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Treasurer Joe Hockey has foreshadowed long-term changes to superannuation tax concessions in a speech delivered just weeks before his first Federal Budget.
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Hockey flags changes to super tax
24 April 2014
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Discussing the costs of Australia’s ageing population, the Treasurer said that those entering their post-work years don’t have the resources to support themselves, and that “increasingly the burden of our ageing is being borne by other people”.
According to Mr Hockey, four out of five Australians over 65 receive a full or part pension and if the concessionary health card is also taken into account, then just 14 per cent of older Australians receive no government payments.
“At least for the Age Pension, this situation is unlikely to be much different in 2050,” he said.
“Despite spending billions of dollars in taxation benefits for superannuation, by 2050 the ratio of Australians receiving a full or part pension will still be around four out of five,” said Mr Hockey.
The Age Pension is now the Governments single biggest spending program while aged care is the eighth largest category of spending, costing more than higher education or child care, and the Pharmaceutical Benefits Scheme (PBS) is the tenth largest category of spending.
According to Mr Hockey, nearly 80 per cent of the PBS’s expenditure is attributable to concessional recipients.
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The real issue is that the volume of demand for these programmes is outstripping the capacity of taxpayers to fund them.
“Between 2010 and 2050 the percentage of people of working age supporting those over the age of 65 in Australia will almost halve,” said Mr Hockey.
“So the policies must be changed, either now or more dramatically in the future,” he said.
The Abbott Government has promised no changes to super in its first term and Mr Hockey has stressed that any changes will take affect after the next election.
“We are keeping our promises, I want to emphasise that”.
“We are not laying down a budget for one year, we are laying down a budget that is going to improve our destiny for 10 years,” he said
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