Canberra: Labor’s bungled and damaging retiree tax just gets worse, with new data showing the proposal would rip $3.75 billion out of 2.6 million APRA-regulated superannuation member accounts, including those held by pensioners despite Labor’s so-called ‘pensioner guarantee’.
Labor’s proposal does not exempt pensioners whose APRA-regulated super funds are affected. These pensioners will be hit even if they were on the pension before 28 March 2018.
Australian Taxation Office data shows that most APRA-regulated funds (2,013 of 2,603 funds) received franking credit refunds in 2015-16 worth over $300 million.
This means that Labor’s policy would deny around 2.6 million member accounts around $300 million in retirement savings each and every year.
Further, these lost savings can’t then generate returns year on year meaning the cost to retirees is even higher. For example, APRA data shows superannuation funds have generated an average return of 3.5 per cent over the last 10 years. If the rate of return is the same over the ten years Labor has costed its policy then the cost in retirement savings is $3.75 billion over this ten year period.
When it comes to Labor and tax, Australians can be assured that the real impacts are always worse than they are willing to admit and that under Labor Australians will always pay more.
Labor’s proposal is an old fashioned Labor tax sledgehammer targeted at pensioners and retirees to grab as much tax as possible because they can’t live within their means and control their spending. It’s a tax on low and middle income Australians and their future retirement nest eggs.