AUSTRALIA - Nick Sherry, shadow minister for finance and superannuation, has denounced the government's Budget decision to scrap the super surcharge as an "exclusive tax cut" set to benefit less than 5% of the population.
Sherry criticised the lack of tax cuts for everyone, not just high-income earners.
“The government is correct when it says it ‘will provide a significant boost to the superannuation savings of Australians currently affected’,” Sherry said. “It will be an exclusive boost for less than 5% of the population.”
Sherry said the move represented a tax cut for those earning a surchargable tax income of more than AUS$99,700 a year, with the greatest benefit gained by those earning AUS$121,075 per year or higher.
He said the Budget had revealed the “tax slug” on Australians’ superannuation would reach record levels by 2008-09 with AUS$6.5bn collected during that period, up from AUS$1.6bn in 1995-96. The new revenue estimate is after the abolition of the super surcharge.
Labor also said it supported the idea of a fund for the future, but not the AUS$16bn Future Fund proposed by treasurer Peter Costello.
Instead, Labor proposes a Building Australia Fund, which would maintain existing assets of the government’s Future Fund and add to it through the proceeds of any asset sales.
Stephen Smith, shadow minister for industry, infrastructure and industrial relations, said the party would use income for the fund for “productive purposes” including investment in infrastructure.
“It is by boosting productivity growth over the long term that Australia will be best able to meet the demands of an ageing population,” he said.
“In contrast to the government, Labor will include fund earnings in the Budget bottom line in accordance with accounting standards. Labor believes the income stream of the fund should be used to enhance the productive capacity of our economy, not set aside solely to offset the cost of bureaucrats’ superannuation.”
He added: “Public sector superannuation is an issue that has already largely been solved. Analysis from the Productivity Commission and the government’s own Intergenerational Report and Long Term Cost Reports show the super liability and associated cash outlays are already declining as a share of GDP over the next forty years.”
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