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Greens propose plan for fairer superannuation, reform of $30b in tax breaks

Australian Greens Leader Bob Brown today released the Greens’ proposal to be put to the Superannuation Roundtable recently established by the Government after talks with the Greens.

“The Greens had detailed discussions with the Government about the revenue going to superannuation as part of the mining tax package, and the need to review superannuation tax concessions. We need to make the system fairer,” Senator Brown said in Canberra.

 “Fixing a system so skewed towards high-income earners could go a long way to lift overall levels of savings. Current rules do nothing to ease the growing gap between the rich and poor. 

“Tax breaks on superannuation cost the budget $30 billion a year, as Treasury’s latest Tax Expenditure Statement [released 31/1/2012] showed, with almost half of the concessions on contributions going to the top 12% of income earners. The tax breaks were projected to rise to more than $40 billion a year by 2014-15.”

The Greens' plan would see superannuation taxed at a person’s marginal tax rate minus 15 percentage points. Currently all contributions are taxed at a flat rate of 15%. A person whose marginal tax rate is 15% would pay no tax on super. High-income earners would pay more but still significantly less than their marginal tax rate, retaining the incentive to save for retirement.

“The Greens support raising the superannuation guarantee to 12% but tax reform is a crucial part of the debate, and should occur before the mining tax package is legislated,” Senator Brown said.

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