The government has said Tuesday’s budget will aim to address perceived disparities between high-income and low-income workers when it comes to superannuation.
With Australia's baby-boomers - people who are now aged between 52 and 70 - now reaching retirement, superannuation is a hot budget topic. This year, the federal government is expected to limit lucrative tax concessions offered to high-income earners.
Currently, high-income earners pay 45 per cent tax on every dollar they earn above $180,000, but if they put money into their super fund, it is only taxed at 15 per cent. That is unless they earn more than $300,000, at which point the tax goes up to 30 per cent.
There is speculation the government will lower the income level where the 30 per cent tax applies, meaning more people will pay higher taxes on their super.
But financial expert Bryan Ashenden, from BT Wealth, told SBS News it would still mean big savings.
Bryan Ashenden from BT Wealth has told SBS he hopes the federal budget will help develop a fairer superannuation system. Source: SBS
"If you're in the top marginal tax rate today, even if you get an extra 15 per cent tax on your contributions going into super, it's still less tax than what you pay in your own hands,” Mr Ashenden said.
“The incentive is still there, the incentive might be a bit less, but it's still a positive thing to do because you're going to save more money doing it through super than doing it in your own name," he said.
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Hernan Moreno, 67, is happily retired from full-time work, as it gives him the chance to enjoy the things he loves the most – such as playing guitar in his Chilean folk group.
But Mr Moreno still works part-time, driving a bus for disabled people 20 hours a week. He said he received about $1500 a fortnight from his job and pension payments, and hasn't yet touched his superannuation.
"So far I'm happy with the money I'm getting," he told SBS News.
"It's one of the reasons why I'm not using yet the money I have in the superannuation."
Mr Moreno said he hoped the 2016 budget would keep his super balance healthy, so he and his wife could use it to travel.
Retiree Hernan Moreno hopes this year's budget will allow him to enjoy his retirement from full-time work, and not worry about his super. Source: SBS
"If there is a big change that is giving me trouble with my super of course I will be not happy,” he said.
“I am very happy with the job I'm doing, because [I work] two hours in the morning, then I come home, and then in the afternoon two hours more. Then I come home, playing my instruments."
Mr Ashenden said he hoped the budget will make the super system fairer.
"If you can reduce the amount of tax that lower income earners have to pay inside their super, it's got to be a positive measure if it incentivises people to put more money in,” Mr Ashenden said.
“I think that's always got to be looked at as a real positive, as a real opportunity."
A change to the eligibility for aged pension is also likely, but Mr Moreno said he would wait and see what was announced on that issue before he begins to worry.
"With budget or no budget, I want to continue the same,” he said.
