Increased taxes on the superannuation nest eggs of high-income earners will fail to raise enough money to cover big ticket items at the heart of the Federal Budget.
_The West Australian _has been told the Gillard Government will have to look at cutting a range of programs or consider tax rises in other areas because superannuation changes will not deliver the necessary cash.
Fears within the super industry are growing that the Government will press on with changes aimed at reducing tax benefits enjoyed by high-income earners.
The changes, including an increase in the 15 per cent tax rate on income raised within a super fund, are pivotal to the Government's efforts to make room within the Budget for its education reforms and the National Disability Insurance Scheme.
But industry insiders say there are simply not enough people, even at incomes around $150,000, to deliver the billions of dollars needed every year for the education and insurance scheme proposals.
The education reforms as outlined in the Gonski report have been estimated to cost $6.5 billion a year once fully implemented. The NDIS is of similar magnitude.
Superannuation changes alone would not fill the spending holes created by the two major policy changes.
It leaves the Government scrambling through a range of other, potentially politically damaging, proposals to make the fiscal space available in the May Budget.
Funds do not require or hold information on the income of members. Imposing differential tax rates based on income would require funds to gather much more information from members.
Research by Mercer released yesterday showed Australians were already lagging other nations when it came to tax treatment of retirement incomes.Mercer found Australia's tax treatment of super meant private pensions in the US, Britain, Canada and Switzerland were higher after 40 years of contributions.
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