Scott Morrison indicates government’s plan to consider superannuation tax concessions

Treasurer Scott Morrison said in a speech at the Association of Superannuation Funds of Australia on Friday that the federal government is thinking on allowing superannuation tax concessions and use the money to fund the tax reforms. This is so far the strongest hint from the treasurer on the federal government’s intention to target the generous concessions to support the enforcement of the tax cuts.

Morrison said that a conversation is needed to discuss the sustainability of the superannuation system.

"Could the costs of providing superannuation tax concessions, for example, be directed elsewhere in the economy to make it work more efficiently, such as personal income tax cuts?" Morrison said in the conference. "Could they, for instance, be directed to that purpose or to encourage participation in the workforce or to encourage productivity and growth more generally in the economy?"

He pointed out that though superannuation system ensures that Australians have enough money after the retirement, it should not be considered an "open-ended savings vehicle for wealthy Australians" used for storing away large prodigious balances.

Morrison said that superannuation needs to be considered in respect to a broader economy. It is necessary to determine whether or not the cost of providing superannuation tax concessions can be directed to another part of the economy to ensure more efficiency.

“It is not an estate planning vehicle nor was it ever intended to be,” he said. “When Australians see the government supporting the accumulation of enormous superannuation fund balances, the confidence in the system is significantly undermined.”

Morrison added that bringing about changes in the superannuation system would ensure integrity but would not affect those approaching or in retirement. He said that the government acknowledges and respects the effort and sacrifice of the Australians who are saving their life’s income to secure the future.

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