Mr Morrison reveals clues about further ‘tweaks’ to super

Scott Morrison has confirmed there will be ‘tweaks’ to the Coalition’s super policy.

Mr Morrison reveals clues about further ‘tweaks’ to super

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.

Opinion: Nothing to see here …

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?

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    COMMENTS

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    KSS
    9th Aug 2016
    12:09pm
    Nothing to see here is right. No point is getting all het up when we don't know what to get het up about.
    MICK
    9th Aug 2016
    2:20pm
    Yeah. Don't expect too much. Any (supposed) changes just likely to benefit mainly the top end.
    In the end it the government will take more than it gives back. If not then how (supposedly) can it repay debt. Ok, it has no intention of repaying debt. Familiar game: say one thing and do the opposite. What else is new.
    HarrysOpinion
    9th Aug 2016
    3:41pm
    It works like this. The Government introduces a legislation. makes a hero song and dance about it publicly then it authorises thousands of exemptions from the law, quietly.
    Old Geezer
    9th Aug 2016
    12:14pm
    He has to get it through parliament and the senate before I will even be interested. Lots of changes will need to been done for this to happen.

    9th Aug 2016
    12:32pm
    I find this topic most amusing. In reality, what we are asked to comment about is stopping rich people from taking advantage of existing superannuation legislation. The changes won't affect the ordinary voter, in fact they won't affect about 98.6% of ordinary Australians.
    Old Geezer
    9th Aug 2016
    1:10pm
    There will be a lot more people effected than will be effected by the new pensioner asset tests in 2017.
    KSS
    9th Aug 2016
    1:23pm
    Actually Old Man, the way the super changes are currently proposed (i.e. those taken to the election) they will affect far more people than many realise. I cannot in anyone's language be deemed wealthy. I earn well under the average salary working in the NFP sector, I almost own a very modest 2 bedroom unit in a less desirable suburb (i.e. I have a small remaining mortgage of around $45000) and am about 5 years away from meeting the age eligibility criteria for the age pension.

    I will be significantly affected by the changes that include:
    * winding back/eliminating current transition to retirement
    arrangements
    * reducing the amount that can be salary sacrificed (from $35,000
    pa to just $25,000 pa which includes the employer contribution
    by the way)
    * reducing the amount of 'assets' a single person can hold
    resulting in a probable loss of any possibility of a part pension

    And all with very little time left to put in place a new financial plan that would allow me to continue to save for a more comfortable self funded retirement at the same level. So please let's not run away with the idea that only 1.4% of ordinary Australians are going to be affected because that is quite simply untrue. The 'ordinary voter' will be very much affected by the current 'known' proposed changes.

    But then of course I am 'rorting the system', engaging in 'tax evasion' and generally 'diddling' some other pensioner out of a pension increase right? All because I sacrifice meals out, holidays and other unnecessary expenses in order to look after myself in the future as I have done to date.
    Old Geezer
    9th Aug 2016
    1:35pm
    No I believe the cry is you are not rorting the system unless you are a fully funded self funded retiree. Then because you don't get the pension at all you are somehow rorting the system and must be engaging in some sort of tax evasion.

    But if I upsize my house, give the kids big lumps sums five years before I am eligible for the pension, buy a new car and caravan so they depreciate well over the next 5 years then I am doing OK and have not rorted the system or evaded tax. I forgot about those round the world trips for the next five years as well as I wait to be old enough for the pension.

    So do the right thing and you get punished but by following the above you are rewarded.

    Awesome system we have.
    MICK
    9th Aug 2016
    2:22pm
    The problem with superannuation as it stands is that it allows the very well off to disproportionately milk the subsidies. Superannuation was set up for average Australians to fund their retirements and the rich will retire very nicely without putting their hands into taxpayer funds.

    9th Aug 2016
    12:42pm
    I don't believe anything until I see it enacted, and even then it can be altered if it's deemed by government to be too fair (generous) to those it effects - politicians exempt, of course. Selfish sods!
    MICK
    9th Aug 2016
    2:25pm
    Remember that the senate is not going to be a coalition rubber stamp Eddie. This is what Turnbull wanted but he got a rude shock. Despite the normal right wing media orchestrated propaganda campaign sanity won out and voters, who do not trust either side, saw fit to put 3 more Independents into the senate as well as another in the lower house. No wonder Turnbull blew up on election night.
    Anonymous
    9th Aug 2016
    3:52pm
    Yes, MICK, he blew up after HIDING in his house. And we are supposed to REPSECT someone like that?. Pig's arse!
    Phil1943
    9th Aug 2016
    1:29pm
    It's really quite simple. What will add to the government's dwindling revenues without overly offending its voting support base? That's what will happen. The logical conclusion is that, one way or another, the feds will look for ways to take more out of what income-earners are now putting into super and to also tap into existing SMSF-generated income streams via taxation. ScoMo and cronies are still trying to figure out how to do this, and the longer it takes, the more watering-down of pre-budget threats will happen.When we do eventually see these 'reforms' they won't be terribly dramatic.
    Old Geezer
    9th Aug 2016
    1:37pm
    Agree they are not looking after the right people with these changes.
    MICK
    9th Aug 2016
    2:28pm
    A pity that both sides cannot get together on a measure. I thought that the negative gearing scams needed changes as these benefit mainly the top end. A bit of common sense and compromise might have seen that one work, but don't ever expect the rusted on coalition to bend even a bit. So the game goes on.......until early next year when we are likely to have another election.
    Rae
    9th Aug 2016
    4:37pm
    Leon they have already made retrospective legislation so that horse has bolted. Sorry the media missed it. It only effected some old public servants like nurses and police, firefighters and teachers. No one gives a damn about them. Not while they serve society and certainly not after they retire.

    9th Aug 2016
    8:40pm
    I read somewhere recently that only 200,000 people have large super balances.....05% of the population....above 2.5 million dollars.
    Needy not Greedy
    9th Aug 2016
    9:56pm
    And the Gold Medal winner for cockheads of the the year is the Federal Governments Census Department who assured everyone yesterday that the Census site could not possibly crash as it had been tested at way past it expected capability, fact is that it was rooted at 8.10am this morning when ourselves and friends were able to fill the form but unable to submit it, and surely traffic would have been light then.
    PlanB
    10th Aug 2016
    7:50am
    I would not trust Morrison as far as I could kick him -- I can not stand the man or his attitude not much different than the maggot he replaced -- (Hockey) but then I can't stand any of that lot at all.
    Strummer
    10th Aug 2016
    9:36am
    Did ours on Monday night, no problem.