In a budget geared towards benefitting baby boomers, one item won’t get too much attention, but it reveals just how much many of them are costing taxpayers.
Buried in the budget papers in a section called “tax expenditures” is a table on how much the government gives up in tax as a result of tax concessions, including the tax forgone on superannuation earnings.
Earnings from superannuation funds are taxed at 15% when being accumulated, but are mostly free of tax after retirement.
In the budget papers on Tuesday, the government revealed that over the next three years, the superannuation tax concessions would cost the budget $78 billion, $7 billion more than previously forecast in the last budget.
The budget also contains many sweeteners for retirees or those nearing retirement age, including allowing people on the age pension to earn an extra $50 per week without it impacting the pension they receive from the government. There is also a skills training fund, and a subsidy for employers who hire older workers.
The age pension is by far the biggest welfare expense for the government, sitting at $46 billion this financial year, and projected to go out to $53 billion by 2022.
Newstart, by comparison, sits at $10.1 billion today, and is projected to be $11.9 by 2022.
Treasurer Scott Morrison said on Tuesday that the number of people on unemployment benefits is the lowest in 25 years, but the budget papers show the government has projected that unemployment will remain above 5% out to 2022.