Shades of simplicity?
The PM calls Tony Abbott an "economic simpleton" after he claims government super policy has "shades of Cyprus". Annie O'Rourke & Jannette Cotterell discuss what this rhetoric signals.PT10M13S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-2hg4n 620 349 April 8, 2013
Labor has gone on the offensive over superannuation, accusing Tony Abbott of a tax slug that will rip $4 billion from national savings.
A Facebook campaign started on Sunday says under Labor a mere 16,000 people ''with millions'' will pay a fair amount of tax. By contrast under the Coalition 3.6 million ''of the lowest paid'' will pay more.
Opposition Leader Mr Abbott confirmed on Sunday that the Coalition would abolish Labor's low-income super contribution, which cuts tax to zero on 3.6 million super accounts. ''We have said from the very beginning programs funded by the mining tax wouldn't go ahead because we're going to scrap the mining tax,'' he said. ''The mining tax which funds it hasn't raised any revenues. No one should think this program is safe.''
Leader of the Opposition, Tony Abbott. Photo: Louie Douvis
Acting Prime Minister Wayne Swan released figures showing 910,000 of the low-income earners the Coalition would hit lived in Victoria. Two-thirds were women.
''Tony Abbott has spent the past two weeks fuelling rumours about the government's superannuation reforms to keep his $4 billion raid as secret as he can,'' Mr Swan said. ''He says we're raiding super when we make modest changes that will affect 16,000 of the most wealthy Australians - by his own test, what is he doing if he goes after the super savings of 3.6 million, as he said he will do? His raid hits 225 times as many people as our reforms announced on Friday.''
The Coalition superannuation policy is not yet finalised. Spokesman Mathias Cormann held out hope of another measure to assist low-income earners in place of the Labor program.
''We have long been on the record as wanting to revisit both concessional contribution caps and super co-contribution benefits for low-income earners,'' he said. This would happen ''as soon as the budget is in a strong enough position to afford it''.
''Over the past five years, Labor has increased taxes on super by more than $8 billion - predominantly targeting low and middle-income earners. If it is re-elected in September it will do the same again.''
Former head of the government's super review Jeremy Cooper, now head of retirement incomes at Challenger, backed Labor's decision to boost from zero to 15 per cent the tax rate on earnings supporting income streams of more than $100,000 a year. He said: ''On Treasury's numbers it will only affect 16,000 Australians. It is hard to have too much sympathy for such an elite group.''
Mercer senior partner David Knox said while earnings supporting high payouts would be more highly taxed, he did not think that was ''unreasonable''.
Asked why Labor did not go further and outlaw untaxed lump sum withdrawals, Superannuation Minister Bill Shorten said the government had not wanted to ''startle the horses''.
Asked twice on Sky News whether she had wanted to go further, Finance Minister Penny Wong deflected the question, saying she was ''certainly never going to be one of the people that discuss what might or might not have been said in cabinet''.