We are only a month away from Joe Hockey handing down the 2015 Federal budget and there is no doubt superannuation taxes will feature prominently. There has been all sorts of speculation as to what may happen, so I thought I might as well throw my opinion in. Please note, I have no “inside information” as to what will happen, so I am just taking an educated guess!
There are 3 main taxing points in relation to superannuation which I wish to look at:
It is the 3rd point which is now causing the most grief for the Government. This measure was announced in the 2006 budget by Peter Costello and was legislated from 1 July 2007. It was a policy no-one saw coming and was based on the Government’s excellent economic position at the time which was “cruising” on the back of record company profits and the lucrative mining boom. Unfortunately, the consequences of this “permanent” tax relief in today’s much tougher economic climate is that it is costing the country hundreds of millions of dollars (possibly billions) in lost revenue.
Given the fact something needs to change we think it would be sensible for the Government to do the following:
A bipartisan approach to superannuation (and in fact reviewing the whole tax system) would be a great thing to see – however the chances of that happening are extremely remote. It is always much easier in opposition to point out what is wrong with a system, than actually coming up with a viable, fair and workable alternative.
We can only hope – the superannuation measures announced in the 2015 budget will be fair, simple and affordable for all taxpayers!