Government to hit low-income earners' super contributions

THE Abbott government will reward high-income earners while scrapping Labor's plans for help to low-income earners' superannuation, amid a raft of changes to tax plans dating back more than a decade.

Treasurer Joe Hockey announced the changes on Wednesday, declaring he was dealing with the backlog of 92 tax-related plans that had not been legislated.

Chief among the changes were giving high-income Australians superannuation relief by ditching Labor plans to tax super earnings above $100,000.

At the same time, the government will hit low-income earners' super contributions, which under Labor would have given those earning below $37,000 an extra $4500 a year.

Smokers will be hit with at least a 50% rise in excises on tobacco products over the next four years, adding about $5.2 billion to government coffers as a result.

Mr Hockey also promised to scrap a Labor plan to cap claimable self-education expenses at $2000, which he said would have only hit those seeking to better their earning potential.

While social services groups have criticised the changes, business groups and universities have largely welcomed them.

Of the 92 measures, Mr Hockey said the Coalition did not want to proceed with 18 revenue-raisers, but would anyway, due to a potential $10.9 billion boon for the federal budget.

He said three other changes would also go ahead with some changes, while the government was leaning towards scrapping the remainder.

However, he said Assistant Treasurer Arthur Sinodinos would lead a review of the remaining 64 proposals, "with industry", before making any final decisions.

While Mr Hockey blamed the previous Labor government for not proceeding with many of the tax reform proposals, several also dated back to inaction on reform during the Howard government era.

Despite his own frontbench colleagues warning of the end of the car manufacturing business in Australia, he said the industry was "back open for business", with changes to fringe benefits tax on cars to be ditched.

Opposition Treasury spokesman Chris Bowen hit out at the changes on Wednesday, saying Mr Hockey was giving tax breaks to rich while hitting Australia's poorest workers.

He also called on the Treasurer to release the mid-year budget outlook as soon as possible, after Mr Hockey said he hoped to reveal it "by Christmas".

Mr Bowen said there was no longer any reason for withholding the fiscal statement, saying Mr Hockey "must update the Australian people on the budget".

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