Whatever minority government is formed after Saturday’s election and hung Parliament, tax and superannuation need to be a priority to give business certainty about the future.
A minority Government is formed when no individual party or coalition has an outright majority of seats to form a Government and lead the country (or state), where a major party needs to broker a deal with outlying MPs in order to gain the numbers to form Government.
Mr Tony Fittler managing partner of accountants and business and financial advisers HLB Mann Judd Sydney, says a minority Government needs to ensure Australians have enough money in retirement, with an overhaul of tax and superannuation a priority for any minority government formed, whether lead by Julia Gillard or Tony Abbott.
“There is a wave of Australians who will retire in the next decade who won’t have had the full benefit of the superannuation guarantee contributions, and who are restricted in how much they can top up their superannuation in pre-retirement years.
“Exacerbating the problem is the fact that the Australian Tax Office refuses to allow some leeway for those who have inadvertently breached the contribution caps, by applying a tax of up to 93 percent, which is inequitable.
“After the years of government tinkering with the superannuation system, the penalty tax and contributions cap are further negative impacts on how people look at the superannuation system, reducing their enthusiasm for retirement savings.
“The punitive tax for contributions over the cap is particularly harsh when it is not even the fund member’s fault, but an error by their employer in the treatment of a bonus or some other extra payment.” Mr Fittler said.