Morrison tells super rebels to stop being selfish

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By Leith van Onselen

Treasurer Scott Morrison has fired another shot in the battle to pass the Coalition’s superannuation reform package, effectively telling the party’s superannuation ‘rebels’ to stop being so selfish. From The AFR:

Mr Morrison pointed out on Wednesday that those who would be most affected insofar as they had already reached the cap, have made an average $700,000 in non-concessional contributions and had average super balances of $2 million.

“I can’t see in this environment, for making the system sustainable, and in this environment where we’re having to make changes across the board on the budget, how you can run an argument which says that you’ve already put $700,000 in, you already have a super balance of $2 million, we should allow another $500,000 on top of that while we’re making changes in difficult areas,” Mr Morrison said.

Too right. Do these super ‘rebels’ honestly wish to maintain a superannuation system that is so generous to highest 10% of income earners that they receive more generous taxpayer support in retirement than the other 90% (see below chart)?

ScreenHunter_9940 Oct. 27 07.30
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If the $500,000 cap on non-concessional contributions was applied to Budget night rather than 2007, as demanded by these ‘rebels’, then many wealthy people would immediately contribute another $500,000 and accumulate an even larger superannuation balance, which would be unfair to younger generations on the wrong side of the drawbridge, would lose out having paid higher taxes to fund benefits for older generations.

The simple fact of the matter is that the wealthiest segments of the population, who also derive the biggest benefits from superannuation concessions, cannot be quarantined from bearing any pain. They too must play a role in Budget repair.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.