners and Labor was pursuing it because the party was not able to manage the budget. He said taxes would increase by $200bn over a decade under Labor, equating to $8,000 per Australian.

“It’s a cash grab because he cannot manage the budget. He knows that his spending plans need a huge tax grab,” Mr Turnbull said.

“Fifty per cent of the individuals that will be hurt by this tax grab are on incomes of less than $18,000. These are pensioners and retirees ... he’s coming after them and to dress this up as some sort of an attack on the wealthy is nonsense.”

https://www.theaustralian.com.au/national-affairs/bill-shortens-cash-grab-robbin...