First Option Blog

Home / Blog / Boost Retirement Savings by saying NO to Deposit Tax

Boost Retirement Savings by saying NO to Deposit Tax

Attention: open in a new window. Print

The Customer Owned Banking Association says the Federal Government can support “retirement savings” by walking away from the proposed deposit tax.

The Government has extended consultation on its Tax Review due to strong interest in how retirement savings are treated.

“The deposit tax will add an extra burden to retirees with savings accounts that currently barely match inflation and are already heavily taxed,” COBA CEO Mark Degotardi said.

In extending the tax review, the Government said it was interested in “how policy settings can better encourage more productive use of savings to optimise retirement incomes, in simpler and more effective ways.

“Deposits are the simplest and safest way for Australians to save for their future, yet they are already far more heavily taxed than other investments,” Mr Degotardi said.

“If the government wants to ensure ‘stability and certainty’ for retirees, it should not proceed with this new tax.”

Earlier this week, COBA launched the Save Your Savings campaign, pointing out that the deposit tax is anti-saver, anti-competitive and against the recommendations of the independent Financial System Inquiry.

“Our research indicates that only one in five Australians realises that savings accounts are already more heavily taxed than other investments, such as property, shares and super,” Mr Degotardi said.

“Introducing a deposit tax is no way to encourage people to save for retirement or optimise the income streams of retirees.

“A deposit tax will hit pensioners with deposit accounts who are enduring low returns due to record low interest rates.”