Super funds question Treasury concession claims The $1.5 trillion superannuation industry has questioned Treasury's estimates that super concessions cost the budget $32 billion in revenue foregone a year. The comments come amid speculation the federal government will increase taxes on the super of high-income earners at the May budget, although industry sources say doing so could be an administrative nightmare. The government has been considering boosting the tax on the super fund earnings of high earners from 15 per cent to 30 per cent. The change would net between $500 million and $1 billion a year. An alternative proposal - boosting the earnings tax on all super accounts from 15 per cent to 20 per cent - may raise $4 billion a year, and much more over time as fund balances climb. Treasury calculations suggest that unchecked, the total cost of the super concessions is set to explode from $32 billion per year in 2012-13 to $45 billion by 2015-16, the end of the next parliamentary term. By then it would exceed the projected cost of providing the aged pension. But Pauline Vamos, chief executive officer of the Association of Superannuation Funds of Australia, has disputed Treasury's estimates on the effect of tax concessions. When you look at the cost saving on the age pension, at the moment it's $7 billion dollars. In the future, by 2037, it's going to be $55 billion," Ms Vamos said. Ms Vamos said the priorities for super should be ensuring that baby boomers are prepared for health and aged care costs in retirement, making sure that the self-employed and independent contractors have sufficient balances, and keeping pace with increased life expectancies. Listed wealth manager AMP yesterday declined to comment on speculation on the budget, saying only that "tinkering with super does affect confidence." David Whiteley, chief executive officer of industry super-fund body the Industry Super Network, said although there were "extraordinarily legitimate questions about the sustainability and the equity of the current tax concessions arrangements," there was no need to rush. "You've got different industry bodies and Treasury and government all with a different interpretation of the statistics," Mr Whiteley said. It's absolutely clear that the best outcome for the community would be some stable taxation and policy settings for the superannuation system, and stable over a medium to longer term period, say five to 10 years. To achieve that you would inevitably seek to have bipartisan support and you'd also seek ... community support. Achieving that outcome, it's something that in our view would be better undertaken after the coming election. The Financial Services Council (FSC), which represents retail super funds, last month joined forces with a self-managed super body to say that new taxes on superannuation would be a "breach of trust between the government and working Australians." "Every time a new tax is threatened, confidence in the system is lost," FSC chief executive officer John Brogden said. The two groups also called on the Coalition to support Labor's Low Income Superannuation Contribution, a government super payment of up to $500 per financial year for people earning up to $37,000. Questioned whether the tax concessions on high-income earners were too generous, Superannuation and Financial Services Minister Bill Shorten said: "What I do think as a general principle is we need to make sure that everything we do is sustainable." He added yesterday that "what we've got to do now is always make sure that our tax concessions are supporting people to get a comfortable retirement." With Peter Martin