Australian Treasurer Says Superannuation Tax Remains

by Mary Swire, Tax-News.com, Hong Kong

23 October 2001

Treasurer Peter Costello has confirmed that the 15 per cent tax on superannunation contributions in Australia is set to remain in place if the current ruling coalition government is re-elected in the November elections.

'It's pretty complicated,' Mr Costello told Adelaide radio 5DN. 'The fact of the matter is that the tax on the way in is less than your marginal income tax rates, so it's still better to put money into superannuation than to take it as income. But that system, having commenced 15 years ago, would be incredibly complicated to unravel now.'

He added: 'Some people have paid tax on the way in and if you suddenly change all of that they've got post-tax money in these funds, and extricating it would be a very complicated thing.'

The industry has called upon the major political parties to abolish or at least cut taxes on super contributions and earnings because it diminishes the money earned for pensioners; it wants the final payout taxed instead.

If the government is re-elected, Mr Costello pledged that it would commission an inquiry into super funds supervision. He said: 'Nobody should be worried about any of the large funds, but there are a lot of small funds, sort of small company funds, and I think it's now time to look very carefully at them and ensure that they have adequate provisioning, i.e., enough assets to cover their liabilities.'

Recommended