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Retirement income taxes remain on the agenda

Submissions on superannuation taxes are still being considered as part of the current tax white paper process, even though the federal government has emphatically said it will not impose any new such taxes in its first term, a Treasury official has said.

Speaking at the 2015 Financial Services Council Conference on the Gold Coast, Treasury panel session participant Roger Brake said: “Prime Minister [Tony Abbott] has been very clear I think in terms of tax rates on super but, as I mentioned, Treasurer [Joe Hockey] has specifically asked for submissions on retirement income issues.”

Brake said a recent communique might indicate how seriously Hockey was examining taxes affecting retirement incomes.

“About six or seven weeks ago the Treasurer put out a media release extending the period of time for submissions to do with retirement incomes to raise a number of issues there,” he said.

Brake added a significant number of tax white paper submissions showed strong support for retaining the imputation credit system.

Fellow panellist and Business Council of Australia chief economist Lisa Gropp said it made sense to keep the dividend imputation system.

“Only Australia and New Zealand have dividend imputation as such, but every other country has something in place or some form of credit for dividends in place,” Gropp said.

“So even if there was a change, I don’t think you’d be talking about going to nothing.”

EY financial services partner Antoinette Elias added that specific issues should be examined rather than the imputation system as a whole, as the system was effective in enabling investors to avoid double taxation.

“[The issue is] whether the concessions for certain taxpayers are too generous,” she said.

“So [for example], should the imputation credit be refundable for the pension-paying stage of super? Is that costing too much money?

“That’s where some of the other discussions are still to play out.”

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