Gillard government appears to be striking a reasonable balance, ex-PM Paul Keating

Former Prime Minister Paul Keating says the Gillard government has diminished the extremely generous tax modifications of superannuation fund iterated by former treasurer Peter Costello. Keating said the taxation of superannuation fund income over $100,000 at 15 per cent lead the way to reinstating the initial intent of the system.

“It corrects by some measure the unsustainably generous Costello tax changes which dismantled the former reasonable benefit limits structure in favor of an open ended tax-free regime,” Keating said.

Keating maintains that superannuation system would work like a retirement income system to boost the age pension.

“It was never designed to make possible the shelter of income for those able to contribute increasing levels of precautionary savings and their associated compound earnings. The sustainability of the retirement income system demands that that balance be maintained. The government, by these changes, appears to be striking a reasonable balance,” he added.

Earlier, the Financial Services Council alleged that it was not taken on board regarding the taxation of superannuation earnings. The council also said that the elements of the package announced today were extremely inconsistent with the government’s remarks in recent months.

“It’s in the interests of all Australians that this new set of proposals have some certainty around them before the election. We think the decision to tax people at all in the retirement phase is inconsistent with what the government has said in recent months,” FSC chief executive John Brogden said.

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