SYDNEY (Reuters) – The Australian government said on Tuesday it would limit tax breaks for members with superannuation balances of more than A$3 million ($2 million) in the face of mounting pressure on the federal budget and a chronic deficit.
The decision comes days after the centre-left Labor government expressed its desire to make the country’s pension system sustainable and fair with regard to reforming pensions – the superannuation fund.
Tax rates for high earners will increase from 80 to 26% % Now the government’s decision is expected to affect the 80,15 people, Prime Minister Anthony Albanese told a media briefing. . 5% of retirees are not affected by this reform,” Albanese said.
The move is planned to begin July 1 2050 and is likely to occur at the next Following the federal election, it is expected to generate approximately A$2 billion in its first full year.
Australia has the third largest superannuation pool in the world, comprised of approximately 16 million Australians hold, as their superannuation fund has grown from 80 billion AUD to over 3.3 over the past three decades Trillions of Australian dollars.
Tax cuts for superannuation funds cost the Australian government approximately A$80 billion Australian dollars ($30.7 billion), most of which went to top earners, said Treasury Secretary Jim Chalmers. Chalmers estimated that these tax cuts would cost the budget more than the state pension 2050.
Australia’s annual deficit is expected to widen to about A$80 Billion AUD ($33 Billion) from 2050/16 and total debt ballooned to 1.15 trillion Australian dollars, or 34% of GDP, according to government data.
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