The incessant white anting of the Coalition’s superannuation package from the “ginger group” of conservatives within the Coalition’s own ranks seems to be paying dividends, with reports emerging over the weekend that Prime Minister Malcolm Turnbull and Treasurer Scott Morrison are considering watering down their super package. From The Australian:
Mr Turnbull confirmed Treasurer Scott Morrison has addressed some of the technical details involved in the changes, but declined to confirm what they were, saying he won’t be making “policy on the run”.
“I am listening very keenly and carefully to concerns that are being raised by my colleagues and by other people in the community,” Mr Turnbull told reporters in Sydney.
Reports suggest Mr Morrison will be offering exemptions to divorcees, people who inherit from deceased estates and farming families to the $500,000 cap…
Former defence minister, David Johnston, was the latest conservative MP to speak-out publicly, claiming the super package was a “breach of trust” for coalition supporters. From The Canberra Times:
“Trust is something that politicians have very little of and we’ve burnt a lot of it in this campaign. Moving the goalposts and retrospectively adjudicating people’s entitlements is something that I think is repugnant to the way particularly people in Western Australia relate to Canberra,” Mr Johnston told Sky News.
“I think [Mr Turnbull] needs to reassess the situation,” he said, calling for the backdating of the $500,000 cap to be removed.
The claim that the $500,000 cap on lifetime superannuation contributions from post-tax earnings is somehow “retrospective” does not hold water. Here’s how ABC’s Fact Check comprehensively refuted this claim:
It is the case that the lifetime cap is calculated from July 1, 2007. But those who have already exceeded it through past contributions will not suffer any direct adverse consequences, irrespective of the size of the excess.
They simply will not be able to make any additional contributions in the future.
In fact, these people are in a better position than those who have not yet exceeded the $500,000 cap or do not yet have a super account. The latter group will never be able to exceed the cap.
This measure could only be retrospective if the chosen definition is so broad that it encompasses every policy change that applies to existing superannuation accounts.
Potentially, some super account holders who assumed the law would never change may have their arrangements disrupted. But this alone does not make a change retrospective…
Only on the broadest possible meaning could the lifetime cap on non-concessional contributions be described as retrospective.
Those who have already exceeded the cap will not have to transfer any money out: they are, in fact, advantaged over those who have not yet reached the cap.
Ultimately, using the “retrospective” label is a convenient way for those affected to criticise the changes when the underlying objection is based on the increased tax they will have to pay.
Moreover, the Budget is expected to lose some $550 million of savings over four years if the cap takes effect from Budget night, rather than 1 July 2007, making it an important ingredient for Budget repair.
I have said it before and I will say it again: Malcolm Turnbull must stop kowtowing to the conservative nutters within the Coalition. They are precisely the reason why he lost his luster with the electorate.
Turnbull swept to power in a wave of public support in mid-September 2015, only to lose the electorate’s good will within just six months because he embraced the conservatives within his party and performed a smoking U-turn on issues such as climate change, same sex marriage, and the elimination of property tax concessions, all of which he previously supported.
About the only area where Turnbull has promised meaningful reform is unwinding some of the disastrously inequitable and expensive superannuation reforms of Peter Costello. These reforms have the closest thing to tri-partisan support between Labor, the Coalition and The Greens that you are ever likely to see, which should make passing the package through parliament straight-forward.
If Turnbull and Morrison fail to get its superannuation package through the Coalition party room, then they will once again prove that the conservatives are running the show. Turnbull and Morrison will be beholden to these nutters for the remainder of this political terms, stifling their ability to govern effectively in the national interest.
They simply must win the battle on superannuation or they will be forever on-the-hook to the conservatives.
