Doubling super cap to $1million would ‘satisfy’ restive Coalition backbencher

Australian Financial Review

21 August 2016

Jacob Greber

Liberal National MP George Christensen, who has threatened to cross the floor against Treasurer Scott Morrison’s $6 billion crackdown on high-end superannuation concessions, has signalled that doubling the $500,000 lifetime cap would bring him back within the fold.

In a sign of how far restive backbenchers are demanding Mr Morrison go in winding back the Coalition’s super plan, Mr Christensen said that lifting the cap to $1 million “would satisfy most concerns” over the government’s policy.

Raising the lifetime non-concessional contributions cap would almost certainly wipe out most of the budget benefit from the $550 million measure and leave the Coalition wide open to opposition attacks that the government is demanding curbs to middle-class welfare while failing to share the pain on its wealthy political base.

Labor is expected to ramp up this issue in coming days.

Mr Christensen’s intervention follows revelations in The Australian Financial Review last week that Mr Morrison is considering either lifting the cap to $750,000 or making it prospective.

Government ministers maintained their stance over the weekend that they were consulting the industry and party colleagues, with Mr Morrison spending much of last week travelling around the country canvassing alternatives.

Financial Services Minister Kelly O’Dwyer was tight-lipped about the cap on the ABC’s Insiders on Sunday, but declined opportunities to deny the cap is now under review.

“We’re doing what we always do when it comes to legislation, we are consulting very broadly,” Ms O’Dwyer said. “We’re making sure that there are no unintended consequences. We’re making sure that we get it right.”

She emphasised that the Coalition’s super policy was about ensuring more flexibility for savers and allowing lower-income earners to increase their concessional contributions caps, with a rolling $125,000 allowance over a decade.

She said that would add up to $250,000 that could be put into super.

“We’re going to be legislating an objective for superannuation that says that it is for the retirement incomes of Australians that will either supplement or substitute for the aged pension,” she said.

“Now that is where our package has been tied together through this particular objective. The non-concessional contributions is one aspect that people have highlighted.”

There is growing anger within Labor that the Coalition is watering down its proposed curbs to high-end superannuation at a time when the opposition is being encouraged to support the government is cutting welfare supplements to low and middle-income families.

Both sides of politics denied on Sunday that they had reached a deal to halve a $700 payment, with both saying they haven’t been approached by either side.

Opposition frontbencher Brendan O’Connor said Labor will keep its election commitments but had to scrutinise a proposed omnibus bill with a bundle of measures to ensure the government was keeping its promises.

He added that if the government was going to put such a premium on keeping promises it should go ahead with its cuts to the super concessions as laid out in the May budget.