Category: Newspaper/Blog Articles/Hansard

Super changes slapdash and misguided says banker Mike Smith

Australian Financial Review

Home Personal Finance Superannuation & SMSFs Jul 15 2016 at 12:15 AM Updated Jul 15 2016 at 12:15 AM

by James Frost

Former ANZ chief executive Mike Smith has rounded on the Turnbull government’s superannuation changes, describing the new measures to wind the clock back and cap contributions as slapdash and misguided.

The career banker, who was at the helm of ANZ from 2007 to 2015, is the latest in a line of financial services heavyweights to take the government to task as it stares down a restless backbench over its controversial super policy.

“I think they are a little confused frankly,” Mr Smith said. “Being retrospective on some of these things, that’s just crazy,” he said.

Mr Smith has joined the backlash from the Liberal Party’s electoral heartland and government MPs, as well as many in the wealth industry who have argued that some of the government’s proposed super changes were doomed because they were too difficult to implement.

Conservative MPs such as Tasmanian senator Eric Abetz, Kevin Andrews and WA senator Chris Back on Thursday challenged Prime Minister Malcolm Turnbull over his conduct of the election campaign and the superannuation policy.

Mr Turnbull tried to shut down opposition to the changes on Wednesday, including the most controversial measure – the $500,000 lifetime cap on super contributions backdated to 2007. He said the government would be presenting the same budget measure to Parliament that it took to the election.

Mr Smith said the decision to wind back the clock and cap non-concessional contributions from 2007 needlessly introduced an element of uncertainty into retirement planning.

“What you should say is ‘OK, well they’re grandfathered. But anything you do in future, you have to do it on this basis’. That’s how legislation should work.

“Otherwise, people just never know where they stand and that uncertainty doesn’t do anything for the underlying confidence in the economy,” he said.

Mr Smith, who steered one of Australia’s largest banks through the financial crisis, says that although the rationale for the changes is valid, the approach and execution of the changes left a lot to be desired.

“I get what they’re trying to do, they’re trying to make the system fairer, I have no problem with that but I think there are better ways of trying to do some of the stuff. I think it’s got to be much clearer.”

He echoed the sentiments of the Financial Services Inquiry chaired by former CBA boss David Murray that recommended a wholesale banning of geared property investment by super funds but the government has failed to show an interest in it.

“The question to ask is should you be allowed to leverage super funds? Frankly, that’s the question to ask. Is that an appropriate thing to do?”

“But rather than mess around with the sides, you should grab the bull by the horns and say ‘OK, this we will not allow’, say property into self-managed super funds, or leverage of any sort”.

Mr Smith, who appears inside the August edition of Smart Investor magazine in The Australian Financial Review today, has also sought to defend his legacy at the bank as the architect behind the bank’s ambitious Asian growth strategy.

“I’m very happy with what we achieved,” he said. “We were able to make significant inroads at a time when others were withdrawing”.

He also had some parting words for the analysts who regularly came into conflict with the banker over the Asian strategy on results calls.

“These analysts are interesting, I mean none of them run anything and their own organisations don’t use them for advice so you wonder why the market does.”

Federal election 2016: Super contributed to Libs’ poor result

The Australian July 9, 2016

Judith Sloan – Contributing Economics Editor Melbourne

To what extent did the superannuation changes announced in the budget contribute to the Liberal Party’s poor electoral outcome?

All week, Scott Morrison has peddled the line that superannuation was irrelevant. His argument is, in the 10 seats in which voters are most affected by the changes, the party held on. In half of the cases there was a swing to the ­Liberal Party. Let me tell you: the Treasurer’s remarks are just spin. The superannuation issue came close to ­derailing the Liberals’ campaign as floods of complaints were fielded; party resignations from longstanding members were reluctantly accepted; donations dried up; and previously willing volunteers refused to help in any way.

In NSW, there was such a shortage of volunteers there was little scope to offset the impact of unionists and GetUp! supporters brought in to urge a vote for Labor to the people waiting in line to ­record their votes.

But the impact did not end there. The raft of ill-considered and over-engineered changes that were announced out of the blue on budget night, just days before the campaign began, repre­sented a fundamental breach of trust for many Liberal Party supporters.

After all, Tony Abbott, before and after the 2013 election, had made it perfectly clear that there would be no adverse changes to the taxation of superannuation during his term of government.

This pledge was reinforced by then treasurer Joe Hockey in last year’s budget, when he declared “there will be no new taxes on superannuation”. He went on to say: “I want to reassure all Australian workers that they can have confidence in their retirement plans.”

And if that’s not bad enough, in February Morrison himself told the audience at a superannuation conference: “The government has made it crystal clear that we have no interest in ­increasing taxes on superannuation, either now or in the future … unlike Labor, we are not coming after people’s superannuation.”

That statement lasted less than three months, when the taxation of superannuation suddenly was described in the budget papers as amounting to “estate planning and tax minimisation”. Numerous changes were announced to ­extract an additional $6 billion across the forward estimates from people on higher incomes and those who had entered into superannuation arrangements in good faith, including those now on transition-to-retirement plans.

