TLDR: Politicians here are reluctant to increase tax rates on the very richest, but Australia’s Labor Government has just crossed the rubicon of breaking its ‘no new taxes’ promise for the very richest to help reduce its post-covid debt.
Yesterday, Treasurer Jim Chalmers announced a doubling of the tax rate for contributions to Australia’s compulsory superannuation scheme to 30% for those 80,000 or 0.5% of savers with balances of over A$3 million. The surprise move is expected to bring in A$2 billion a year in extra revenues and reduce the size of the tax concessions for pension savers in Australia from an annual A$50 billion.
Total concessions on both pensions and concessionary rates on Australia’s capital gains tax for owner-occupiers cost A$100 billion a year, according to a fascinating annual report released yesterday by Australia’s Federal Treasury that works out the scale of the foregone taxes due to various concessions to savers, and in particular which demographics win and lose from those concessions.
In my view, Aotearoa could do with an annual stocktake of tax breaks by demographic here too, including the lack of a tax on gains in capital gains on land.
Elsewhere in the news overnight and this morning
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