A leading tax expert has expressed disappointment as the Government continues with its “blinkered” decision to remove superannuation from the tax debate.
John Randall, superannuation partner at Deloitte, said the point of a review process was to have a serious, holistic think about what’s going to happen, but if GST, superannuation, or even fringe tax benefits were off the table then it wasn’t worth bothering, because they all linked together with the rest of the system.
“To make a bold statement they won’t change superannuation as part of the tax reform, well, I might as well stop writing my submission to the tax review now,” he said. “Something has to happen going forward because we can’t keep the regime going the way it is and I don’t think it would be a vote loser to say there would be changes to the taxation of high balances.”
He added changes to concessions could still happen even if the Coalition’s continues with its decision as saying there will be no adverse taxes in superannuation is different from saying there will be no changes at all around super. Other measures can still potentially be used, such as reducing the concessions (which is not a tax change), whether through imposing surcharge or reducing the caps.
If changes were to occur it is Randall’s position that they shouldn’t be implemented retrospectively as that would be detrimental to those who followed the law of the day, but going forward if members wanted to contribute at a higher level and ended up going over a benefit or a life time allowance it was their choice to make.
Tom Garcia, chief executive of the Australian Institute of Superannuation Trustees (AIST), said while it was sensible that superannuation taxes were left out of the Federal Budget, it is only reasonable that the super tax concessions are also reviewed in the name of keeping the entire system fair – and sustainable.
AIST’s submission to the tax review will be examining the full spectrum of taxes in the accumulation and post-retirement phases, assessing and testing a range of tax policies for their impact with regards to fairness, sustainability, gender bias, adequacy and how easily any changes can be implemented.
“Superannuation must remain a key part of the tax review and both sides of government need to recognise the importance of ensuring superannuation is both fair and sustainable. We don’t think that any tax options should be ruled out –we need to make evidenced-based decisions to get the best outcome for all Australians, all retirees and all taxpayers – both current and future generations,” Garcia said.