The prime minister says there will be no major changes to superannuation despite a fight brewing over possible changes to tax concessions to help ease budget pressure.
The debate was sparked this week after the treasurer said superannuation concessions were on track to cost the budget as much as the aged pension by 2050 and questioned the sustainability of the tax breaks.
Jim Chalmers has since hinted at a cap on large super balances as a possible way to make super concessions more “affordable and sustainable”.
Several super funds have backed a $5 million limit on account balances, while the Grattan Institute and other groups have called for a lower cap on balances open to super tax concessions.
He said less than one per cent of people have more than $3 million in super and average balances for people in that upper category was about $5.8 million.
But Prime Minister Anthony Albanese said the priority was defining the objective of superannuation, which the treasurer also outlined earlier in the week, and that there would be “no major changes to superannuation”.
“That is the objective to make sure that people can have a quality of life in their later years,” he said.
Opposition Leader Peter Dutton said the coalition would block any moves by Labor to change the arrangements around superannuation.
He said the changes would likely be in the May budget and accused the government of bringing the Aston by-election forward to get it “over and done with” before the public was across the detail.
“If the government had a plan, they should have detailed it before the last election instead of springing on people now,” he told Sydney radio 2GB on Thursday.
He said the government would likely start by targeting people with large super balances and then work their way down.
“They’ll just keep coming back to the well, and all of a sudden you’re a couple of rungs down and people who didn’t think they were in line, they’ll be having to pay additional tax,” he said.
Speaking at an SMSF Association conference, a body representing Australia’s self-managed super fund sector, Assistant Treasurer Stephen Jones said he was not singling out the self-managed sector for attack.
“But it is timely to have a conversation about what a dignified retirement means in the context of a sustainable retirement system,” he said.
He said the savings needed to fund a dignified retirement were evolving and would continue to change.
“But it seems to me that many people will be able to have a very dignified retirement well into the future with a balance that is significantly lower than $100 million,” he said.
“And there will be a time and a place to consider how we might sensibly transition so that it minimises unnecessary disruption.”
More than 600,000 super funds are self-managed, amounting to about $870 billion in retirement savings.
© AAP 2023
