Labor to cut superannuation tax concessions for high income earners, Chris Bowen says

Extract from ABC News

PM

By political correspondent Louise Yaxley

Updated about 7 hours ago

Video: Chris Bowen addresses the National Press Club in reply to the budget. (National Press Club)

Photo: Chris Bowen says the superannuation plans will be taken to the next election (National Press Club)

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Shadow treasurer Chris Bowen has promised Labor will cut superannuation tax concessions for high income earners while backing $2.4 billion in budget savings.

Addressing the National Press Club in Canberra today, Mr Bowen said Labor would raise $14 billion in a decade by putting a 15 per cent tax on super earnings more than $75,000 a year and taxing super contributions for incomes more than $250,000.
"Nobody particularly enjoys getting a reduced tax concession, and a politician telling people that a tax break can no longer be afforded is never going to be universally popular," he said.
"But it has to be said: the taxation concessions in superannuation earnings in retirement are unsustainable.
"Australia simply can't afford them."

Audio: Listen to Louise Yaxley's report (PM)

Mr Bowen said the tax concessions flowed largely to high income earners, with the Federal Government's Murray Review showing 38 per cent of total superannuation tax concessions went to the top 10 per cent of income earners.
However, Prime Minister Tony Abbott has called Labor's plan an attack on people's savings.
"This is one of the fundamental differences between the Coalition and the Labor party, we respect people's savings," Mr Abbott said.
"We don't think that superannuation is government money, we think it's your money.
"But Bill Shorten wants to tax your super to fill his $58.6 billion budget black hole.
"He regards your super as his piggy bank to break open whenever he needs money, and I just think that's dead wrong."

Labor 'welcomes' an election on superannuation: Bowen

Mr Bowen said Labor was undaunted about comparisons with the Government on superannuation.
"Tony Abbott has had just about every position imaginable in superannuation," Mr Bowen said.
"He stands for everything and believes in nothing.
"So if Tony Abbott wants to have an election about superannuation, we welcome that very much."

The earnings concession on superannuation is the fastest growing tax concession in the entire federal budget... The rate of growth dwarfs the increase in the scale of the age pension.

Chris Bowen

He said the superannuation system needed to be tackled and that posed a challenged for budget sustainability.
"Tony Abbott and Joe Hockey expect us to believe that this is affordable, as they say it with a straight face," he said.
"They promise to never, ever change it.
"If they really believe that, they are nothing short of fiscal vandals."
Mr Bowen said superannuation tax concessions for higher income earners were being "paid for by taxes on mums and dads".
"Someone has to show the courage to say it and to deal with it," he said.
"And Labor's decided to do not only that, but to do it before an election, and seek a mandate to deal with it."

Cost of super concession to reach $30 billion

Mr Bowen said the Government's budget papers showed the cost the concession was set to double to more than $30 billion in the next four years.
He said superannuation assets were projected to reach more than 160 per cent of GDP, up from just over 120 per cent today.
Meanwhile, tax-free superannuation assets in retirement phase, which count for about 30 per cent of total superannuation assets today, were expected to grow to 44 per cent in the next 30 years.
"That's exactly why the earnings concession on superannuation is the fastest growing tax concession in the entire federal budget," he said.
"The rate of growth dwarfs the increase in the scale of the age pension."
In his budget reply speech, Mr Bowen said Labor would back savings measures worth $2.4 billion, including changes to the tax on working holiday visa holders, the abolition of the large family bonus and the removal of the zone tax offset for fly-in, fly-out workers.
He said Labor would also support of changes to work-related car expense deduction methods and the implementation of the no-jab, no-pay policy.
However, Mr Bowen did not spell out exactly what Labor would do about the $80 billion of health and education funding expected by the states that the Government has said it cannot afford.
"We'll have plenty more to say about education funding," he said.
"Again, we'll come back to the fact that we are going to talk to the states and territories about their needs in a collaborative fashion, and talk to them about exactly what can be delivered when.

"But you should not underestimate our commitment to a better and fairer education funding model."