Labor's bungled and damaging retiree tax just gets worse, with new data showing the proposal would rip $3.75 billion out of 2.6 million APRA-regulated superannuation member accounts, including those held by pensioners despite Labor's so-called 'pensioner guarantee'.
Labor's proposal does not exempt pensioners whose APRA-regulated super funds are affected. These pensioners will be hit even if they were on the pension before 28 March 2018.
Australian Taxation Office data shows that most APRA-regulated funds (2,013 of 2,603 funds) received franking credit refunds in 2015-16 worth over $300 million.
This means that Labor's policy would deny around 2.6 million member accounts around $300 million in retirement savings each and every year.
Further, these lost savings can't then generate returns year on year meaning the cost to retirees is even higher. For example, APRA data shows superannuation funds have generated an average return of 3.5 per cent over the last 10 years. If the rate of return is the same over the ten years Labor has costed its policy then the cost in retirement savings is $3.75 billion over this ten year period.
When it comes to Labor and tax, Australians can be assured that the real impacts are always worse than they are willing to admit and that under Labor Australians will always pay more.
Labor's proposal is an old fashioned Labor tax sledgehammer targeted at pensioners and retirees to grab as much tax as possible because they can't live within their means and control their spending. It's a tax on low and middle income Australians and their future retirement nest eggs.
Remarkably Chris Bowen released a statement today confirming and bragging about the fact billions of dollars would be wiped from hundreds of thousands of super accounts, that pensioners won't be exempt and that Labor doesn't care. Let's not forget, this is the same Shadow Treasurer who when he announced the proposal said he knew it would hit pensioners and that he stood by the policy. Less than a fortnight later he announced a humiliating back down with his so called 'pensioner guarantee' that still does not protect pensioners.
Rather than patting himself on the back for ripping billions out of the retirement savings of pensioners and retirees, Chris Bowen should put his hand up, admit his proposal stinks and drop it.