8 August, 2016
David Crowe Political correspondent Canberra @CroweDM
Scott Morrison has countered the idea of giving wealthier Australians any relief from a new $500,000 cap on some of their superannuation, saying the change should go ahead to ensure “intergenerational equity” for younger workers.
The Treasurer conceded the case for “technical” changes to the budget package but held out against calls to change the start date for the $500,000 cap on after-tax contributions, a measure that has ignited warnings about retrospective taxation because the threshold will apply from July 2007.
Mr Morrison said the policy was “sound” and Australians who had already benefited from tax breaks on super would have to accept tighter rules, along with younger workers who will never benefit from the previous more generous concessions.
“So I think there is a real intergenerational equity here and those who stand most to benefit from those changes have the biggest balances, the biggest incomes and have made the biggest tax-free contributions,” he told the Australian Agenda program on Sky News yesterday.
A backlash against the super tax increases caused turmoil within Liberal ranks during the election campaign, as members withdrew support at polling booths and some quit the party.
Malcolm Turnbull and his ministers are holding to the $6 billion tax increase, which adds $3bn to the budget bottom line after helping fund a rise in super for millions of workers on salaries of less than $37,000 a year through a super tax offset.
Labor has embraced the $3bn saving and the Greens back the reform to super tax concessions, suggesting Mr Turnbull and Mr Morrison will have the numbers to legislate the changes if they can address complaints in the Coalition partyroom.
The $500,000 cap raises $550 million over four years but would raise very little if the start date were shifted to this year.
Draft legislation is expected from Financial Services Minister Kelly O’Dwyer in weeks but the date is not expected to change.
Mr Morrison said those who had already made non-concessional contributions of $500,000 should accept the new cap. “They have an average balance of $2m in their super — $2m. And they have actually on average contributed $700,000,” he said.