Darren Wickham on superannuation

Here is a piece by Mike Steketee on Superannuation.

He lists all the horrific inequities noted by Darren Wickham, arising from our present superannuation arrangements. For example:

  • contributions to super are taxed at a flat 15 per cent; this provides no tax break at all for low income earners e.g. on the estimated tax breaks of 24 billion dollars, some 17 billion went to the top 25% of highest income earners;
  • if the aim of policy is to save on future government pension payments, it is totally misdirected;
  • the co-contribution scheme (under which the Government puts in 1.50 for every dollar allocated to super) leaves out most low income earners who simply cant take advantage of the scheme; instead the scheme is more likely to be used by second-income earners in high income households.

Darren Wickham then proposes a number of tax responses.

By adding further to existing superannuations (raising the guarantee further under existing conditions), isn’t the Government compounding the inequities?

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jesky
jesky
12 years ago

At last, someone has blown the lid on this huge inequity. Superannuation has been a sacred cow for so long, spun as something that helps everyone look after themselves. This form of upper class welfare needs to be reformed.

My how we wasted those lotus years ….

derrida derider
derrida derider
12 years ago

Err, jerky, some of have been pointing out for many years that super is an incredibly regressive set of policies. The combination of compulsory super, a means tested age pension and flat rate super tax is especially invidious.

I’ve personally been accused by a very senior Treasury officer of “telling everyone its a plot against the workers”. As indeed it is.

The problem is that the money from compulsory super has created a massively well funded lobby for its perpetuation, and money talks.

Michael Kalecki
Michael Kalecki
12 years ago

Hawke originally proposed to merely tax the benefits at the marginal rate of tax.

Bill Kelty threatened to rip up the Accord as he saw it as a right for a worker to get all the meagre Super ans then later for them to go on the pension.

Howard could have been the Champion. IF he had fulfilled his promise on SGC going to 15% and then had only a tax on benefits at one’s MTR we would all be better off.

As it is we now have a system that is not only inequitable but unsustainable.

We do not tax contributions but tax earnings and benefits.

What happens as the population ages???