D-Day arrives for Turnbull’s super reforms

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By Leith van Onselen

After months of white-anting by a handful of conservative backbenchers within the Coalition, Malcolm Turnbull has called Coalition MPs to Canberra for a party room meeting to thrash-out, for once and for all, the Coalition’s policy. From The AFR:

The MPs were notified on Friday of the meeting where it is expected Treasurer Scott Morrison will seek support for the package taken to the election including changes he has negotiated with the backbench, especially to the proposed $500,000 lifetime cap on non-concessional contributions.

The favoured change was to increase the cap to $750,000 but keep it backdated to 2007. Getting an agreement will head off internal unrest before Parliament starts on Tuesday.

Meanwhile, pressure on the Coalition to pass its super reform package unadulterated is building.

On Friday, Liberal MP Russell Broadbent criticised Treasurer Scott Morrison for failing to reach-out to his opposite number – Labor’s shadow treasurer Chris Bowen – in order to get the Coalition’s reform package through. From The Guardian:

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The veteran backbencher told Guardian Australia on Thursday he could not comprehend why the treasurer had rebuffed Labor’s recent overture on superannuation given there was such a significant overlap between the Coalition’s proposition and Labor’s.

“We are so close now, there’s hardly any difference,” Broadbent said. “I think we need to reach across the aisle. Why are we attacking Labor?”…

“Both the prime minister and the opposition leader know a combination of these two policies is fair. You’ve just got to take the opportunity,” he said.

“They could really come to a compromise here that would benefit the nation as a whole.”

Greens leader Richard Di Natale has also threatened to pull their support if the Government waters down its superannuation package. From The Australian:

“We will look at the detail of the legislation when it comes forward but the great danger here is Malcolm Turnbull being so compromised within his own party — it looks like he’s making more and more concessions to the hard right — and what we’re going to end up with is a very watered-down version and certainly, if that happens, we will not support it.”

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Meanwhile, industry superannuation funds have today come out in favour of the Coalition’s original superannuation reform package that it announced in the May Federal Budget. From The AFR:

“They improve the equity of the system and while the package isn’t exactly how we would design it, it strikes a reasonable trade-off between competing priorities,” [ISA chief executive David Whiteley] told The Australian Financial Review.

“We would expect there might be differences of opinion on individual measures within and between parties in the Parliament.

“Everyone is entitled to put forward their ideas for improvements but we would urge everyone to act in good faith and find a way to pass these important reforms. Doing nothing would be a travesty,” Mr Whiteley said.

Passing the Coalition’s original superannuation package should have been a ‘piece of cake’. But stupidly, Turnbull and Morrison allowed the small but vocal group of right wing conservatives to hijack the debate, thus jeopardising much needed reform in this area.

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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.