Middle deemed 'the wrong target' for super reform
New analysis by Industry Super Australia of a proposal to tax super contributions with a flat 15 per cent discount on marginal tax rates show millions of Australians on low and middle incomes would face poorer incentives to save than they do now.
Industry Super Australia (ISA) CEO David Whiteley noted that while superannuation reform is certainly justified, wage earners on low and middle income rungs would not expect to be in the firing line when it comes to changes to the system.
"It is essential that super remains attractive for ordinary working Australians -- failing to do so will reduce retirement incomes and increase reliance on the age pension," said Mr Whiteley.
"We need to take the opportunity to set the system up for the long term and achieve policy stability."
According to the ISA analysis, if pursued in isolation, savers in the lower tax bracket between $18,200 and $37,000 would pay an extra 4.0 per cent on super contributions, whilst those on the second bracket up to $80,000 would pay an extra 2.5 per cent tax.
Mr Whiteley noted that with an estimated 35 per cent of all super tax concessions flowing to the top 10 per cent of savers, there is indeed scope to reassess and re-target concessions to lower income rungs in order to deliver a fairer and more adequate retirement income system.
"For reform to proceed there must be a credible framework to assess potential changes -- most particularly whether they enable an individual to deliver a fairer and more adequate retirement income system."