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Govt ‘open’ to super concessions cut

Treasurer Scott Morrison has confirmed the government is looking at a significant change to the way superannuation contributions are taxed.

Deloitte Access Economics director Chris Richardson called two weeks ago for a different approach that would reduce the contributions tax by 15 percentage points from a worker’s income tax rate.

“The government is open to all of these ideas,” Mr Morrison told Sky News on Tuesday.

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Under the Deloitte plan, a worker on the top marginal tax rate would pay 30 per cent tax on contributions while a worker on a middle income would pay 17.5 per cent – a 15 percentage point reduction on the 32.5 per cent tax rate on incomes between $37,000 and $80,000.

Mr Morrison confirmed the change would generate $6 billion in new revenue per year.

Superannuation tax concession have grown substantially in recent years and are expected to surpass the total value paid out in pensions in each year’s budget.

Research by the Grattan Institute has shown that half of super tax concessions paid each year go to the wealthiest 20 per cent of Australians.

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