Turnbull may slash super tax breaks for an income tax cut
THE Turnbull government is examining the potential for cutting superannuation tax breaks for wealthy Australians so it can deliver an income tax cut.
While details were scant, Treasurer Scott Morrison gave a strong signal yesterday that changes were being actively considered.
In a speech to the superannuation industry, Mr Morrison said there needed to be a conversation about the sustainability of the super system.
He asked whether the costs of superannuation tax concessions could be used elsewhere, including personal income tax cuts.
"Could they, for instance, be directed to that purpose or to encourage participation in the workforce or to encourage productivity and growth more generally?" he said.
He said while the system should ensure "adequate retirement income", he did not want people banking on it as an estate planning vehicle.
"The whole point of the tax concessions we provide for superannuation is to ensure that those people who might otherwise have had to have lived a life on welfare in their retirement can live a life of independence," Mr Morrison said.
"That's where we need to target those concessions so they are most principally focused on that as the outcome."
Various groups have recently proposed higher taxes or lower caps on superannuation contributions.
Labor wants a 15% tax on super earnings over $75,000 a year and to tax super contributions of people earning more than $250,000 a year.
Shadow Treasurer Chris Bowen described Mr Morrison's comments as a "thought bubble", but said it showed the government had "admitted" change was needed on superannuation tax breaks.
Mr Bowen said Labor had dragged the government "kicking and screaming" into the superannuation debate and he called on Mr Morrison to release a full policy for debate.
Greens Treasury spokesman Adam Bandt backed the idea of cutting super tax breaks, but urged Mr Morrison not to link it to income tax cuts.
Mr Bandt said the government needed instead to focus on increasing revenue and fairness in the tax system.