"To say that people on a 39% tax rate will move bank deposits to the new investment tax rules so as to limit their tax to 33% is uninformed and inaccurate.
"The new rules do limit tax on savings to a maximum of 33%.
But that simply continues existing rules for superannuation and similar savings vehicles. What the new rules do is tax those on a 19.5% tax rate at their correct personal rate, but those on higher incomes will continue to be taxed at 33%.
"So if you earn over $60,000 a year and have a bank term deposit the interest is taxable at 39%. The same person can currently save in a superannuation fund investing in bank securities and the tax is 33%.
"The simple fact is that a bank deposit is different from saving through a superannuation fund and is taxed differently. This has been the case in the past and will be the case under the new rules," Cullen says.
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