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Labor backs more super tax on rich

Labor backs more super tax on rich

The Opposition has offered to help the Federal Government increase tax on superannuation for wealthy retirees.

The offer from shadow treasurer Chris Bowen has sandwiched the coalition between the economic imperative to find more revenue and Tony Abbott's pre-election promise not to make any "adverse" changes to superannuation.

A new analysis by the Association of Superannuation Funds of Australia has highlighted the extraordinary taxpayer-funded benefits that flow to high-wealth individuals because of the 2006 Howard government decision to make retirement income tax-free.

Using Australian Taxation Office and Australian Bureau of Statistics figures, ASFA found more than 100,000 people had superannuation account balances of more than $2 million.

Of these people, 70,000 had more than $2.5 million, and 475 had a super balance of more than $10 million and received tax-free incomes of $1.5 million a year. In 2012-13, 24,000 retirees received $5.2 billion in super payments, or about $217,000 each, tax-free.

By comparison, 51,700 retirees with between $1 million and $2 million in their super accounts received about $4.9 billion in tax-free payments in 2013-14.

ASFA chief executive Pauline Vamos said its report showed tax super concessions were not being targeted as well as they should be.

Mr Bowen said tax concessions needed to be targeted at improving retirement incomes of the less well-off.

"When you've got people with millions and millions of dollars in their superannuation account, they are unlikely to ever need the age pension," he said. "They are unlikely to ever darken the door of their local Centrelink office to ask for the age pension."

The Government has offered some crossed lines about Labor, with Treasurer Joe Hockey saying he was prepared to seek bipartisanship on "real reform of the taxation system" while the Prime Minister dismissed the Opposition's comments.