Treasurer Scott Morrison has confirmed that there will be amendments to the Coalition’s proposed superannuation policies, but has kept the details of these ‘tweaks’ under wraps.
Mr Morrison went as far as saying that the draft legislation, which will be revealed shortly, will include exemptions for major life events, effectively softening caps put in place to limit super being used as a tax minimisation measure.
Speaking to 2GB yesterday, the Treasurer said there will be at least some technical changes to superannuation, contrary to the Coalition party line that it would stand firm to its election policy.
“I’ve already outlined what some of those changes were, even during the election campaign: one of them, if you get a payout as a result of an accident … that is exempted from the $500,000 cap,” said Mr Morrison. “If you’ve entered into a contract, before Budget night, to settle on a property asset out of your self-managed super fund and you’re using after-tax contributions to settle that contract, well that won’t be included.”
Exemptions for life events could cost the Budget between $300 million and $450 million.
The Coalition’s superannuation policy has been a source of unrest within the Liberal Party, with some members claiming it cost them votes in the election and threatening to cross the floor if their concerns were not addressed.
As far as lifting the caps, Mr Morrison believes that those on higher incomes “have already benefited significantly from generous tax contribution and other concessions for superannuation”.
Mr Morrison has appealed to voters’ sense of fairness, saying that the changes to superannuation need to pass in order to pay for family benefits.
“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?” said Mr Morrison.
There is still no indication that the Government plans to address the ‘retrospective’ nature of the $500,000 cap on non-concessional contributions.
Draft legislation from Financial Services Minister Kelly O’Dwyer is expected within weeks.
Read more at The Australian.
Mr Morrison may be right when he says that the savings made from the Coalition’s superannuation changes will help to pay for benefits for families and low-income workers. But you have to question the lost revenue the proposed changes will bring.
Most people will agree that the retrospectivity of the $500,000 cap on non-concessional contributions isn’t fair. It is the one aspect of the Coalition’s policy that is opposed by the Labor Party and most Australian retirees, and yet, it is the part of the policy that seems to be ignored.
Along with the reduction of annual concessional caps to $25,000, it is the change that will have the greatest impact on pre-retirees trying to plan for their retirement funding.
Whether the Treasurer is under orders or masterminding these policies, he seems to be making a habit of moving the goal posts. If the Government were to introduce retrospective legislation for super, what’s stopping it from doing the same with other tax measures?
And the fact that the Coalition almost unequivocally stated that it would not be moved on its superannuation policy in the lead up to Election 2016, yet now claims that further amendments were flagged prior to the campaign, just shows that we can’t simply rely on the word of any member of the Government.
With regards to the future of super, the Coalition seems to be happy to offer a clue here and retract a statement there, but it doesn’t seem to realise that it is playing with retirees’ futures.
In the meantime, we’re probably all just better off waiting for any superannuation policy to be put in writing. So, nothing to see here …
What do you think of these proposed tweaks to the Coalition’s superannuation policy? Do they make the policy fairer? Or are they, once again, looking after the top end of town?