Tax options reviewed to boost super contributions
A sizeable weakening in the levels of post-tax voluntary superannuation contributions has prompted a review of the Henry tax system.
Options that are up for discussion include: future salary increases paid directly in the form of super contributions, tax breaks for salary sacrificing on low income earners and at different life stages, and lastly incentives for recipients maintaining contributions during maternity leave.
These options have been discussed with a sole purpose of helping to boost superannuation coverage.
Research conducted by BT Financial saw average annual voluntary contribution drop to $3,400 last year, a significant drop from $12,000 in 2007.
A huge spike in voluntary contributions in 2007, attributed to the Howard government's taxation on retirement savings, always meant that 2008 was going to yield dismal results.
The Association of Superannuation Funds of Australia has pushed a submission arguing that the compulsory 9 per cent super contribution is inadequate for a large number of retirees and should be raised to 15 per cent by 2015.
Source: The Australian Financial Review