To justify the breaking of a promise, Morrison emphasised how the changes would affect only 1 per cent or 4 per cent of the population — his figures moved about a lot but were always wrong. (The actual figure is close to 10 per cent; Mor­rison should never have relied on Treasury for information or ­advice.)

But what was his point? There aren’t many of you and, sure, you have played by the rules, but we are prepared to do you in the eye because it suits the present government. Let’s face it, it was Tony’s promise and Malcolm is not bound by his commitments.

And, by the way, we can recycle some of the money to give a tax break to low-income earners who are going to end up on the full age pension in any case. The ABC, Fairfax Media and left-wing think tanks even may give us a pat on the back for our audacious but reasonable changes to super­annuation, changes that go much further than Labor’s proposals.

The clear message to those ­affected by these changes, now and in the future, was that they could just suck it up. After all, ­Assistant Treasurer Kelly O’Dwyer had described superannuation tax concessions as, bizarrely, a “gift from the government”. On this logic, the gift could be taken back any time by the government — actually, by the small number of out-of-touch ministers who planned the heist.

But when did the percentage of the population that might be affected by a change ­become the driver of good policy? Would it be sensible to apply a 99 per cent marginal income tax rate to the top 1 per cent of income earners and declare it good policy because so few people are affected? When did such base utilitarianism drive Coalition policy?

The superannuation fiasco didn’t get any better during the campaign. Neither Foreign Minister Julie Bishop nor Resources Minister Josh Frydenberg could explain the changes to the transition-to-retirement provisions during a Melbourne radio program. These provisions actually affect a lot of people on modest incomes.

Bishop subsequently made the suggestion that she would explain the superannuation changes after the election. Was she kidding? Did she think this was helping?

And she was quickly pulled into line when she declared there could be some changes to avoid “unintended consequences”.

Morrison, stubborn and unyielding, wasn’t having a bar of any backing down.

Mind you, he had quickly backed down on the backpackers’ tax, another fiasco of the government’s making. And he has been forced ­to make one concession on super in relation to non-recourse loans backed by non-concessional ­contributions.

Then there was Labor’s ­response to the government’s super changes. No doubt opposition Treasury spokesman Chris Bowen was blown away by the scale and daring of the changes; it made his proposals look modest by comparison. Labor simply was proposing to impose the 30 per cent contributions tax under Division 293 on those with (adjusted) incomes of $250,000 a year or more rather than the present $300,000 a year or more and to levy a 15 per cent tax on super retirement income streams above $75,000 a year.

Had the two parties been playing bridge, the Liberal Party then effectively bid seven no-trumps. It matched the changes to Division 293; it set a maximum superannuation balance of $1.6 million from which tax-free income could be sourced, never to be topped up; it reduced the annual concessional contributions cap to $25,000 a year; it introduced a lifetime concessional contributions cap of $500,000 backdated to July 1, 2007; and it imposed a 15 per cent tax on transition-to-retirement ­income streams.

Bowen must have thought he was dreaming. He would never have dared to go this far lest he be accused of blowing up the superannuation system, particularly in terms of its role as a substitute, in part or in full, for the age pension.

But what the heck, Labor was happy to go along for the ride. And in the final week of the campaign Labor effectively declared that it would adopt the Liberals’ super­annuation policy with the one ­exception of the retrospective ­element of the non-concessional contributions cap. While details were vague, it took on board the full budget savings.

This last-minute switch of policy by Labor, which never would have occurred were it not for Morrison’s budget announcements, doubtless caused some extremely reluctant Liberal Party supporters to hold their noses and vote for Liberals in the lower house. The Senate, of course, was a different story. Labor also played dead in many of the most affected electorates — for example, Higgins, Kooyong, Goldstein, North Sydney.

Assuming that the Coalition is returned to power, there is no choice but for the government to fully reconsider the superannuation changes. The best outcome would be to ditch all of them for now and go about systemically ­assessing the much smaller number of changes that can be justified in the name of good public policy, seek a mandate from the electorate at the next election, then implement the changes. Only in this way can the Liberal Party hope to re-engage with its base.

It was never just about superannuation; it was a matter of trust.

Superannuation: Coalition’s changes undo the trust

The Australian – July 13, 2016

Glenda Korporaal – Associate Editor (Business) Sydney

Chances are the Turnbull government will get most of its May budget proposed changes to super implemented.

Its problem has never been support from the Labor Opposition, which would never have dared to propose such drastic changes to the system itself, and is more than happy to see the government continue to support its own low income super tax offset.

The real problem has always been with the Liberals’ own constituency which is the one hit hardest by the proposed changes.

It does seem that the Coalition leaders, particularly Malcolm Turnbull and Scott Morrison, will press to keep as much of the budget super package as possible — mainly from a revenue point of view.

