Until 2012 all super contributions paid by employers were taxed at 15 per cent, regardless of the employee's tax band. The 15 per cent rate amounted to substantial concession for high earners on the top rate and an impost for low earners beneath the tax-free threshold. Prime Minister Malcolm Turnbull and Treasurer Scott Morrison during question time on Tuesday. Credit:Alex Ellinghausen In its second to last budget, the Gillard government imposed an extra contributions tax of a further 15 per cent on high earners taking home more than $300,000. In April last year Labor promised to cut the threshold to $250,000, taxing a further 110,000 people at the higher rate. At the time then treasurer Joe Hockey attacked the proposal, saying "only the Labor Party wants to increase taxes on superannuation". The budget decision to cut the threshold to $180,000 will draw an extra 244,000 taxpayers into the higher tax net, giving earners on the top 45 per cent rate a discount for contributions of 15 points instead of the present 30 points. In 2013-14 only 380,000 out of 13 million taxpayers earned more than $180,000.

The lower threshold will most likely come into effect in June 2017 when the temporary deficit reduction levy ends, easing the transition for high earners. Budget takes aim at highest earners: Prime Minister Malcolm Turnbull. Credit:Alex Ellinghausen Labor's championing of a lower threshold will make it difficult for it to attack what will be the biggest revenue-raising measure in Treasurer Scott Morrison's first budget. When launching his own proposal to cut the threshold last year, Labor's Chris Bowen said it would make superannuation "better, fairer and more sustainable". In November, Mr Morrison warned an industry conference that super should not be seen "as an open-ended savings vehicle for wealthy Australians to accumulate large balances in a tax-preferred environment, well in excess of what is required for an adequate retirement". "When Australians see the government supporting the accumulation of enormous superannuation fund balances in a tax preferred, and, in retirement, a tax-free environment, the confidence in the system is significantly undermined," he said.

His first budget might also tighten the generous caps on how much high earners can contribute to super out of concessionally taxed funds. At present $30,000 for most taxpayers, and $35,000 for those over the age of 50, the annual caps might be cut to nearer $20,000. Mr Morrison is also looking at tightening the separate "non-concessional" cap that allows contributions out of after-tax wages of up to $180,000 a year. Sky News reported on Tuesday that a draft script of an advertisement to be screened by the government after the budget referred to new and important changes being made to Australia's tax and super systems. It said super needed to be flexible enough to work for everyone, particularly low earners. A spokesman for Mr Morrison said the government would not respond to speculative reports and the budget would be handed down on May 3. Federal budget 2016: latest news