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A major pension change by the Albanian government could affect 200,000 people under the age of 30, thousands more than initially reported.
Labor wants 30 per cent tax on those with $3 million
The government says only 80,000 people would be affected
Financial Services Council fears there are 204,000 under 30s
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Prime Minister Anthony Albanese’s government has been warned that more than 200,000 Australians under the age of 30 risk being affected by Labor’s pension changes.
A bill was released this week with a plan to double the concessional contribution rate to 30 percent for those with more than $3 million in retirement savings.
The government says this will only affect 80,000 people, or 0.5 percent of the population, while everyone else continues to pay a reduced tax rate of 15 percent.
But the Financial Services Council, which represents retail super funds, says the proposal would harm 500,000 existing taxpayers, including 204,000 under 30s.
Acting chief executive Spiro Premetis said the planned $3 million cap would end up hurting young people more as their retirement savings increased.
“Leaving the cap stuck at $3 million will mean that in today’s dollars, a 30-year-old will have an actual cap of around $1 million, calling into question the intergenerational fairness of a non-indexed cap,” he said. he declared.
Prime Minister Anthony Albanese’s government is being warned that more than 200,000 Australians under the age of 30 risk being affected by Labor’s pension changes.
Treasurer Jim Chalmers unveiled the plan in February in a bid to save the government $2.3 billion a year in lost revenue.
Dr Chalmers and deputy treasurer Stephen Jones argued this week that it was only a modest proposal.
“This modest adjustment to be implemented after the next election will only affect a handful of people,” they said.
“The change will not change the amount of money people can invest in super, and it applies to future income – it is not retrospective.”
“The amendments are consistent with the Government’s proposed retirement objective of preserving savings to provide income for a dignified retirement, alongside Government support, in a fair and sustainable manner.”
The changes would come into effect on July 1, 2025 if Labor is re-elected that year.
Shadow treasurer Angus Taylor said it would be a broken promise.
“Above all, this is a broken promise,” he said.
“Labor said before the last election that they would not change the rules around superannuation. They wouldn’t raise taxes.
The Financial Services Council, which represents retail super funds, says the proposal would harm 500,000 existing taxpayers, including 204,000 under the age of 30 (pictured, Sydney’s Royal Randwick Racecourse).
“It’s a broken promise. This means higher taxation on pensions.
During the May 2022 election campaign, Mr Albanese told a Sky News journalist that he would not interfere with retirement savings if Labor were elected.
“We said we didn’t intend to make any big changes,” he said.
Consultations on the super proposal close on October 18, with the Greens indicating last month they would vote with the Coalition to block the legislation unless super was added to paid parental leave.