But in their new estimates, published last week, they say those super tax concessions will now cost the government $59.5 billion in 2025-26, which is $9.4 billion more than they were forecasting in January.
Would be chealer just to ditch Super and pay pensions? Or remove many of the tax concessuons anyway. That horse has bolted though I guess.
Earlier this year, the economist Chris Richardson said our super system was already acting like “a reverse Robin Hood” because it was taking money from poorer Australians and giving it to the rich.
Ahhh
I think the article is a bit thin. Sure the total dollar value is going up, but that is not due to a policy change (mainly explained by inflation)
It then goes off on a tangent about when tax is collected, while acknowledging that it is hard to compare systems and at least at a headline level it is pretty much the same
Finally we get to the meat, high earners get more benefit, but it doesn’t really explain why that shouldn’t be so i.e. intuitively people would expect they get more total $ benefit because they contribute more
It would be really easy to show that the tax benefit increases as you earn more, just bung up a chart with marginal tax rates, then add a line 15pp (percentage points) below it to show that you get more and more benefit as you earn more. Then graph the benefit against balance with some income assumptions - get people wondering why someone with $2m+ in super earning normal returns needs a $30k+ tax concession in super each year
Where is the discussion on potential solutions? Why couldn’t we tax super contributions at marginal tax rate minus 15pp rather than flat rate? Should we give blanket concessions on earnings? What would it mean to tax withdrawals?
With div 293, we essentially do tax super at marginal tax rate minus 15pp.