Shadow treasurer Chris Bowen’s suggestion that superannuation tax incentives will exceed the cost of the age pension by 2018/2019 are based on false estimates, says the SMSF Owners' Alliance.
Reflecting on comments made by Mr Bowen in Budget response speeches last week, SMSFOA executive director Duncan Fairweather said the cost projections are “not so”, along with the claim that the cost of these incentives will “rise to $50 billion”.
The SMSF trustee advocate said Labor has arrived at its figures by adding together two numbers that Treasury says should not be added together”.
Mr Fairweather said based on a media release distributed by the shadow minister, he has added together $20 billion in estimated on superannuation contributions and $30 billion in estimated concessions on superannuation fund earnings.
“These numbers are from Treasury’s 2014 Taxation Expenditure Statement (TES) included in the Budget papers,” he said.
According to Mr Fairweather, however, it cannot be claimed by adding these two components that the total cost to the Budget will be $50 billion and this is potentially the saving that could be made if superannuation tax concessions are removed.
“They can’t be added because they measure different things. If the tax concessions on contributions are removed or reduced so less money flows into superannuation, then the earnings of superannuation funds will also be lower,” he said.
The Treasury warned in the Tax Estimates Statement that these components should not be added, according to Mr Fairweather.
“The shadow treasurer has not heeded this warning and so had double counted in arriving at this $50 billion number,” he said.
FASEA has come under scrutiny from a parliamentary committee for its treatment o...
ASIC must overhaul the way it engages with advisers to focus on proactive educat...
ASIC needs to work harder and more efficiently if it wants to reduce fees and im...