The Federal Government has announced a five-year freeze on changes to superannuation effective immediately, with legislation to be introduced to Parliament if it is returned to government after the election.
Treasurer Chris Bowen said that the freeze is intended to help promote stability and confidence in the system following reforms to the tune of some $1.5 billion. Mr Bowen also said it would protect the rise to 12% super, increased concessional contribution caps and the tax cut for workers earning up to $37,000. The Government had also previously announced a 15% tax on earnings above $100,000 per year.
Aside from the freeze on changes to super the Government announced plans to set up an independent super council whose remit would be to work on proposals for change within the five-year period. The body would have no regulatory powers or functions, but it could seek to initiate its own enquiries.
While the moves has been welcomed by the industry for the most part, the Opposition has criticised the freeze saying that ruling out all change was "irresponsible" and that there should be room for positive change. Although the coalition has said it will make no unexpected adverse changes to super, Opposition Leader Tony Abbot has previously vowed to scrape the low income tax offset and delay the super rise to 12% to pay for other Coalition policies.
Want to keep up to date with tax news for small business? Follow batescosgraveCA on Linkedin, Google+ or Twitter
Last updated August 2013. This article is provided for information purposes only and should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.