Labor’s super spokesman Jim Chalmers, who is calling for an independent evaluation of the proposed super changes, argues there is “serious internal dissent” over the proposed changes, pointing out that “people’s retirement savings shouldn’t be messed with on a whim”.

Once the government has sorted its leadership out, the super industry is gearing up to have consultations on the proposed changes to ease back some of the most drastic changes — particularly the proposed cut in the concessional superannuation caps to $25,000 a year and the $500,000 lifetime cap on post-tax contributions backdated to July 1, 2007, which came into force on budget night.

The implementation of the package is going to have major implications for the super industry itself as it comes to terms with how to process the changes.

Confidence in the system is low, particularly among people who are or have been putting extra into super above the mandatory super guarantee requirements.

The industry and people with a sizeable interest in super have been in limbo since the May budget and can be expected to remain so until the actual legislation is passed in the Senate sometime later this year.

The big question will be how to restore long-term confidence in the system, particularly among the aspirational middle classes who have spent their working lifetime seeing super as a way to plan for a self-funded retirement with no reliance on the pension. Turnbull and Morrison have cynically hacked back on the super tax concessions to generate revenue to fund their proposed corporate tax cuts to help sell their much parroted mantra of “jobs and growth”.

The proposed changes were not the result of a detailed, thoughtful review of the super system but an overnight election eve attempt to claw back more revenue on the basis that those most affected would be rusted on conservative voters who had nowhere else to go.

They were “justified” by implying that people who were using the super system boosted by the Howard/Costello government to fund their retirement were evil rich people rorting the system when they were just following the law.

It was a bizarre political strategy, to say the least, which sought to attack those who had taken advantage of the Howard/Costello changes and made no attempt to spell out a long-term vision for super.

Few would argue that the tax concessions were very generous at the top end and arrangements like transition to retirement had evolved primarily into tax reduction exercises.

Reform of the tax concessions on super was always expected to be part of the tax white paper discussion.

The question is: what is the future of super under a Turnbull-led Liberal National government? Or does it even care? The Turnbull government must have a proper internal discussion about where it wants to go with super and whether it believes in the system at all above the basic super guarantee requirements.

Clearly the old curbs on governments going back on their election promises (in this case the promises made in the 2013 election) and not introducing retrospective policies have not worried the Turnbull/Morrison team despite the massive erosion in trust that logically follows.

That trust has now been lost, paving the way for “Mediscare” and who knows what other scare campaigns Labor and other government opponents will come up with in future.

Does the new government actually care enough about super to try to restore some confidence in the system, or will it continue to see super as a cash cow to be plundered for further budgets?

Does it care enough about super that it is up to assuring the public that there will be no changes after these changes for a guaranteed period of time? Probably not.

The next year will see a major rethink of investment strategies by the Australian aspirational middle class, which now realises that when it comes to super governments can’t be trusted over the long term. Good luck with the partyroom talks, but the horse has bolted. Trust has gone. What actually happens over the next few months — and not government spin — will be pivotal for the system’s future.

Federal election 2016: Turnbull should cop it on the chin

The Australian July 13, 2016

Judith Sloan – Contributing Economics Editor Melbourne

It’s hardly surprising that Bill Shorten has agreed to pass most of the government’s budget changes to superannuation, subject to an independent review that assesses whether some of them are retrospective.

I have sitting on my desk an opinion — well, it’s actually ­gobbledygook — of a QC commissioned by Assistant Treasurer Kelly O’Dwyer concluding that none of the changes — even the backdated lifetime cap on non-concessional contributions — is retrospective.

Pull the other one, I say. Even Scott Morrison is aware of the duck rule: looks like a duck, quacks like a duck, is a duck. Earlier this year he described Labor’s proposal to impose a 15 per cent tax on superannuation pension earnings above $75,000 a year as retrospective.

To quote the Treasurer: “Our opponents stated policy is to tax superannuation earnings in the ­retirement phase. It may not be technical retrospectivity but it ­certainly feels that way. It is effective retrospectivity, the tax technicians and superannuation tax technicians may say differently. But when you just look at it, that is the great risk.”

Of course the Opposition Leader’s current offer to pass most of the government’s super changes has the effect of making life even more difficult for the Prime Minister as he seeks to appease many of his parliamentary colleagues as well as swathes of the party’s base.

Not that Assistant Minister to the Treasurer Alex Hawke has helped the situation by claiming that “changes to high-end superannuation are broadly accepted by all sections of the community and the government was right to propose them”.

Tell that to the large numbers of the party’s previously loyal supporters. Given the flood of complaints that the party has fielded, the tsunami of resignations, the drying up of donations, the shortage of volunteers and the loss of votes (over one million, in total), Hawke’s chutzpah is quite ­astounding.

So what should Malcolm Turnbull do?

