Labor continues to white ant super reforms

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By Leith van Onselen

Ever since the Turnbull Government first announced its superannuation reform package in the May Budget, the Labor Party has run a phony campaign claiming that the proposed $500,000 cap on post-tax contributions was “retrospective” because the start date would be 2007, and demanded that it be brought forward to Budget night or 2017.

ABC Fact Check has already conducted an extensive examination of your retrospective claim and found that it was false. Why? Because the changes would apply only to future super earnings, not income earned in the past.

The Grattan Institute’s report, released last week, also concluded unequivocally that the proposed superannuation caps are not retrospective.

Yesterday, Labor persisted with its lies about retrospectivity, asking the following during Question Time:

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Chris Bowen to Scott Morrison: I refer to the treasurer’s previous answer in which the treasurer said the government was committed to the revenue from its superannuation policy but failed to confirm the government is committed to the policy itself. We ask again – can the treasurer confirm the concessional cap for superannuation will continue to have a $500,000 limit and a 2017 start date?

Morrison talks about how important the superannuation reforms are but does not commit to the specific measures…

Plibersek to Morrison: Given that it’s more than four months since the budget, can the treasurer confirm that the nonconcessional superannuation cap will continue to have a $500,000 limit and a 2017 start date?

Morrison: We continue to pursue those measures because those measures are essential to not just the equity of the system as it stands but the intergenerational equity as we have a growing and ageing population…

Let’s be clear, Labor’s demand that the $500,000 cap begin in 2017 would make the Coalition’s superannuation reforms much less fair. This is because many wealthy people already with significant superannuation savings would contribute another $500,000 and accumulate an even larger superannuation balance. By contrast, younger generations on the wrong side of the drawbridge would lose out having paid higher taxes to fund concessions for older generations that they themselves won’t receive.

The Grattan Institute made a similar point in its recent superannuation report:

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Grandfathering the tax-free status of accounts for existing retirees might be politically expedient, but it is neither prudent nor fair. It would mean that the reform would contribute little to the budget for many years. It would also exacerbate the intergenerational transfers of the existing tax breaks – younger generations would continue to fund generous tax benefits for which they will not be eligible…

Please Labor, stop lying to score some cheap political points and instead work with the Government to get its superannuation package through parliament unadulterated.

Australia might only get one chance to achieve meaningful superannuation reform, so don’t waste it for selfish reasons.

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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.