The Super Guarantee: Keating's Great Big Tax on Everything
A submission by Prosper Australia* to the
Inquiry into the Mineral Resource Rent Tax Bill 2011 and related bills
(Senate Standing Committee on Economics)
We submit that:
A federally mandated, employer-funded superannuation contribution of 9% of wages/salaries is equivalent to a federally funded contribution paid for by a 9% federal payroll tax — equivalent in every respect, except that the former arrangement is off-budget so that its scale, inefficiency and regressiveness can be kept out of the news. This hypocrisy should end: compulsory superannuation, like any other tax-transfer program, should be on-budget so that its targeting and funding are exposed to public criticism.
The revenue from taxes on super-normal profits, being volatile, is unsuitable for funding recurrent expenditure but eminently suitable for diversion into superannuation.
The present combination of compulsory super contributions and the GST is patently worse than an NZ-style “all-in” consumption tax raising the same revenue. If the latter is too terrible to contemplate, the former should be considered more so.
The revenue from a broad-based land-value tax, being reliable (the more so because it promotes and stabilizes economic growth), is capable of funding recurrent expenditure. In political terms it is especially suitable for hypothecation for the age pension, because the desire to avoid churning leads to a tax exemption for the principal residences of persons of pensionable age.
- If it were visible, it would be risible
- Null hypothecation
- The Super Guarantee already depends on the tax power
- Keating's Great Big Tax on Everything is worse than Howard's
- If retiring on property investments is such a good idea...
Full textSee: Submissions received by the Committee (No. 25).
* Lodged 23 December 2011. P.S.: See also Maximalist ‘fiscal devaluations’ for Greece and Australia.