Here are the key super changes he must agree to:

  • Forget about backdating the lifetime cap to non-concessional contributions;
  • Make this cap $1 million, up from $500,000;
  • Raise the superannuation balance from which tax-free ­pensions can be drawn from $1.6m to $2.5m, the latter of which would be the figure if the old Reasonable Benefit Limit had been retained;
  • Keep the concessional contributions caps where they are;
  • Forget about increasing the tax on those on Transition to ­Retirement Income Streams. TRIS are now only useful for those on modest incomes and with the increase in the preservation age, this arrangement will become ­irrelevant over time;
  • Don’t bother with topping up the superannuation balances of those on low incomes, who will mainly end up on the full Age ­Pension. It is costly to do this. It is also fair that these people make a modest contribution to the cost of their Age Pension.
  • When the Liberal parliamentary party meets again, those members who are concerned about the government’s fundamental breach of trust on superannuation must extract these changes, at a minimum, from the small coterie of ministers who dreamt up this heist in the first place.

Turnbull may just have to suck it up, just in the same way he ­expected present and future ­superannuants to take the ­additional tax imposts on the chin.

And just in case he mentions the contribution super must make to budget repair, remind him of the billions of dollars that he committed to wasteful pork-barrelling during the election campaign. That worked well … not.

And don’t forget to mention that Treasury’s estimates of the savings/additional revenue from the super changes are laughable. An additional $6 billion over the forward estimates — tell ’im he’s dreaming.

Scott Morrison urged to keep superannuation changes

The Australian

4 July 2016 12.00am

Andrew White

Associate Editor
Sydney

Treasurer Scott Morrison has been urged to stay the course on controversial changes to superannuation in the pre-election budget amid pressure from the Coalition partyroom to ditch a measure that helped fund its signature corporate tax cuts.

Peter Collins, the former NSW treasurer and opposition leader, said the Coalition had already paid the price for the proposed changes and would set back the job of budget repair by abandoning the changes after the result.

Mr Collins, who chairs the not-for-profit superannuation fund peak body Industry Super Australia, said it was unlikely the proposals to reduce concessional and non-concessional contributions caps and tax earnings on funds with more than $1.6 million of assets in the pension phase were a significant factor in the election result.

And any impact would have been countered by the Labor Party’s proposal to restrict negative gearing and capital gains tax concessions on residential property.

The government faced a storm of protest from sections of the retirement savings industry over the changes, which ended the tax-free status of super fund earnings introduced by Peter Costello in 2007.

Opponents argued the changes were retrospective because they applied a new $500,000 lifetime cap on after-tax superannuation contributions that was backdated to 2007 and reduced the tax-effectiveness of assets above $1.6m in an individual fund.

Setting those new caps was expected to hit middle-aged, middle-income earners hardest because it was typically in the last years of their working lives that people emerged from the burdens of paying the mortgage and schooling their children and could afford significant salary sacrifices and post-tax contributions to super to self-fund their retirement

The changes, estimated to generate $2.9 billion for the budget, as well a $3.9bn crackdown on corporate tax avoidance, were designed to fund a lowering of the corporate tax rate from 30 per cent to 25 per cent over the next decade.

Labor adopted the Coalition’s budget savings in the final days of the campaign and has its own proposal that allows up to $2.5m in a fund and taxes earnings above $75,000 at 15 per cent.

The changes were not strongly opposed by heavyweight bodies, including the Financial Services Council, which represents the wealth arms of the major banks as well as institutions including Perpetual, AMP and BT Investment management.

Mr Collins echoed support for the changes from superannuation bodies that had labelled the Costello-era changes as “unfair and unsustainable’’, and said Mr Morrison would make his budget repair job harder if he ditched his changes.

“For any high net worth individual the budget changes to superannuation caps would have been more than outweighed by the impact of the Labor’s negative gearing changes,’’ Mr Collins said.

“While unpalatable to the wealthy, they cancelled each other out.’’

Mr Collins, a former treasurer in Nick Greiner’s NSW government, experienced an election in 1991 that resulted in a hung parliament that eventually saw the Coalition turfed out in 1995.

He said he did not think the super proposals had a major impact on the election, saying the length of the campaign and the dramatic improvement in Opposition Leader Bill Shorten’s campaigning were bigger factors in wiping out the Coalition’s 30-seat majority from the 2013 election.

The Self Managed Super Funds Association said it was looking forward to working with the government on its budget proposals, including the new contributions caps, and highlighting the role of super in building national prosperity.

Super funds face a list of potential major changes beyond the budget proposals, with Assistant Treasurer Kelly O’Dwyer bringing forward a review of the default fund system and seeking changes to the governance of industry funds.

With backing from the FSC, Ms O’Dwyer is seeking changes that would make it easier for retail funds to attract new members by removing or diluting the role of the Fair Work Commission in deciding which funds could be included in industrial agreements.

The current two-stage process is seen as favouring industry funds because their lower fees improve returns to members — one of the key selection criteria for the funds — and because only recognised employer and employee groups can advocate for those funds before the commission.

Mr Collins said only measures that would improve the returns to members should be advanced.

Industry funds are also sitting on a review of their governance arrangements by former Reserve Bank governor Bernie Fraser that was commissioned in exchange for support of Senate crossbenchers in opposing government moves that would have required industry funds to appoint a majority of independent directors to the board. Industry funds claim equal representation is a key factor in their continued outperformance.

