Letter to the Editor: Superannuation changes

DEAR News Of The Area,

I WISH to comment on Pat Conaghan MP’s statement in NOTA on June 27, about the Labor Government’s economic performance and particularly his statements about the proposed tax on superannuation earnings on balances over $3million.

I question Mr Conaghan’s claim that this tax will badly affect farmers and small businesses in our area.

The plan is to increase the tax rate on super annual earnings for balances exceeding $3 million from 15 percent to 30 percent.

The tax would apply only to the amount above $3 million and it will affect just the top 0.5 percent of people with super – only about 80,000 people.

It would save the government more than $2 billion a year.

Mr Conaghan, how many farmers and small businesses in the electorate of Cowper fall under this category of wealth?

Even so it will hardly affect their financial situation, compared to so many who are struggling with the cost of living.

There is criticism about the government’s intention not to index the $3 million threshold.

If it was left unchanged forever, inflation would eventually cause the higher tax to apply to all the young.

However, there will be plenty of time to raise the threshold before then.

The extra tax would apply not just to interest and dividend income, but also unrealised capital gains.

This is not as iniquitous as Mr Conaghan claims.

Homeowners pay council rates that increase over time with land prices and so-called ‘capital improved value, and land tax is a tax based on capital appreciation, i.e. an unrealised gain.

Mr Conaghan’s economic priorities seem to favour wealthy Australians and I think he and his National Party colleagues should focus on economic measures that benefit everyone in the community.

Regards,
Les MITCHELL,
Port Macquarie.