Aussies who make extra contributions to their superannuation to avoid paying higher taxes might soon see that loophole close.
Australians who make extra contributions to their superannuation from their pay only get taxed 15 per cent on that money instead of a much higher amount.
The system was put in place to help Aussies save more for retirement, something that was much needed when millions found themselves with little to no super before mandatory contributions were put in place.
But Federal Minister for Financial Services Stephen Jones said some Aussies were rorting the system and not paying their fair share.
Speaking at the AFR Wealth and Super Summit, Jones said the Government was discussing the taxation of superannuation after it was discovered 32 self-managed super funds (SMSFs) held more than $100 million in assets.
“The largest self-managed super fund has over $400 million in assets,” Jones said.
“I celebrate success, but the concessional taxation of funds like these has a real cost to the Budget, which needs to be considered.”
Jones said the tax concessions on a single $10 million SMSF could support 3.1 Aussies on the pension.
Jones said while the Government was considering the tax implications, they also wanted to have an open discussion with everyone involved to hear all perspectives on the issue.
“Those who support the status quo will need to demonstrate how concessional tax arrangements for high-balance super funds meet the common objective,” he said.
“Those who argue for change will need to show how that approach meets the objective.
And the millions of fund members watching and participating in the debate will know it is framed around their interests and their dignity in retirement.
“By having this national conversation, governments now, and into the future, will be held accountable for the stewardship of our system for the next 30 years and beyond.”