Federal election 2016: Greens candidate Alex Bhathal within a whisker in Batman

Richard Willingham

State Political Correspondent for The Age

July 3, 2016 – 12:30AM

The Greens were trailing by the smallest of margins in their bid to win an historic second inner city seat, with the northern Melbourne seat of Batman sitting on a knife edge.

Late on Saturday night, the result was too close to call in the seat that was once Labor’s safest seat in the country.

Serial Greens candidate Alex Bhathal was within a whisker of seizing Batman from Labor frontbencher David Feeney after a mammoth campaign effort and a big advertising spend.
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Mr Feeney’s own campaign was dogged by gaffes and controversy after Fairfax revealed the incumbent did not live in his electorate, while also not declaring a $2.3 million property in Northcote.

Despite all of this Mr Feeney had 50.34 per cent of the two party preferred vote after nearly 70 per cent of Batman ballots had been tallied.
David Feeney says Labor remains very confident he will retain Batman.

Ms Bhathal said the seat, the most progressive in Australia, deserved progressive representation and that she hoped for good news “in the coming hours”.

As widely tipped the Greens’ sole incumbent Adam Bandt was returned to Parliament for a third time, increasing his margin in Melbourne.

In neighbouring Wills, the Greens also gave first time Labor candidate, and former adviser to prime minister Kevin Rudd, Peter Khalil a push through candidate Samantha Ratnam.

Mr Khalil however looked destined for Canberra.

The main focus for the Greens on Saturday night at a packed Forum Theatre in the city was on Batman, which stretches from Clifton Hill in the south to Bundoora and Thomastown in the north.

Labor had been nervous about Batman since the start of the campaign and were facing a cashed-up party that was only focusing on a handful of seats rather than a statewide battle.

The Greens have been building in Batman and Wills for some time due to a change in the demographics, with more well-off professionals buying up homes in areas that were once the home of working class and migrant Labor-voting families.

At one time Batman was Labor’s safest seat in Australia and was the electorate held by stalwart Martin Ferguson.

The inner city battles between Labor and Greens, and Liberals and Greens in Higgins, have been hit by dirty politics with former state minister Peter Batchelor caught ripping down Greens posters at a Clifton Hill primary school and Labor operatives arrested for vandalism in Melbourne Ports.

In Higgins the Greens have made a bold bid to unseat Assistant Treasurer Kelly O’Dwyer in area that has been blue-ribbon Liberal territory.

Ms O’Dwyer was set to win the seat, with the Greens’ Jason Ball enjoying a 10 per cent swing.

That campaign also turned nasty, with police investigating the alleged biting of a Greens volunteer by a backer of Ms O’Dwyer.

South of the Yarra in Melbourne Ports the Greens were part of a three-way tussle with veteran Labor Michael Danby and the Liberals’ Owen Guest. The Greens’ Stephanie Hodgins-May was in third place with 25.7 per cent of the primary vote, Mr Danby with 27.6 per cent and the Liberals 40 per cent at 9.30pm.

Before polls closed Greens Leader Richard Di Natale said he expected swings in inner-city seats.

“What you will see is these seats turn Green, if not at this election, then the next one,” Senator Di Natale said on ABC TV.

The Greens had launched an unprecedented campaign in Victoria for lower house seats, with an advertising campaign budget that appeared to rival the major parties.

The party took the rare step of advertising for individual seats: Higgins and Batman, in metropolitan wide press, including on the front page of Thursday’s The Age for Ms Bhathal in Batman.

And up until the media blackout TV commercials were screened in prime time for both Ms Bhathal in Batman and Mr Ball in Higgins.

Despite Senator Di Natale declaring before the election the party did not do polling, two Greens-commissioned polls were given to the media, which showed them in front in Batman and making ground in Higgins.

Australian federal election 2016: Worst kind of victory looms for Turnbull

July 2, 2016 – 10:49PM

Michael Gordon

Political editor, The Age

Malcolm Turnbull is facing the prospect of the worst kind of win, where the Coalition is returned with the most seats, but his authority is weakened, his internal critics are emboldened and his agenda is imperilled.

Turnbull’s warning that a protest vote would produce the chaos of a hung parliament has not deterred voters around the country from acting on their disappointment in what the Coalition has delivered since 2013.

He wanted the numbers to deliver strong, stable government and banked all on his economic plan built on company tax cuts. The best he can hope for is a wafer-thin majority and a toxic Senate: a recipe for instability if ever there was one.

The industrial legislation that was the basis for this double dissolution is now so in doubt that the joint sitting of Parliament that was intended to pass it is no certainty. Also in doubt is the prospect of Turnbull’s tax-cut legislation being passed without amendment.

Expect those Liberal MPs who supported Tony Abbott and refrained from criticising Turnbull’s campaign to be less constrained now. Turnbull will be criticised for not campaigning hard enough on security and not fighting more resolutely for the budget savings that were blocked in the Senate.

