UnitingCare Australiaâ€™s National Director Lin Hatfield Dodds has welcomed the announcement yesterday of a high level group to advise the Federal Government on equity issues in Australiaâ€™s superannuation system.
Ms Hatfield Dodds said the deep inequities in our superannuation system were outlined in a UnitingCare Australia discussion paper â€“ What Price Dignity â€“ released ahead of the Government’s Tax Forum in Canberra in October last year.
â€œThat discussion paper alerted Australians to the fact that the tax system provides more support and concessions to high income households than to Australians living below the poverty line,â€ Ms Hatfield Dodds said.
â€œSuperannuation tax concessions benefit people on higher incomes, encouraging them to save for their retirements.
â€œThe wealthiest Australians, the top five per cent of income earners, are the beneficiaries of almost $10 billion worth of those concessions.
â€œButÂ people on very low incomes receive no incentives to help them to save for their retirement.
â€œIts inequities and disincentives like this in the tax system that lock many Australians into a cycle of intergenerational poverty.
â€œIncome drawn from these savings is tax exempt and the same people are provided with access to the concessions designed to help low income earners meet basic costs such as utilities, transport and health care.
â€œWealthy Australians receive generous health concessions and an annual, tax free payment of $800 a year to help them with the cost of water and electricity. This payment is being made to people with millions of dollars in accrued superannuation who live on tax free incomes of over $100,000 a year.
â€œMeanwhile many older Australians, including those whose caring responsibilities have excluded them from accumulating savings, struggle to meet their most basic costs in retirement.
â€œAustralians should be encouraged to save for their retirement. But assistance must be targeted to low income earners to pursue the same goal. Existing concessions should be targeted to the people who need them most.
â€œAdequacy, equity and simplicity must be the guiding principles of tax reform.Â Superannuation is one area of reform in urgent need of review. We welcome yesterdayâ€™s announcement and look forward to being part of the discussion on this important issue,â€ Ms Hatfield Dodds said.
The UnitingCare network provides social services to over 2 million people each year in 1,300 sites in remote, rural and metropolitan Australia. UnitingCare has 35,000 staff and 24,000 volunteers.