We remind Scott Morrison of his broken “tax-free super” promises

Email dated 16 July 2016 from Save Our Super to Treasurer Scott Morrison in lead up to the Liberal Federal Parliamentary Party meeting to be held on Monday 18 July 2016:

Dear Mr Morrison,

I write to you in your capacity as the Treasurer in the second Turnbull L/NP Coalition Government.

This email relates to the superannuation issue. Therefore, if possible, would you please read it before the Liberal Federal Parliamentary Party meeting to be held in Parliament House, Canberra next Monday 18 July 2016. It may go a long way to explain the anger and dismay felt by many Liberal Party/National Party members and conservative supporters of the L/NP Coalition. I am one of many.

I am a Melbourne QC. I live in Kelly O’Dwyer’s electorate of Higgins in Victoria.

Also, I am the founder of Save Our Super; see: http://saveoursuper.org.au . A brief biography of my background can be found on that website under “Our People”.

Save Our Super is an organisation I formed as a consequence of the Government’s current superannuation policies. Those policies were announced by you on 3 May 2016, when you delivered Budget 2016 on behalf of the first Turnbull L/NP Coalition Government.

It is no understatement to say that those policies were sprung on the Australian public without notice or any real consultation. They were not “evidence-based” public policies by any reasonable use of that term.

Moreover, they were, and remain, in direct contradiction to that which you had told the Australian public on many occasions prior to you delivering Budget 2016.

You made at least 12 “tax-free superannuation” promises in May-June 2015, and in your Address on 18 February 2016 to the Self-Managed Superannuation Funds National Conference in Adelaide. You gave that Address less than three months before you delivered Budget 2016 on behalf of the L/NP Coalition Government.

We have posted them on Save Our Super’s website; (see under the tab “Scott Morrison’s tax-free super” for the source; and see under the category  “Quotes” for the full Address and source).

I have set them out below for your convenience.

You are the one most likely to be accepted by the Governor-General as the Treasurer in the second L/NP Coalition Turnbull Government in about a week’s time.

We believe you should be reminded of your broken promises, at least for the purpose of the forthcoming Liberal Federal Parliamentary Party meeting to be held in Parliament House, Canberra next Monday 18 July 2016.

Scott Morrison’s 12 tax-free superannuation promises : May to June 2015

3AW – 19 June 2015

MINISTER MORRISON: Well we do want to encourage everyone … to be saving for their retirement and particularly when you are drawing down on that when you are retired we don’t want to tax you like Chris Bowen does.

2GB – 25 May 2015

My own view is that the superannuation system, for example, meant I don’t want to tax people more when they’re basically investing for their own future… That’s why I think Chris Bowen’s idea, …of …taxing superannuation incomes, is a bad idea, I don’t support it…

Question Time – 25 May 2015

And when they get into their retirement, we are going to make sure that their hard-earned savings in their superannuation will not be the subject of the tax slug that those opposite want to impose, … Those opposite see it as a tax nest—a tax nest for those to plunder.

The shadow minister earlier referred to ‘trousering’. The ‘trouser bandit’ sits over there because he, together with the shadow Treasurer, wants to come after the hard-earned superannuation savings…

What we will do for them is: we will not tax them like the ‘trouser bandit’ opposite.

3AW – 18 May 2015

It’s the Labor Party who wants to tax superannuation, not the Liberal Party, particularly the incomes of superannuants and I think that’s a fairly stark contrast that’s emerging.

Doorstop – 8 May 2015

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…

Press Conference – 7 May 2015

MINISTER MORRISON: What we are not going to do is we are not going to tax those savings, like Bill Shorten wants to do. That is the difference, we will not tax your super, Bill Shorten will.

MINISTER MORRISON: Yes, and there are other taxation arrangements that apply to superannuation already and we are not going to increase those taxes as the Labor Party does and nothing we have done with the Greens has in any way changed the Government’s position on not taxing your super. We will not tax your super.

ABC AM – 5 May 2015

…what is not fair is if you save for your retirement and you create yourself a superannuation nest egg and the Government then comes along and taxes that income; which is what Labor are proposing to do.

ABC RN – 5 May 2015

We don’t think that people who have done that should be punished with higher taxes, Bill Shorten does, and so does Chris Bowen and I think that’s a stark difference between the Government and the Opposition on these issues.

3AW – 1 May 2015

The Government does not support Labor’s proposal to tax superannuants more on the income they have generated for their retirement.”

Australians “… spooked out of… their [superannuation] investment” – Scott Morrison

Treasurer Scott Morrison, 18 February 2016

“One of our key drivers when contemplating potential superannuation reforms is stability and certainty, especially in the retirement phase. That is good for people who are looking 30 years down the track and saying is superannuation a good idea for me? If they are going to change the rules at the other end when you are going to be living off it then it is understandable that they might get spooked out of that as an appropriate channel for their investment. That is why I fear that the approach of taxing in that retirement phase penalises Australians who have put money into superannuation under the current rules – under the deal that they thought was there. 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.”

In light of the above, how can the public trust anything you say in future, let alone superannuants and those who advise others regarding superannuation?

As to the latter, see Jim Brownlee’s letter set out below; (see under “Letters to Save Our Super”, and Save Our Super’s Disclosure).

“Government Destroys Financial Adviser’s Trust in Superannuation

26 June 2016

I have been an ASIC-registered Financial Adviser for more than three decades. Over that time, I have provided my clients with retirement-planning advice. I have promoted the Government’s (both Liberal and Labor) carrot and stick message of (1), the increased long-term vulnerability of the aged-pension and, (2), tax concessions specifically structured to encourage self-funding superannuation retirement savings.

ASIC requires me to give my clients a Statement of Advice (“SoA”). It sets out the Government’s superannuation tax incentives. Those tax incentives underpin my SoA’s recommendations. They are crucial to the client’s decision. I am invariably asked “What happens if the Government changes things?”. UntiI now, I have always answered: “In my long-term experience, Governments have always ‘grandfathered-in’ protection for existing arrangements.”  

But Treasurer Scott Morrison, in his May 2016 Budget, changed all that.

Last year, before that Budget, he said to the Australian people:

“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…”

Not only did the Government not do what the Treasurer promised, they did precisely what the Treasurer promised that the Government would not do.

The Government came after people’s superannuation and announced proposed increased taxes on superannuation.

Furthermore, the Treasurer added insult to injury. He announced those increased taxes without also announcing that Australians who had acted in good faith and saved for their retirement under the then existing rules, would have their superannuation savings protected by grandfathering.

What am I supposed to tell my clients now, when they ask me, as they will, “What happens if the Government changes things?

Am I now to say, “Well, I remember the Liberal Government’s May 2016 Budget. I wouldn’t put my savings into superannuation because you can’t trust the Government not to change the rules, and not protect your savings by grandfathering the existing rules”.

Jim Brownlee

Authorised Financial Adviser Representative.

Berwick, Victoria”

Please let me know your view of the Government’s current superannuation policies and the outcome of the meeting next Monday, 18 July 2016. I intend to publish this email and any replies I receive on Save Our Super’s website.

If you wish to raise with me any aspects of the Government’s current superannuation policies, or any suggested changes to those policies, I am only too happy to discuss them with you.

Please feel free to contact me on 0400 — — or by email on jack.hammond@saveoursuper.org.au

Regards,

Jack Hammond QC

http://saveoursuper.org.au

jack.hammond@saveoursuper.org.au