Australia’s high income earners are likely to receive a cut in their superannuation taxes of up to 50% after the government struck a deal with independent senators that will give subsidies to lower income workers to help them save, it has been reported.
Under the reforms announced in the budget, the superannuation surcharge will be reduced from the current level of 14.5% to 7.5% for those earning $100,000 and above.
The Government also wants to extend co-contribution payments for low- and middle-income workers to invest in superannuation. This will see co-contributions increased to $1.50 for every $1 invested by the employee earning up to $58,000.
Previously, the government co-contributed on a dollar for dollar basis for workers on incomes up to $40,000.
Prime Minister John Howard welcomed the deal with the Australian Democrats, stating: "It will, over time, lead to people taking a more active interest in their own superannuation."
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