Proposed superannuation tax causes concern

LABOR’S SUPER-TAX UNCERTAINTY

Speculation surrounding the Government’s proposed superannuation tax has left members of the public confused about the future of their retirement funds.

The tax is thought to be tied to last year’s 15% super-tax raise, and has been placed on accounts of those earning over $300,000 per annum.

Labor’s strategy to target the lesser-taxed funds of the ‘fabulously rich’ has yet to be revealed in detail, raising concerns that the effects will also be felt by the average Australian.

“It’s speculation at the moment, what they tax isn’t defined. The term ‘fabulously rich’ isn’t defined,” says Mark Christopherson of PSK Financial Planning.

While tax-payers remain concerned about the future of their funds, the instability of the economy has led to a drop in investments, and in turn, a lack of growth in superannuation funds.

Deputy Prime Minister Wayne Swan spoke to reporters in Canberra today, in defence of Labor’s unannounced plan.

“We want to see more Australians having access to a decent retirement, with a decent level of support from their superannuation.”

“Everybody understands that the system must be sustainable for the long-term; that tax concessions for those at the very top are excessively generous and to make it sustainable over time, those concessions need to be sustainable over time.”

Despite the reassurances of the Labor Party, uncertainty will continue until a formalised plan is revealed to cut down the budget deficit.

“This threat of altering the taxation of superannuation just undermines peoples’ thought process in relation to the security of super,” said Mr Christopherson.

“At the end of the day, people want to get a good return on their super fund.”

WAITING ON THE GOVERNMENT TO DELIVER PROMISES

While debate has arisen over the Government’s superannuation tax proposal, people in the education and disability service sectors are still waiting for their big budget promises to be delivered.

The release of the National Disability Insurance Scheme (NDIS) promises increased funding for disability services across the country.

Sean O’Neill, Information Services Manager of The Disability Trust based in Fairy Meadow, says current funding for disabled persons is not enough.

“A very slight proportion of the people who need help, get help. And increased funding would help increase the amount of people that are able to get support and assistance.”

“In 2009, half the people who needed assistance were self-care. When they contacted service providers for help… only 9.3% received formal support,” he said.

Mr O’Neill believes that the proposed scheme will create more services and allow him to do his job more effectively. However, he urges that more must be done to create a better-organised system.

“If I had just spoken to a doctor and just found that my son has autism, there is nowhere that I can go to find out services for people with autism,” he said.

There has also been a proposed increase in education funding, as a result of the Gonski reforms, with Julia Gillard expected to negotiate with the state government’s later this month.

New South Wales State High School principal, Patrick Nethery, a strong supporter of the reforms, feels the Government needs to take into account the many factors outlined by Gonski when assigning funding.

“State schools have to educate many students from right across the socio-economic and intellectual spectrum, including many students with high needs… the funding that goes to schools must reflect the nature of students in the schools and their needs, and it’s never done that to the extent needed.”

He believes the Gonski reforms are finally the change that public schools need as they adhere to this idea.

“What [Gonski] found was blatantly clear: that the funding model that we’ve been operating on, in terms of its equity amongst schools, is disgraceful.”

Mr Nethery said that until school staff get the support they need, the state system will remain under-resourced.

“Now is critical. Essentially, in education in this country, we’re five minutes to midnight. We’ve staggered on with an inadequate resourcing and funding system for so long… and if it continues, then the demise of state schools will be inevitable.”

WORDS:GERARD MCDONOUGH & TARIK ELMERHEBE
PICTURES:ANDREA HOGAN
VIDEO: ALEX PIKE

Image Credit: ABERCROMBIE ACCOUNTING GROUP

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