All eyes will be on the former leader, who has already made plain that he would have run a very different campaign. How will he respond?

Bill Shorten, who maintained he was never interested in an honourable defeat, is poised to achieve one, having pushed Turnbull to the brink and defied those who never considered him a serious contender.

Most of the speculation pre-election was that Shorten would be the one whose position would be under threat after the count. Now, he is in a stronger position within his party than Turnbull is in his.

Back in February, senior ALP figures were contemplating the prospect of having to remove Shorten before the election, such was Turnbull’s ascendancy. Shorten’s response was to take risks by laying out an ambitious program, to communicate with more clarity and verve and to campaign like there was no tomorrow.

Now he has earned the opportunity to build on his success, with the expectation that he will lead Labor into the next campaign.

If, as seems likely, Labor wins more seats than the national swing would suggest, this will also be an endorsement of the Labor campaign, including what many considered the overblown claims of the threat posed by the Coalition to Medicare.

The big story, aside from the Labor resurgence, is the move to minor parties and independents, reflecting the disillusionment of voters with the major parties and the established institutions.

The big story within the protest vote is a rebellion against the Coalition’s superannuation changes, which many Liberal voters saw as both a breach of faith and contrary to the principle that retrospective changes should not be introduced.

While Turnbull insists the changes were not retrospective and only affected the most wealthy Australians, he can expect to face white anger from MPs at his first partyroom meeting, post-election.

When the campaign began I wrote that the political dangers for the Coalition were twofold: that those very rich Liberals whose votes had been taken for granted would either vote Labor or withdraw their financial support because they felt they had been betrayed; and that others would become more wary of voting Coalition because they saw the Coalition as more likely to meddle with super in the future.

The Institute of Public Affairs’ John Roskam was confident that Turnbull would change the policy rather than face repudiation at the ballot box.

He was wrong but, as Peta Credlin noted on Sky News, many Liberals enraged by this issue took out their anger on the ballot box. Those who could not bring themselves to vote Labor parked their votes with the minor parties and independents.

How this pans out depends on many variables, with many battles conducted within the main event, and some history being made along the way, like Labor’s Linda Burney becoming the first Aboriginal woman to be elected to the House of Representatives.

Tasmania has gone with Labor; Shorten is set for big gains in New South Wales, Victoria is unlikely to change and could yet produce a Liberal gain; Nick Xenophon’s party has made its mark in South Australia; and the picture is mixed in Queensland and unclear in Western Australia.

Shorten needed absolutely everything to go right to have any prospect of winning the 19 seats to form government in his own right. The unknown is what difference it would have made if he had not promised higher budget deficits over the forward estimates to pay for his promises on health and education.

The impact of the Andrews’ government’s appalling handling of the CFA dispute will also come under scrutiny when Labor strategists ponder what might have been.

Australian federal election 2016: Malcolm Turnbull faces superannuation backlash as postmortem begins

The Sunday Age

Michael Gordan

3 July 2016 12.46pm

Malcolm Turnbull is coming under massive pressure from within to recast the superannuation changes he took to the election amid widespread anger and despair in Liberal ranks over his election campaign.

My phone hasn’t stopped ringing this morning from people saying it serves them right.

Save Our Super campaign spokesman Jack Hammond.

“It’s now more obvious than ever that changes have to be made,” declared John Roskam, the executive director of the Institute of Public Affairs, who predicted early in the campaign that Mr Turnbull would soften the policy rather than suffer a backlash.

Mr Turnbull resisted the pressure, insisting that the changes only affected the most wealthy Australians and were not retrospective, as critics asserted.

“It was simply diabolical for the Liberal Party to be proposing higher taxes on people who save and work hard,” Mr Roskam told Fairfax Media.

A strong Liberal Party supporter, Mr Roskam said the superannuation debate had now morphed into a much bigger discussion about “why the Coalition was proposing higher taxes and more government spending” during the campaign.

“If you have two parties who are proposing higher taxes and higher spending, it’s most likely that people are going to vote for the party that genuinely believes in higher taxes and higher spending.”

Opponents of the Coalition’s superannuation changes insist they changed votes, reduced donations to the Coalition and diminished the Liberal Party turn-out at polling booths.

“Who knows how and why people voted, but it is certainly a view among many people that it had a major impact and that is attested to by the exit polling,” Mr Roskam told Fairfax Media.

“The debate on superannuation was reignited at 10 o’clock last night when I started getting texts and calls while I was sitting on the couch watching TV. It’s about the policy, it’s about the messaging, it’s about how was this allowed to happen, and now how do they fix it?”

Tasmanian Senator Eric Abetz, who lost his cabinet position when Mr Turnbull replaced Tony Abbott as prime minister, agreed, saying: “The issue of superannuation is very dear to the core base of the Liberal Party.

“To have the certainty of that being compromised did send shock waves through that sector of the community that are our core supporters.” Another MP who declined to be named said the issue “really hurt the Liberal party base”.

