THE HON JOSH FRYDENBERG MP
25 September 2018
INDEPENDENT RESEARCH CONFIRMS LABOR’S RETIREE TAX WILL HIT RETIREMENT SAVINGS
Retirees who do the right thing and save through their superannuation could lose the equivalent of up to 9 per cent of their superannuation according to a new report released by academics from the Australian National University today.
Critically, the independent study highlights how Labor’s policy will encourage investors to shift their investments offshore and away from Australian businesses.
It finds, a retiree would reduce their Australian equity holdings by around half and more than double their investments in foreign equities, shrinking the pool of capital to invest in growth in Australian businesses.
The study also finds:
- the total expected net cost per retiree over the course of their retirement from Labor’s policy would be around $80,000 for those retiring with a $500,000 balance (in 2017-18 dollars) and around $30,000 for those with a balance of $100,000; and
- the returns Australian retirees receive on their Australian equity investments would be reduced.
The Government’s analysis shows around 900,000 Australians will be affected by Labor’s retiree tax, with around 45 per cent of those Australians 65 years or older, and 84 per cent of Australians affected are on taxable incomes below $37,000.
This is yet another example of Labor’s poorly designed policy. It follows their rushed changes a fortnight after their announcement of a policy that will rip over $45 billion out of retirement savings.
Labor’s retiree tax is part of its plan of more than $200 billion in additional taxes to people’s properties, income, business and savings.