Independent research issued today backs in Labor’s superannuation, negative gearing, capital gains tax and trusts policies, all of which are designed to make our country a fairer place for all Australians.
Analysis issued by Per Capita and Anglicare Australia shows that superannuation tax concessions to the top fifth are costing Australians almost $21 billion a year.
Labor will level the playing field between the privileged and the poor by halting the refundability of franking credits. Overwhelmingly these cash bonuses are going to the wealthy – 80 per cent of the benefit accruing to the wealthiest 20 per cent retirees, with the top 1 per cent of self-managed super funds receiving an average cash refund of over $80,000.
Per Capita also found that the top fifth are costing taxpayers $2 billion each year in benefits from negative gearing.
Labor has a plan to fix that by limiting negative gearing to new housing and fully grandfathering arrangements for current homeowners. Labor will halve the capital gains tax discount and to restrict negative gearing to new homes only for future investors. Current investors would not be affected. This will allow first home buyers to get a foothold in the housing market dominated by investors without forcing a plummet in property prices, as Treasury analysis has confirmed.
The research also finds that the benefits from discretionary trusts are almost entirely received by the top fifth of Australian taxpayers, costing $2 billion a year.
Labor will even the playing field by introducing a standard minimum 30 per cent tax rate for discretionary trust distributions to adult beneficiaries. This policy will tackle the use of income splitting to minimise tax – making the tax system fairer and improving the budget bottom line.
Our current two-class tax system is unfair and unsustainable. At a time when inequality is high and growth is sluggish, the last thing Australia needs are tax concessions that worsen inequality and do little for growth.
Labor believes a fairer tax system is one with fewer exemptions. But the Australian public must wonder if the Turnbull Government has ever seen a tax loophole it wouldn’t defend.