The PM has left open the possibility the govt will raid wealthy people's superannuation tax concessions.
Andrew Main asks Clime Investment Management's John Abernethy how superannuation will go and what the Australian dollar will do in 2013.
Penny Wong has refused to comment on 'gossip' about the government's budget plans for superannuation.
High income earners could face cuts to their retirement nest eggs. Source: Supplied
HIGH income earners could have their retirement nest eggs slashed by $80,000 as a result of tax hikes being considered by the Gillard Government to buttress the budget bottom line.
Exclusive modelling by the National Centre for Social and Economic Modelling for News Limited reveals a 50 year old earning $180,000 today, and with a typical nest egg for that age and income of $250,000, could expect to watch it grow to $914,000 by aged 67 under current arrangements, assuming they made no additional contributions beyond the compulsory rate.
This would be reduced to $835,000 or $79,000 less - if Labor were to increase the tax rate on super contributions to 30 cents in the dollar, up from 15 cents currently, for people earning above $180,000.
The Gillard Government has already increased the tax rate on super contributions to 30 cents for people earning over $300,000.
There is speculation Labor will extend this measure in the May budget as a key budget savings measure.Prime Minister, Julia Gillard, yesterday failed to rule out a raid on the super of high income earners to boost the tax revenue base as the population ages.
Asked directly if the contributions and earnings of the superannuation funds of high-income earners would be used to pull the budget out of its debt hole, Ms Gillard yesterday would not give a clear answer.
"Any decisions we make will be about the long term interest of the superannuation system," Ms Gillard said yesterday.
"I can assure people superannuation is a Labor creature and we will always nurture it well."
Treasury Secretary Martin Parkinson last year urged the government to cut superannuation tax concessions in the May 14 budget in order to secure its revenue base as the population ages.
However, a key cabinet minister, Craig Emerson, yesterday indicated any tax grab would be directed at very high income earners.
The trade minister said Labor was "not interested in increasing taxation on the everyday working men and women of Australia."
However, "if there is any capacity for, at the very high end, in different areas . . . I'm not saying we could never even look at something like that".
A research fellow at NATSEM, Dr Marcia Keegan, said tax increases on the super of high income earners would be felt hardest by those nearing retirement who had planned to make additional voluntary contributions.
"For some households, an increase in the contributions tax may be the difference between full independence from the age pension at retirement and drawing a small part age pension.
"However, according to Dr Keegan, high income individuals would still have an incentive to salary sacrifice into super, as the 30 per cent tax rate would still be lower than their marginal tax rate of 45 per cent.
Furthermore: "The households affected by these increases are a small minority of high wealth households, and even with a higher contributions tax rate, most would still have enough for a comfortable retirement according to the Association of Superannuation Funds of Australia's standards."
Tony Abbott yesterday said the Coalition would absolutely not make any "adverse unexpected changes" to the superannuation system in his first term if elected as prime minister on September 14.
"I want to say to people that super is safe under the Coalition," he said.
But the Liberal party has previously confirmed it is their policy to reintroduce the 15 per cent tax on superannuation for 3.6 million Australians earning $37,000 and under.
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