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The federal government has ditched a raft of Labor’s taxation changes, including taxes on individual superannuation pension earnings above $100,000 and a $2000 cap on self-education.

Treasurer Joe Hockey and his assistant, Arthur Sinodinos, this morning announced the changes as a “step forward in clearing the desks”.

Hockey said the decision to remove Labor’s tax on superannuation pension earnings above $100,000 was made because the initiative was “undeliverable”.

“The fact is that it was nigh impossible for the private sector to properly identify who was responsible for that liability and how that was assessed,” he said.

“Super is crying out for stability and we are delivering that. People are saving for their retirement and we’re encouraging that.

“You cannot use superannuation as a milking cow on an ad hoc basis … this proposal which we are dumping today was not only massively complicated but it was basically undeliverable.”

Sinodinos said the advice the government received regarding the superannuation changes was that they were complex to administer.

Financial Services Council chief executive John Brogden said the government’s decision to cut the tax showed it was progressing in “returning certainty and stability to superannuation policy”.

“The former government’s $100,000 earnings tax on superannuation was rushed, complex and frankly unworkable,” Brogden said.

“Today’s announcement delivers on the government’s pre-election commitment of no negative changes to superannuation.

“It also clears the deck of a series of other unworkable and unnecessary tax measures. Australians must be able to grow their superannuation to provide an adequate retirement and the government has supported this.

“The anticipated revenue from the tax would not have been realised due to the flexibility in managing earnings in the SMSF [self-managed superannuation fund] sector.”

Source: Kate Kachor, Financial Observer http://www.financialobserver.com.au/articles/govt-takes-axe-to-labor-s-tax-plans

The AFR also reported that “A $1.8 billion fringe benefits tax on the car industry announced in April will go too.”

Source: http://www.afr.com/p/national/politics/hockey_to_tackle_tax_law_backlog_N7iNTiU6fnNesqB49G0qQK

This editorial provides general information only. Before making any financial or investment decisions, we recommend you consult a financial planner to take into account your particularly investment objectives, financial situation and individual needs. Charter Financial Planning and its authorised representatives do not accept any liability for any errors or omissions of information supplied in this editorial. Charter Financial Planning Limited ABN 35 002 976 294 AFSL Licence No. 234665. Principal Address 750 Collins Street GPO Box 2830AA Melbourne VIC 3000.

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