The Minister for Superannuation Bill Shorten said on Tue 12.2.2013, that media reports in recent days suggesting Federal politicians in defined benefit superannuation schemes will be immune from reduced superannuation tax concessions announced at the last budget are entirely false.
He said the Government had consistently and clearly said that Federal politicians earning in excess of $300,000 will be impacted by this reduced concession. This was made clear when the change was announced in the 2012-13 Federal Budget on 8 May 2012 [that announcement said that, from 1 July 2012, individuals with income greater than $300,000 will have the tax concession on their concessional contributions reduced from 30% to 15% (excluding the Medicare levy). This would mean that the tax rate on concessional contributions would effectively double from 15% to 30% for very high income earners from 1 July 2012.]. This means that the Prime Minister, the Deputy Prime Minister and Treasurer, other senior ministers, the Opposition leader and any other Federal politicians earning over $300,000 will pay higher taxes on their superannuation. This is regardless of whether they are in a defined benefit scheme or an accumulation scheme.
Claims that higher income earners would have “a year off” from paying the increase were also incorrect, Mr Shorten said.
Mr Shorten said the Government would bring legislation before the Parliament during the current financial year with the change to apply from 1 July 2012, including for Federal politicians who were elected before changes to the pension scheme were enacted in 2004.
Source: Minister for Superannuation press release No 005, 12 February 2013
[FJM Note: these blandishments say nothing about how this broad ambition is going to be achieved for defined benefit funds, where there might be no contribution in the fund, to either tax, or to hand back to the MP to fund this extra tax. Perhaps the MP could be taxed on an actuarial calculation of the contribution, to be paid out of their cash salary alone, but this seems harsh.]
[LTN 28, 12/2/13]