The incessant white-anting of the Turnbull Government’s sensible superannuation caps by the so-called “ginger group” of conservative MPs has paid dividends, with Treasurer Scott Morrison agreeing yesterday to lift the cap on post-tax contributions from the $500,000 announced on Budget night to $750,000. From The AFR:
Mr Morrison has folded to demands by Coalition MPs and watered down the proposed superannuation concession crackdown in the budget. Mr Morrison agreed to extend from $500,000 to $750,000 the proposed lifetime cap on non-concessional contributions but keep it backdated to 2007.
Pathetic. Let’s recall Morrison’s testimony earlier this month about who would be the beneficiaries from raising the cap:
“The only people that would benefit are people who would already on average have $2 million in their superannuation scheme, have already put $700,000 in after-tax contributions… There about 42,000 of them in the country and that is less than 1% of the superannuants in this country. Now they are on higher incomes and have higher balances and have already benefited significantly from the generous tax contribution and other concessions that exist for superannuation. And the argument they are making is ‘I want more’. I want to put more in so that I don’t have to pay as much tax as somebody else on those earnings”…
“I’m saying that we should be getting rid of the Family Tax Benefit supplement payments … for people who earn a lot less than people who are able to put $500,000 after tax, after all their other superannuation contributions into their super account”…
“How can I look them in the eye and at the same time say: oh no, I’m going to protect this interest over here who’s sitting on half-a-million-bucks that they want load in and stuff more in and pay less tax on it?”…
And Morrison’s testimony on Monday:
“Ray, we can’t just keep saying that we’ll make a concession here or we’ll make a concession there and not make it up somewhere else. Because, if we keep going down that path, then our kids will have a bigger debt and they are going to have to pay for the fact that our generation didn’t live within its means… I find it pretty hard to look my kids in the eye and tell them they have got to saddle a higher debt because someone who had a very big income wanted to pay less tax”.
Yet here we are: Morrison has caved to the loony conservatives within the Coalition and watered down super reform for the benefit of the wealthy elite that currently enjoys far more generous government support in retirement than other taxpayers (see below AIST and Mercer chart).
Labor has been quick to highlight the hypocrisy within the Coalition:
“People would find it bizarre in this sort of parallel universe that the Government occupies that they obsess about Labor’s positions on things at the same time as they’re rewriting their own superannuation policy, going around the country at the behest of George Christensen and others, rewriting the superannuation policy they took to the people and said was ironclad,” said shadow finance minister Jim Chalmers.
As have the Greens:
The Greens have told The Australian Financial Review they cannot support what is effectively a concession towards wealthy superannuants while at the same time the government is insisting on budget cuts to welfare.
“How can you justify spending public money on a new concession for the very wealthy in this country when reform should be about making the system fairer?” said Greens Treasurer spokesman Adam Bandt.
“This is making the system less fair.”
The Coalition’s best hopes of holding on to government rest with it capturing the ‘middle ground’, and developing good policy in the national interest – reforms that blend Budget restraint with fairness, as well as combine efficiency with equity.
So far it is failing badly by lurching to the right and governing in the interests of the wealthy elite.
