Category: Save Our Super Articles

Why I formed Save Our Super

Initially, I viewed, through the narrow prism of my own self-interest, some of the Government’s and Opposition’s proposed changes to the superannuation system. I, and many people like me, will shortly retire and rely, in our retirement almost entirely, if not exclusively, on our superannuation savings built up over many years.

However, my self-interest was quickly overwhelmed by a deep feeling of anger and dismay at what I saw as a breach of trust by the Government.

Over many years, we did what the Government wanted and encouraged us to do with our superannuation savings. We accepted and complied with the superannuation rules which the Government made. We put our savings into superannuation in preference to many other choices which were open to us.

Now the Government, without any notice or consultation with us, proposes to penalise us for the decisions we made at their behest.

On any view, that is manifestly unfair and unreasonable.  

I discovered that I was not alone in that feeling. It caused me to form Save Our Super in May 2016. I’ve since discovered that the feeling I felt is uniformly felt by others affected by the proposed Government changes.

It has cost me time, money and lack of sleep to establish Save Our Super. I could have simply shrugged my shoulders and accepted the proposed changes. I could have simply sought good professional advice, paid for it and then gone quietly into retirement, enjoying my other interests and more time with our children and grandchildren. However, the Government’s breach of trust was too important to ignore.

Millions of working Australians are effectively compelled by the Compulsory Superannuation Scheme to put their hard-earned savings into the Government-mandated superannuation system.

They trust, as they must, that every Government of the day will treat them reasonably and fairly when changes are to be made to the Australian superannuation system.

They trust, as they must, that when the Government says, as Scott Morrison said in May 2015, “[t]he 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 those promises will be kept and honoured. That their compulsory superannuation savings, whatever the amount, will be respected, and not be subject to the possibility of being depleted by deliberate government action.  

But they, unlike me and some others like me, unfortunately do not have the knowledge, skills, time, contacts, influence, and resources to do anything about it if a government breaches their trust.

We do.

I, and some people like me, want to ensure that some of the proposed superannuation changes are grandfathered, if those changes significantly affect Australians who, encouraged by  government, have relied on, and acted on the then rules of the day. Australians should not be penalised for having so acted, when a government wants to change the rules later.

That is our modest goal. But that goal, if achieved, will create a precedent which will benefit millions of working Australians, now and in the future. Not only me and people like me.


Jack Hammond QC

Melbourne, 13 June 2016

Save Our Super

Save Our Super is an apolitical community-based group which makes the public aware of the implications of the Coalition’s superannuation legislation and Labor’s superannuation policies.

Some of our supporters vote Liberal/National; some vote Labor; others vote for other parties or independents. But we are united in Our Call For Action by the Federal Parliament.

Grandfathering Justified In Proposed Legislation

The historic use of grandfathering to protect those who were significantly affected by major superannuation rule changes, justifies its use in the proposed legislation.

Unfair and unreasonable

It is manifestly unfair and unreasonable to individuals who now, or will, rely on their superannuation savings for a retirement income under the then existing rules to make new rules which significantly affects them.

Therefore, appropriate grandfathering provisions need to be put in place to protect all significantly affected Australians.

Undermines trust

A Government’s right to govern is based upon the bond of trust between the people and their Government. Trust is the currency of Government. When, by a breach of trust, a Government debases that currency, the people lose confidence in their Government.

And so it is when Governments make major rule changes to an existing superannuation system. If they do not provide appropriate grandfathering provisions, Australians will lose faith in the superannuation system.

Those who will lose faith include the millions of Australians who are effectively compelled by the Australian Compulsory Superannuation Scheme to place their trust in the Government.

Furthermore, those who are yet to enter the superannuation system need to be assured, before they commit their savings to the superannuation system, that they can trust Governments to always treat them fairly and reasonably.

Superannuation – A Long Term Savings Plan Under Threat

Australians’ investment in superannuation is an almost life-long savings plan. It starts from the first superannuation contribution and lasts until the final pension payment.

In 1991, the Superannuation Guarantee levy was imposed. Australian’s participation in superannuation has accelerated from about 30% of employed persons to over 90% today.

Since the 1980s, Australia’s accumulated superannuation savings have risen from an amount equivalent to about 30% of GDP to about 120% of GDP today.

Over time, if more Australians contribute more super funds for longer proportions of their working lives at higher rates, average superannuation balances at retirement should continue to rise.

However, that growth is threatened by the Coalition’s superannuation legislation and because appropriate grandfathering provisions are not included in that legislation.

Opposition’s superannuation policies which should be grandfathered

Labor dumped their election superannuation policies and made an increased tax grab on 26 June 2016 despite saying, just over a year ago, “If elected, these are the final and only changes Labor will make to the tax treatment of superannuation”. Labor has not announced any replacement superannuation policies.

Budget 2016 superannuation proposals which should be grandfathered

As from 15 September 2016, the current Budget 2016 superannuation proposals include:

  • the introduction of a transfer balance cap of $1.6 million on amounts into the tax-free retirement (pension) phase from 1 July 2017.
  • after commencement, if individuals already in retirement as at 1 July 2017 retain balances in excess of the $1.6 million cap and do not transfer the excess out of the retirement phase account, a similar tax treatment that applies to excess non-concessional contributions will be applied to that excess at the top marginal rate of tax (ie 49% for the 2014 to 2016 income years);
  • introduction of commensurate measures to defined benefit arrangements;
  • removal of the tax exemption on earnings which support Transition to Retirement Income (pension) streams.

On 15 September 2016 the Government abandoned the following proposal:

  • establishment from 3 May 2016 of a life-time non-concessional contributions cap of $500,000 on all non-concessional contributions made since 1 July 2007.

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