The spokesman for the Melbourne-based Save Our Super campaign, Jack Hammond, says he was not surprised that the Coalition suffered losses after proposing changes he maintains were unfair and penalised those who had acted in good faith.

“My phone hasn’t stopped ringing this morning from people saying it serves them right,” Mr Hammond said.

Australian election 2016: Malcolm Turnbull says Coalition can form majority despite dramatic losses

The Guardian

Sunday 3 June 2016 01:16am

Gabrielle Chan

  • Coalition loses at least 11 seats in Australian election but expects to hang on to power
  • Final result won’t be known until Tuesday
  • Conservatives criticise PM over campaign and key policies

Malcolm Turnbull’s Coalition has been pushed to the brink in a shock election result which saw the Liberal party lose at least 11 seats, with 30% of the vote still left to be counted.

At a speech given after midnight, the prime minister claimed the Liberal and National parties would form a Coalition majority government even though he had been advised the result would not become clear until at least Tuesday.

“Based on the advice I have from the party officials, we can have every confidence that we will form a Coalition majority government in the next parliament,” he said.

On a two-party-preferred basis, Labor was leading the Coalition on 50.06% to 49.94% on a two party preferred basis at time of publication.

The prime minister left supporters and talk shows waiting late into the night for his speech as it became clear there would be no definitive result. It was 12.30am when Turnbull finally appeared.

Turnbull accused the Labor party of running “some of the most systematic, well-funded lies ever peddled in Australia” in a campaign in which Labor claimed the Coalition was planning to privatise the government funded health insurance system, Medicare.

Turnbull questioned whether there would be a police investigation over the Labor campaign and he accused Labor of sending texts to voters claiming the Coalition would sell Medicare.

After a marathon eight-week campaign, the Liberal party has lost 11 seats to Labor, including Bass, Braddon, Lindsay, Lyons, Macquarie, Eden Monaro, Longman, Macarthur, Herbert, Burt and Solomon.

Labor has lost the seat of Chisholm to the Liberal party. The National’s Damien Drum took Murray from the Liberals following the retirement of Sharman Stone.

While the make up of the Senate remains unclear, Rebekha Sharkie of the independent senator Nick Xenophon’s new party has won the seat of Mayo from the former Liberal minister Jamie Briggs, who was also her former employer.

Seats too close to call at time of publication include Cowan, Capricornia, Batman, Flynn, Hindmarsh and Forde.

The result places Turnbull under extraordinary pressure from the conservative end of his party and even before he was sighted in public, conservative members of his party were flagging changes to key policies like superannuation.

A triumphant Bill Shorten arrived at the Moonee Valley racing club in Melbourne just after 11pm on Saturday, claiming Labor was back and the Liberal party had lost his mandate.

“We will not know the outcome of this election tonight,” Shorten said. “Indeed, we may not know it for some days to come. But there is one thing for sure – the Labor party is back.”

He added: “Three years after the Liberals came to power in a landslide, they have lost their mandate.”

Shorten said the result was a clear rejection of Turnbull’s “ideological agenda” and Turnbull could no longer claim he could deliver stability.

He listed the Labor “mandate”, including Medicare policy, penalty rates, National Broadband Network and Gonski education policy.

Senior Liberals were fuming at Labor’s Medicare campaign in the final two weeks of the campaign, with the treasurer, Scott Morrison, the deputy Liberal leader, Julie Bishop, and Eric Abetz all blaming the Labor campaign for the seat loss.

But they were also forced to defend the Liberal campaign and the leadership change from Tony Abbott to Turnbull in September last year. Asked whether the leadership change made a difference, Morrison said: “Look, that is a matter we will never know.”

He added: “I think it’s highly unlikely. I think the party room made its own judgment last September.”

Bishop defended the Liberal party’s strategy as a positive campaign “of integrity”.

Asked about the effect of the change of leadership, Abetz, one of Abbott’s key supporters, said: “suffice to say a change was made for better or for worse, we move on and we’ve got to ensure Malcolm Turnbull is returned as prime minister for the sake of the nation.”

But Abetz committed to take the Coalition’s superannuation plan to the party room after the election, blaming the policy for a “haemorrhage” of votes.

“The emails coming into my office were very strident in their criticism, there was the view there was retrospectivity, there was the view they had worked hard, saved hard and doorknocking was also recurring theme,” he said.

“Regrettably some wanted to punish us for that and we did fight very hard saying be careful you don’t jump out of the frying into the fire. I fear some of them may have done that and regrettably we did haemorrhage some votes in that area as well.”

Abetz said he would move in the party room to change the superannuation policy. “I for one would be advocating we reconsider some aspects of it,” he said. “Clearly it has hurt our core constituency, those people who had scrimped and saved indeed.

“I think we do need to look at it to make sure it is fair, it is targeted and we don’t scare people away from saving and looking after themselves into the future.”

The deputy prime minister, Barnaby Joyce, held off a challenge from former independent Tony Windsor, as did the National MP for Cowper, Luke Hartsuyker, from the former independent Rob Oakeshott.

