Superannuation tax concessions entrench income and gender inequality

The report shows superannuation tax concessions help high income earners avoid tax, exacerbate income and gender inequality and come at a huge cost in foregone revenue, and recommends ending or at least limiting superannuation tax concessions for the top 10% of earners and those whose high super balances do not meet the asset criteria for the part pension.

Key findings:

  • Super tax concessions cost $54.56 billion in foregone revenue during 2022-23, and disproportionately benefit the wealthy:
    • The top 20% of income earners receive more than 50% of superannuation tax concessions.
    • The share of Australian workers with a super fund above $1 million is just 2.5%, but those people made 20.1% of all personal super contributions in 2020-21.
  • Removing the tax concession for both super contributions and earnings from the top 10% of earners would save more than $12 billion every year.
  • Women retire with a super savings gap of nearly 25% compared with their male counterparts.
  • Australia still experiences above average rates of poverty in retirement (6th highest rate of retiree poverty in the OECD)
  • Superannuation tax concessions are forecast to overtake the cost of the age pension in 2045-46.

“While super tax concessions are designed to help all Australian workers saving for retirement, the distribution of these benefits is incredibly unequal,” said Dr Minh Ngoc Le, a postdoctoral research fellow at the Australia Institute.

“Treasury estimates show that, dollar for dollar, high income earners actually receive more government support than those on middle and low incomes because of our current superannuation system.

“Continuing to provide tax concessions for the wealthiest Australians will soon cost the taxpayer more than the age pension, a complete reversal of what superannuation is designed to do.

“It’s clear superannuation tax concessions are no longer fit for purpose, and forgone revenue from super concessions for Australia’s wealthiest individuals could instead be used to support retired Australians living in poverty.”

The post Superannuation tax concessions entrench income and gender inequality appeared first on The Australia Institute.

Source link

Author: ibm1

Sign up for new Events & Classifieds in your inbox.
Spread the news
Advertise & promotion space
Medusa Sculpture Candles
Medusa Sculpture Candles
These are affiliate links. Clicking these links will transfer you to Amazon website.

You can become an author at TheGREEKS!
For anyone with good writing skills and an interest in going public with their work, we call for submissions

The post should be original and ideally offer something positive to any reader.
Posts must be decent and not insulting to other people: race-color-religion-gender or against a specific individual