Minister for Revenue and Assistant Treasurer Peter Dutton today welcomed the passage of the Simplified Superannuation legislation through the Senate.
“These bills implement the greatest reforms to superannuation in Australia’s history. This is bedrock economic reform: sweeping away complex tax arrangements, improving incentives to work and save and increasing retirement incomes.”
“These reforms will empower Australians in saving for their retirement and help maintain Australia’s economic prosperity into the future.”
“It may have taken many, many months, but I am pleased that Labor has finally agreed to support this legislation,” Mr Dutton said.
Under the legislation, from 1 July 2007:
- Superannuation benefits paid from a taxed fund will be tax free for people aged 60 and over;
- Age based limits will be replaced with streamlined contribution rules and reasonable benefit limits (RBLs) will be abolished;
- The self‑employed will be able to claim a full deduction for personal contributions to superannuation.
- The highly successful Government co-contribution scheme will be extended to the self employed;
- To help improve incentives to save, the pension assets test taper rate will be halved to $1.50 per fortnight for every $1000 of assets above the assets test free area;
- Arrangements for lost and unclaimed superannuation will be enhanced;
- Individuals will have greater flexibility as to how and when to draw down on their superannuation in retirement.
As a result of these reforms, in the vast majority of cases, the 90 per cent of Australians in taxed schemes will have the tax treatment of their superannuation benefit covered in one paragraph of law if they access their superannuation after age 60.
“We now await a commitment from Kevin Rudd that he will retain these reforms into the future, if Labor is elected to govern. Australians planning for their future have a right to know,” Mr Dutton said.