Submission to the Inquiry of the Senate Standing Committee on Economics into Superannuation (Excess Transfer Balance Tax) Bill 2016 [Provisions] and Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 [Provisions]
Our 2016 working paper, A better super system analysed the impact of the Government’s proposed changes to super tax breaks as they were announced in the 2016-17 Budget, and the ALP’s counter proposals.
This submission briefly updates our analysis to reflect further changes to the Government’s package of super tax reforms, and the ALP’s subsequent response. It shows that the major parties disagree about relatively little in this debate. Any combination of the packages on offer would improve the current system.
While the packages of both Government and ALP would be big steps forward, neither goes far enough. Even after the reforms, super tax breaks will still mostly flow to high-income earners who do not need them. The budgetary costs of super tax breaks will remain unsustainable in the long term. Further changes to super tax breaks will be needed in future.