Tax Boost for Super Contributions?

30/01/2009

Newspaper reports suggest that the Henry Tax Review is currently considering ways of boosting the level of voluntary super contributions.  Since the beginning of the global financial crisis, voluntary super contributions have, for some retail and industry funds, halved.

Ways which are apparently being considered include:

• soft compulsion – where future pay increases will be paid as super contributions unless the member opts out; and
• accelerated tax deductions for salary sacrifice contributions for low income employees or employees on material leave.

As Dr Henry will report sometime during March 2009 on the retirement incomes aspect of the tax and transfer system, any proposals for change should be known within the next few weeks and certainly before the May 2009 Budget (only about 14 weeks away).

While we are not accountants (and not having accounting knowledge – not even Debits & Credits 101) – surely the decline in the value of financial assets and the uncertainty of whether or not a recession is impending has simply dampened investors investment desire and reduced their capacity to invest.