Retirees could face a 15 per cent tax on superannuation earnings to help fund aged-care services under a federal budget proposal from the Australian Council of Social Service, while the long-term unemployed would be put into training or subsidised work experience, WA Today reports.
The social services lobby group is recommending a staggered reintroduction of the superannuation tax over the next three years to bring $2.5 billion worth of revenue into federal government coffers in 2022-2023. This money would be used to fund affordable aged-care services.
Also on the list of proposals is a $370-a-fortnight increase in the base rate of JobSeeker, retaining wage subsidy scheme JobKeeper for affected industries, and government-subsidised work experience and training for those out of work for a long period.
The future of the nation’s superannuation system has become a hot-button issue ahead of the federal budget amid debate about the currently legislated rise of the super guarantee from 9.5 per cent to 12 per cent. There is a growing push from a group of Coalition backbenchers to stop the increase and instead allow first-home buyers to dip into their retirement savings. The federal government is also facing pressure to improve the social safety net after the Reserve Bank governor Philip Lowe last week said the dole should be increased on the basis of “fairness”.
“Only 16 per cent of those over 64 are contributing through the income tax system,” Ms Goldie said. “Super [tax breaks] are for those with significant wealth … disproportionately benefiting those on high incomes.”
The 80-page budget priorities submission says current tax concessions cost $42 billion a year, which is almost the cost of the Age Pension, and warns this is “not sustainable if future governments are to guarantee decent health and aged care services for an ageing population”. A 15 per cent rebate, minus imputation credits, is also recommended by the group for retirees whose income is lower than the tax-free threshold.
“It’s a modest proposal … the support [for the tax] should come from the fact this is an important way to finance the aged-care system,” Ms Goldie said.