The sorry saga of the Turnbull Government’s superannuation reform package is now likely to drag into October, with Treasurer Scott Morrison insisting that backbench MPs resisting the $500,000 planned cap on post-tax contributions come up with alternative savings. From The AFR:
Treasurer Scott Morrison, who has been negotiating changes behind closed doors with MPs in recent weeks, has stipulated that any revenue lost must be replaced by changes within the superannuation system itself, and not taken from another portfolio area…
The key compromise option proposed to the backbench was to lift the limit to $750,000 but keep it backdated.
Sources said the $750,000 option and others had been costed by Treasury as the negotiations have ground on…
The complexity of the legislation and Mr Morrison’s insistence that the changes be funded by cuts to super concessions elsewhere is further complicating the process, because there are no simple options.
To Morrison’s credit, he is at least demanding that the rebel MPs come up with alternative savings offsets within the superannuation system itself, rather than from some other area (e.g. further cuts to the poor).
The Turnbull Government’s super package is projected to save the Budget some $2.9 billion over four years, in addition to funding the low income superannuation tax offset, which means those earning less than $37,000 would not have to pay more tax on their super than they do on their income.
As long as Morrison does not remove the low income superannuation tax offset, then there is still a good chance of achieving meaningful reform.
Still, the whole superannuation fiasco does highlight the dysfunctionality within the Coalition. A properly functioning party would have agreed on a reform package before taking it to the May Budget and the Federal Election, not announcing it first then arguing about it and changing it later.
