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Today Show presenter Karl Stefanovic criticized Labor’s plan to legislate a retirement resolution, arguing it “doesn’t make any sense”.
The federal government announced a review of retirement savings, and Treasurer Jim Chalmers also hinted at lowering generous concessional tax rates for extraordinary contributions that cost the budget more than $50 billion a year.
A Treasury consultation paper released this week also suggested superfunds could invest “where there is alignment between the best financial interests of members and national economic priorities.”
Australian Financial Review economics editor John Kehoe suggested that Dr Chalmers was trying to “push” superfunds into investing in social causes such as housing and green energy.
‘Chalmers is saying, look, I’m not saying you have to take suboptimal returns, but if these returns add up financially, you have to go and do it.
“So it’s more of a gentle nudge rather than forcing funds to do it.”
An enthusiastic Stefanovic questioned the purpose of that.
‘Can I say this, Johnny? It’s our money,’ he said.
It’s our money in a super fund, and maybe he’s a fool. I just want the best return.
Karl Stefanovic (left) has criticized a government plan that could reduce Australia’s retirement returns, saying the move “doesn’t make any sense”.
Mr Kehoe responded by saying: “The only way these social investments are going to add up is perhaps if the government provides a subsidy or some other reduction in red tape,” he said.
“I can’t imagine many of the superfunds doing this unless the financial returns really add up.”
Stefanovic responded: “It doesn’t make any economic or fiscal sense from my point of view.”
This week, Dr Chalmers also suggested lowering the flat 15 per cent concessional tax rate for Australians who deposit up to $27,500 a year in the super.
The Australia Institute, a left-wing think tank, calculated that the annual cost of $52.6 billion was almost as much as the $55.3 billion spent on the old-age pension.
“At the moment, we are on track to spend more on super-fiscal concessions than old-age pension by around 2050,” said Dr Chalmers.
“I’m not convinced it’s a sustainable way to get to our destination: good retirement income for more Australians, now and in the future.”
Treasurer Jim Chalmers (pictured) has signaled a shakeup of Australia’s retirement system, including new laws to prevent Australians from taking early retirement.
Queensland Nationals Senator Matt Canavan, a former economist, said Labor’s plan could stifle super returns.
It’s our money. Just leave our money alone,” he told the Today Show on Wednesday.
“This is shaping up to be a huge broken promise if they go through with this. The Labor Party said before the last election that they would not touch our super or play with it.
‘People work hard for this money. At a time when they are struggling to pay their bills today, Labor seems intent on making things harder for people tomorrow.
‘This money is there to help you in retirement.’
Labor plans to tighten the rules on super early access, which would make it more difficult for those born after July 1, 1964, to touch it before their 60th birthday.
Former treasurer Josh Frydenberg has allowed Australians to withdraw up to $20,000 from their superfund funds during the Covid-19 pandemic.
Australians could choose to access their super through two installments of $10,000 during the first months of 2020.
Outside of the pandemic, super early departure is only allowed in very limited circumstances, including if someone is permanently disabled, dying, facing serious financial hardship, or has a serious physical or mental impairment that prevents them from working.
Queensland Nationals Senator Matt Canavan, a former economist, said Labor’s plan could stifle super returns.
The federal government has announced a retirement savings review with Labor also hinting at cutting generous concessional tax rates for windfall contributions that cost the budget more than $50 billion a year (pictured, the Prime Minister Anthony Albanese with his girlfriend Jodie Haydon)
Dr Chalmers called the early release a “debacle” that “forced” Australians to “choose between better income in retirement or paying their bills” after $36 billion was withdrawn.
The Labor shakeup could end Australians being able to invest up to $27,500 in their super each financial year at a low rate of 15 percent, if they earn up to $250,000.
Shadow treasurer Angus Taylor said any move to super would be a breach of an election promise when asked if the tax concessions were fair and sustainable.
“What we do know is that they made a very clear commitment to the Australian people before the election, that they were not going to make changes to the super,” he told ABC’s PM radio program on Tuesday.
The existing rules, which debuted in 2006, mean high-income earners with $180,000 are taxed much less than their marginal income tax rate of 45 percent.
It’s also a big savings for those in the low- and middle-income tax brackets, who pay a 32.5 percent tax between $45,000 and $120,000; and 37 percent between $120,000 and $180,000.