Leading experts in Australia's superannuation system are supporting the government's plan to trim tax breaks on super balances exceeding $3 million. Despite acknowledging imperfections, they consider it a step towards a more equitable and sustainable system. The proposed legislation aims to increase taxes on earnings for the wealthiest 0.5% of savers.
Mike Callaghan, author of the Retirement Income Review in 2020, emphasized the need to address concessions favoring high-income earners. He highlighted the importance of improving the system's equity and long-term sustainability. The review projected rising costs of superannuation concessions, driven by tax breaks on super earnings.
Jeremy Cooper, who led the Super System Review in 2010, acknowledged the controversial aspects of taxing unrealized gains. However, he argued that some opposition to the changes has been exaggerated. He also pointed out that operating businesses and owning farmland through superannuation often serve tax minimization purposes.
Bob Breunig from ANU's Tax and Transfer Policy Institute agreed that super concessions are heavily skewed towards the wealthy. While he prefers a simpler limit on super savings, he acknowledges the current proposal is a step in the right direction. Other economists also support the reform as better than the status quo, despite its flaws.