What is the Future of Deductible Super Contributions?

One principle reason for the demise of the superannuation contributions surcharge was that the implementation and collection costs were excessive.  In fact, the ATO had very significant implementation problems.

Given the discredited surcharge model, there seems to be two ways the Government could reduce the tax benefit of super contributions:

• treat all deductible super contribution as being subject to fringe benefits tax.  But this would only apply to employer contributions.  Further this method will not deal with personal deductible contributions and also employer contributions made by tax exempt employers.  Finally, how could it apply to contributions to defined benefit funds where the contribution rate may vary significantly from year to year?
• treat all deductible super contributions as being assessable in the fund’s hands at the highest marginal tax rate with the fund receiving a tax refund for any members whose tax rate is less than the highest?
• change super contributions from deductions to tax rebates.

One thing the Treasurer seems to have forgotten is that only six months before, the Treasurer, in the May 2009 Budget, very significantly reduced the tax benefit of super contributions by the simple device of reducing the concessional contributions cap to $25,000 per contributor per year.  (For the sake of dramatic emphasis and one-sided opinion we make no reference to the transitional concessional contributions of $50,000 for the oldies as this concession flatlines on 30 June 2012.)