The Australian Electoral Commission estimated 10 million Australians attended 7000 polling booths to vote. The electoral commissioner, Tom Rogers, apologised for unusually long waits at polling places.

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Rogers said changes to the Senate voting rules were “the most significant changes to voting in 30 years”.

“This, in combination with record nominations in some seats, appears to have resulted in voters taking greater care and more time to cast their vote,” he said.

As the result unfolded, from the first votes counted, Tasmanian seats held by Liberals showed swings towards Labor, including with Bass, Braddon and Lyons.

Morrison, on the ABC’s election panel, was visibly angry at the result – describing it as a “campaign about fright”.

“I don’t know what is more audacious, the size of the lie that has been told or the boasting on the back of it,” he said.

“We know they told the lie, they got exposed on the lie yet they continued to back it in with the phone calls and the mail and the little cards and the whispers at the booths and all of these sorts of things.

“This was the Labor party’s campaign. It wasn’t a campaign about growing the economy, it was a campaign about fright.”

Sex Party, Greens target Liberals unhappy over superannuation taxes

The Australian Financial Review

Jun 30 2016 at 6:03 PM

Minister for small business and Assistant Treasurer Kelly O’Dwyer is feeling the heat from “Save Our Super” campaigners …

by Sally Rose

A backlash among Liberal Party supporters upset about a crackdown on superannuation tax breaks could help minor parties pick up Senate votes.

A slew of longstanding Liberal Party supporters have withdrawn their fundraising efforts, and some have even quit their party membership, in protest over a controversial reductions in super tax breaks for the wealthy was unveiled by the government in May’s federal budget.

The Australian Sex Party is the latest micro-party to appeal to disaffected Liberal Party members and voters.

“We would vote against the change to introduce a lifetime limit of $500,000 for non-concessional super contributions,” the Sex Party’s lead Senate candidate for Victoria, Meredith Doig, said.

“We do not support retrospective changes to super taxes that are unfair to those who saved under the existing rules.”

The Sex Party would seek to lift the new $1.6 million limit on retirement account balances rather than block it entirely.

“It is reasonable to impose some sort of limit on the amount of super the ultra wealthy can drawn down tax free in retirement, but we would push to have than limit raised to $2 million,” Ms Doig said.

Liberal Democrat Senator David Leyonhjelm has seen a spike in supporters angry at the government’s plans to crimp super tax breaks for the wealthy.

The Liberal Democratic Party and the Jacqui Lambie Network are two parties that have campaigned hard on a promise to block the superannuation changes.

After the May budget LDP Senator David Leyonhjelm held breakfast forums in Sydney, Melbourne, and Brisbane attacking the crackdown. He said they “contributed significantly” to his party raising $700,000 for its campaign.

“Some Liberal Party members have even hosted fundraisers for us,” Senator Leyonhjelm said.

“Many traditional Liberal party supporters have told us they will vote for us in the Senate this election due to the super issue.”

Senator Lambie has stuck doggedly to a slogan of “hands off our super”, while pledging to use any power in the Senate to vote against the changes.

Assistant Treasurer Kelly O’Dwyer, who holds the traditionally blue-ribbon seat of Higgins in Victoria, is one Liberal MP who has been under intense pressure from constituents angered by the government’s unexpected super policy.

John McMurrick, a longstanding member of the Higgins 200 Club, the main fundraising network for Ms O’Dwyer, has quit and thrown his support behind protest group Save Our Super.

Mr McMurrick, who had been actively involved in fundraising for the Liberal Party for nearly 20 years, also quit his party membership after nearly 30 years “in disgust” over the budget changes. Mr McMurrick is a semi-retired businessman turned Hollywood film producer.

Save Our Super was founded by longtime Liberal voter Jack Hammond SC, a semi-retired lawyer. The network last week held a gathering at the Malvern Town Hall attended by roughly 250 local superannuants.

Mr Hammond said it was “arrogant” of the government to assume its supporters would stick by it despite the attack on high super balances and tipped a spike in protest votes in the Senate.

“Labor is no better as an alternative,” he said.

Over the weekend the Labor Party said it would take its time in considering whether or not to adopt the government’s super changes if elected.

“We will implement those measures which turn out to be workable and fair but propose alternative measures if necessary to ensure there is no detrimental impact on the budget,” Labor spokesman for superannuation Jim Chalmers said.

The Greens, which as the largest minor party stands to gain the most from protest votes, has pointedly refused to back the changes despite them being philosophically consistent with their own stated policy “to end unfair tax breaks”.

“We’ll see what the Liberals end up proposing to Parliament after the election. We won’t be at all surprised if they wilt under the campaign from the Institute of Public Affairs or internal dissent about their proposed changes to super,” Greens Treasury spokesman Senator Adam Bandt said.

Ms O’Dwyer cautioned those considering casting a protest vote that it could lead to “another disastrous alliance” between the Greens and Labor.

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