Jim Chalmers’s proposal to cut top end superannuation benefits deserves support

photo by Lukas Coch/AAP: Australia's treasurer Jim Chalmers released has released the tax expenditures and income statement

Contributed by Joe Montero

Treasurer Jim Chalmers has released the tax expenditures and income statement. This is about tax concessions, credits, and deductions. Together, they amount to more than $150 billion a year. One third of this is superannuation discounts.

Given the reality of a tax revenue shortage, it makes sense to consider which of these giveaways is not justified. Clawing back some of the money could provide for the improvement if needed government services. The statement reveals that more than 55 percent of the benefit flows to the top 20 percent of incomes, with 36 percent to the top 10 percent.

Here is some of the detail. A third (35 percent) of rental deductions, including deductions for rental loss, interest costs, property maintenance, and council rates went to the richest. It is a similar story for the National Disability Insurance Scheme (NDIS). Another group of benefits mainly going to the same cohort include $150 billion a windfall from negative gearing, capital gains discounts, franking credits, and more.

Any move that helps to redraw the balance towards treating all Australians as equals should be supported.

It is clear that Australia has a welfare scheme for the rich, aiding the shift of income upward and away from those who need help the most. Australia can’t afford to continue doing this, and it is unjust.

This is the reason why Chalmers announced the intention to cut the benefit to those with balances above $3 million in their superannuation accounts

The coalition and its backers are set against the cut and campaigning to have it stopped. In a cynical move to protect privilege.ge, they are accusing Labor of dishonouring its pledge not to touch tax breaks in the taxation system. This deserves to be called out for what it is.

The cut is not yet a done deal. For now, it is out for debate. The downside is that that action is to be delayed until after the next election. It’s a strategy that will give those fighting to maintain the privileges time and opportunity to organise and deploy a scare campaign, pretending everyone is going to be targeted, and therefore a mistake.

There is also that very l little detail about intention has been given, and the benefit will be countered in any case, if the 30 percent income tax cut for the wealthiest goes ahead. If it is right to chop into the superannuation benefits for the rich, the same argument same argument stands for the rest of it.

After all, these gains came by taking away from the rest of us, and achieving equality is important.

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