Supplementary Explanatory Memorandum(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)
General outline and financial impact
Government amendments to the Taxation Laws Amendment (Superannuation) Bill (No. 2) 2002 omit Schedule 2 from the bill. Schedule 2 introduced amendments to reduce the superannuation surcharge rates.
The measure to reduce the superannuation surcharge rates is removed from the bill and will be included in another bill together with amendments related to the introduction of superannuation co-contributions for low income earners. As the surcharge rate reduction and the co-contributions measures are both designed to encourage saving for retirement, packaging them together will co-locate measures which make superannuation contributions more attractive for both higher and lower income earners.
Financial impact: The removal of the measure to reduce the superannuation surcharge rates is expected to result in a revenue gain of $50 million in 2003-2004, $120 million in 2004-2005 and $200 million in 2005-2006.