Labor says Joe Hockey's super changes show Coalition's 'twisted values'

Updated

The Opposition has labelled the Government's decision to end the super co-contribution for low-income earners while scrapping a 15 per cent tax on super earnings over $100,000 as deeply unfair.

Labor has also accused the Government of economic hypocrisy, saying the Coalition is blowing out the deficit, despite its election campaign claims of a budget emergency.

Speaking on the ABC's Lateline program, Acting Opposition Leader Tanya Plibersek hit back at Government critics who have dismissed Labor's plan for superannuation pension earnings.

Labor went to the election promising a 15 per cent tax on superannuation pension earnings over $100,000.

Treasurer Joe Hockey said on Wednesday the policy was too complex and it would be scrapped.

The Treasurer has also decided to cut superannuation co-contributions for low income earners.

Winners and losers ABC business editor Peter Ryan has spoken to Industry Super Australia chief executive David Whiteley about the Government's plan to roll back the proposed 15 per cent tax on superannuation earnings over $100,000 a year.



"What we also need from the Government, and I think from the super industry and all parliamentarians, is an urgent solution to the facts that 3.6 million Australians face paying more tax on their super contribution than they may do on their take home pay," Mr Whiteley told The World Today.



Listen to Peter Ryan's interview here ABC business editor Peter Ryan has spoken to Industry Super Australia chief executive David Whiteley about the Government's plan to roll back the proposed 15 per cent tax on superannuation earnings over $100,000 a year."What we also need from the Government, and I think from the super industry and all parliamentarians, is an urgent solution to the facts that 3.6 million Australians face paying more tax on their super contribution than they may do on their take home pay," Mr Whiteley told The World Today.

According to the chief executive of Industry Super Australia, David Whiteley, this would result in 3.6 million Australians on low incomes being out of pocket $500 a year, while just 16,000 of the nations top earners will benefit from the scrapping of the 15 per cent tax.

Ms Plibersek said the Government's move does not appear to be a fair one.

"It's not surprising that people who earn a living from superannuation prefer there be no changes to superannuation," she said.

"But the question you've got to ask is: is it fair to allow people who are already on a very good wicket with superannuation, who are claiming the highest benefits, who are getting the highest tax advantage, to allow them to continue to claim very high tax advantages, and the money to pay for that comes from making low and middle income earners pay more for their super, or get less tax benefit for their super?"

But the chief executive of the Association of Superannuation Funds, Pauline Vamos, said news of the scrapping of the contentious 15 per cent tax will be a relief to those nearing retirement.

"Most people nearing retirement or in retirement will be very relieved because there's been a lot of uncertainty around this tax in terms of how it was going to be calculated and applied," she said.

"But there was also a growing concern that it would apply to relatively low balances: so those balances that really are not going to sustain the average person or the average couple a comfortable standard of living throughout their retirement."

Bowen says changes show Coalition's 'twisted values'

Earlier, Opposition treasury spokesman Chris Bowen lashed out at the Treasurer's decision to cut super co-contributions for low income earners.

Mr Bowen says the result shows where the Coalitions true priorities lie.

"We see the Liberal Party's hypocrisy and we see their values and their priorities: their twisted values and their wrong priorities," he said.

"They've shown their values and priorities by giving higher income earners a bigger tax break on super while scaling back the tax break for low and middle income earners.

"This Government fundamentally does not understand, does not get, that it's unfair for Australia's low and middle income earners to receive effectively zero tax concessions on super when Australia's high income earners get substantial tax concessions."

Government to dump tax measures

Mr Hockey yesterday said he had uncovered almost 100 tax measures, some dating back to the middle of the Howard era, that have never been implemented.

The Treasurer revealed eight measures listed in the budget papers as expected to bring in revenue will be amended or scrapped.

The expected effect of that will be $3 billion less in budgeted revenue coming into the Treasury.

Mr Bowen says that rather than addressing the budget situation, the Government's now damaging it further.

"On hypocrisy, Tony Abbott and Joe Hockey campaigned on the platform of reducing the budget deficit. Since the election, all they've done is blow the budget deficit," he said.

But Mr Hockey says he is focused on identifying problems with revenue.

"We know that every cupboard I'm opening has spiders in it as a result of Labor. And I'm dealing with it," he told the ABC's 7.30 program.

"The first thing you have to do is identify the problem... but every cupboard we are opening, we are discovering more inherited problems.

"Now, the fact is, it's one thing to identify them - which we are doing. And we will show the Australian people the full details what we have inherited when we release our mid-year economic statement.

"But the budget is going to fix it and that's what we're focused on."

Topics: superannuation, federal-government, alp, tax, government-and-politics, australia

First posted