If, like me, you assumed Federal Treasurer Scott Morrison was going to go easy on well-established superannuation savers in the Budget, you likely share my slightly queasy feeling. It turns out we’re more alone that we first thought and that a changing landscape may call for a change in strategy. Certainly, the proposed measures to help low income earners are welcome because they removed the distortion under which lower paid Australians were paying more tax on their super contributions than they were on their income. The Low Income Tax Offset will help around 3.5 million people, given that the Low Income Super Contribution (LISC) that it replaces was due to expire mid next year. But the measure to bring down the cap on tax free concessional contributions for the over 50s from $35,000 a year to $25,000 a year looks like particularly bad policy. That’s because any move to crimp savers’ desire to be self-sufficient in retirement is likely to backfire down the track by leaving them with less savings than they originally planned to sock away, read more: (VIEW LINK)
Please sign in to comment on this wire.