Labor has today signaled that it might support the Coalition’s superannuation package, but only after an expert panel determines the package is not “retrospective” in its impact. From The Australian:
Bill Shorten has opened the door to supporting the Coalition’s most controversial changes to superannuation, urging an independent expert inquiry to test Malcolm Turnbull’s claim the changes are not “retrospective”…
“I think it’s probably appropriate to get an independent expert review to examine whether or not the changes are retrospective,” he said.
“If this review says that some of the changes are retrospective … then we can allay the concerns of hundreds of thousands of superannuants, indeed everyone in the superannuation system that we’re not seeing capricious changes undermining the integrity of the system.”
I can tell you now, Bill, that the Coalition’s superannuation caps most definitely are not retrospective since the changes would apply only to future super earnings, not income earned in the past.
It’s no different to when changes are made to pensions, family tax benefits, child care rebates, or the like. These are rarely grandfathered and almost always affect existing users, not just users in the future.
ABC Fact Check has already conducted an extensive examination of the “restrospective” claim and found that it was false.
I also find it interesting that Labor did not howl about “retrospectivity” when Peter Costello first relaxed the superannuation rules and applied them to pre-existing balances, not just new balances. It’s funny how people only complain about retrospectivity when a ruling is not in their favour and ignore it otherwise.
Moreover, if the Coalition’s cap is “retrospective” then so was Labor’s policy. Under Labor’s proposed superannuation reforms, announced prior to the election, annual earnings in retirement of more than $75,000 were to be taxed at 15% versus 0% tax currently. Assuming an historical 5% return, this equates to a super balance of $1.5 million – even less than the Coalition’s $1.6 million cap.
It’s time to drop the whole “retrospective” charade, Bill, and acknowledge that the Coalition’s superannuation reforms are unambiguously good policy.
These reforms are 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.
Indeed, recent ASFA research showed that the Coalition’s super policy could adversely impact 1.26 million wealthy people, but improve the lot of 4.3 million lower income earners, as well as improving the Budget.
So the Coalition’s super policy is not only sound from a public finances perspective, but is also equitable as it would help those people most at risk of becoming dependent on the Aged Pension in their retirement.
Get behind it, Bill.
Meanwhile, the Government is struggling against the loon pond to hold the cuts, at the AFR:
Liberal MPs pushing to overturn up to $2.5 billion in superannuation concession crackdowns from the May budget will be told they must identify alternative savings first so as not to leave the budget bottom line worse off.
With a showdown over the controversial crackdown expected when the Coalition party room first meets on Monday next week, sources said that Prime Minister Malcolm Turnbull and Treasurer Scott Morrison were standing firm and would insist that any revenue losses would have to be offset.
“There are financial consequences if there are any changes. Those arguing for change will be asked, ‘Where do you intend to find the savings from?’,” a senior source said
Surely they can find find some youth directed expenditure to slash instead.
