Late last month, federal opposition leader Bill Shorten outlined Labor’s tax policy for superannuation if the party is elected to government.
The plan includes taxing earnings in retirement at 15 per cent for those earning over $75,000 and reducing the threshold of the high-income super charge to $250,000 from $300,000.
Speaking at the National Press Club yesterday, Mr Bowen reiterated the Labor party’s belief that the current tax concessions for superannuation earnings in retirement are unsustainable.
“Tax-free superannuation assets in retirement phase now account for about 30 per cent of total super assets. This will grow to 44 per cent in the next 30 years. That’s exactly why the earnings concession on superannuation is the fastest growing tax concession in the entire federal Budget,” Mr Bowen said.
“The Budget papers show the total cost of superannuation tax concessions, earnings and contributions actually outstripping the cost of the aged pension by the end of the forward estimates period. That is in just four years.
“This is a challenge for budget sustainability and it must be met right now. Tony Abbott and Joe Hockey expect us to believe that this is affordable, as they say it with a straight face. They promise to never ever change it. If they really believe that, they are nothing short of fiscal vandals.”
In a separate announcement, Mr Bowen noted the growth in superannuation tax concessions is three times that of the growth in the age pension.
“This data all highlights a challenge of Budget sustainability and fairness that must be met right now,” Mr Bowen said.
“A long list of economists and stakeholders have been pushing for the sustainability and fairness of our superannuation tax concessions to be reviewed and addressed by the Abbott government, including COTA, ACOSS, the Grattan Institute, the government’s own Commission of Audit and Financial Systems Review, as well as the Treasury Secretary.”