Bragg
Bragg

Call to ditch super for workers earning under $50K

NSW's newest senator wants the government to make superannuation voluntary for people earning under $50,000 amid growing internal party conflict over super policy.

Sydney-based Senator Andrew Bragg used his maiden speech to parliament to propose a radical superannuation shake-up which would see lower income earners able to pocket their super contributions every year at tax time instead of waiting until retirement.

Senator Andrew Bragg delivering his maiden speech in the Senate Chamber, at Parliament House in Canberra, on Wednesday. Picture: Kym Smith
Senator Andrew Bragg delivering his maiden speech in the Senate Chamber, at Parliament House in Canberra, on Wednesday. Picture: Kym Smith

Senator Bragg also lent his support to a growing group of MPs speaking out against plans to increase contributions to 12 per cent.

"Certainly the case has not been made for ever bigger super," Senator Bragg said, adding that he "did not believe the system is working for Australians".

Prime Minister Scott Morrison this week read the riot act to his party room over freelancing on policy ideas, telling them to go through internal party processes.

There is traditionally more freedom in maiden speeches to offer ideas publicly.

Senator Bragg's contribution came on a day that fellow Liberal MP Craig Kelly also raised the idea of including the family home in the pension test and was promptly rebuked by Treasurer Josh Frydenberg.

Mr Bragg hopes to gain support for his idea as he begins to canvass it with his colleagues.

"I would change direction: superannuation should be made voluntary for Australians earning under $50,000," Senator Bragg said on Wednesday.

Senator Andrew Bragg says all workers who earn less than $50,000pa claim the full pension, so should be able to keep their superannuation earnings at tax time. Picture: Kym Smith
Senator Andrew Bragg says all workers who earn less than $50,000pa claim the full pension, so should be able to keep their superannuation earnings at tax time. Picture: Kym Smith

"Taxpayers could simply tick a box to get a refund when filing an annual tax return."

The senator, a former internal auditor for Ernst and Young, has commissioned his own economic modelling on the impact that freeing up super contributions for lower income earners would have.

The modelling, commissioned from Rice Warner Actuaries, estimated savings to government of $1.8 billion in the first year alone.

This accounts for the higher tax rate on payments made into a bank accounts versus the low tax rate on superannuation.

Speaking to The Daily Telegraph, Senator Bragg pointed out that most people earning under $50,000 end up claiming the full pension regardless of super savings.

"Lower income people under this threshold will always take a full pension from a government. The idea of the taxpayer putting their hand in their pocket to pay for a tax concession on their super hasn't been thought through enough," he said.



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