Tony Abbott performed another politically expedient backflip yesterday when he said: “We have made a very clear decision that we aren’t ever going to increase the taxes on super, we aren’t ever going to increase the restrictions on super because super belongs to the people. It’s your money. It’s not a piggy bank to be raided by government whenever it’s short … ”
The comment came after it was discovered the government had actually considered winding back superannuation concessions in April.
Abbott appears a little confused, though. No one is suggesting the federal government confiscate superannuation, but rather, remove tax exemptions on earnings made within super accounts. If you have a million dollars in a term deposit, the interest earned is taxed. If that term deposit is held in super, there’s no tax on the interest. As such, when the Howard government exempted a higher level of super contributions from tax, it was essentially transferring wealth from young to old and, more specifically, from poor to rich.
No one is suggesting that the government confiscate superannuation, but taxing the wealthy at at least the same rate as the middle class isn’t really that bad an idea. But then again, no one would ever accuse the Abbott government of being economically responsible.
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