Hockey shirt-fronted by his own report
8:03 PM (1 hour ago)
Yesterday, Treasurer Joe Hockey was shirtfronted by his own Tax Paper.
After spending the last 12 months arguing for ideological spending cuts like the GP co-payment, which would have saved only $1 billion over four years, Mr Hockey’s Tax Discussion Paper pointed to a poorly designed tax break that’s costing taxpayers a whopping $32 billion a year: Superannuation Tax Concessions.1
Not only are the potential savings on Super Tax Concessions powerful enough to sweep away the bulk of Mr Hockey’s austerity cuts, they were singled out in the Tax Paper as a fundamental fairness issue – paid out disproportionately to higher income earners, while those who need them most miss out.
Yesterday’s report has led to an improbable media storm on tax policy: everyone, from social service organisations and the Greens, to business groups and shock jock Alan Jones is calling for reform. But Mr Hockey has said he won’t move unless Australians stand up and demand it.2
So, ask yourself: would you rather powerful revenue-raising reform that makes our tax system fairer, or austerity cuts to essential services? We think it’s a no-brainer.
Politicians count on the complexity of tax policy to send us to sleep to avoid scrutiny. So here’s a quick breakdown of the top five things you need to know about Super Tax Concessions:
- Super Tax Concessions. Superannuation helps Australians retire with dignity and reduces reliance on the Age Pension. The Government gives out tax breaks for Super to boost contributions, savings and investments.
- Tax breaks for the wealthy. Super Tax Concessions are poorly targeted: the more you earn, the greater the tax break you receive. This means that half of all concessions go to the wealthiest 20%.3
- Low-income earners miss out. Lower-income Australians, who need support in their savings now to avoid reliance on the age pension later, get little to no concessions.
- This makes no sense. The way Super Tax Breaks are currently structured is not only unfair, it defeats their whole purpose. The people who actually need a boost in their retirement savings miss out.
- How much does this cost? Super Tax Concessions cost the Budget an enormous $32 billion per year – and this figure is rising. Over the next few years, they’re forecast to cost taxpayers more than the Age Pension itself.4
Reforming super tax concessions would help more Australians retire with dignity, see fewer Australians on the Age Pension and save the budget bottom line billions, now and into the future.
Last year’s unfair budget lies in tatters after a year of incredible campaigning from GetUp members, alongside community and industry groups. Mr Hockey has an opportunity to pull himself out of the fire by listening to the recommendations of the Murray Financial System Inquiry, the Henry Tax Review, the last three Treasury Secretaries – and now, his very own Tax White Paper.
Let’s drive the message home,
Evan, Mark, Nat, Lily and Georgina, for the GetUp team
PS – Shadow Treasurer Chris Bowen made it clear yesterday that the Labor Party are ready to tackle Super Tax Reform.5 Even superannuation groups have conceded, “There shouldn’t be tax concessions going to wealthy people“.6 With momentum building, this is the opportune moment to launch a public campaign for common sense superannuation reform. For a fairer tax system and a Brighter Budget: https://www.getup.org.au/super-tax-reform
 “Billions lost in tax concessions exposes hypocrisy over federal aid”, The Guardian, 3 February 2014.
 “To maintain status quo we have to change: Joe Hockey says we need tax reform”, ABC AM, 30 March 2015.
 “Time to close the largest hole in the tax system”, The Australian Financial Review, 26 May 2014.
 “It’s super tax concessions, not pensions that are killing the budget”, The Sydney Morning Herald, 21 April 2014.
 “Tax Reform: Super concessions for the wealthy in the firing line”, The Sydney Morning Herald, 31 March 2015.
 “Financial system inquiry: David Murray calls for scrutiny on housing, super tax breaks”, The Australian Financial Review, 7 December 2014.