3 July 2016
The rebuke delivered by voters to the Coalition yesterday came as no surprise to one group of
electors.
Ever since the May budget introduced a new tax and retrospective limits on superannuation
savings, SMSF Owners and many thousands of individuals have been warning the Government it
is going the wrong way on superannuation.
This was expressed in our regular briefs to Coalition members before and during the campaign, in
letters from members of SMSF Owners to Coalition members, senators and candidates and in
thousands of social media comments. While the superannuation changes were not a headline
issue in most of the media during the campaign, we know that Coalition members were under a lot
of pressure in their electorates.
Many Liberal voters felt betrayed that a party supporting individual effort and self-reliance should
impose a new tax on retirement savings. This sentiment came not just from those in retirement
who would be affected directly by the tax now, but also from those in middle-age who aspire to be
financially independent in retirement.
It was extraordinary for a Coalition Government that argues for lower taxes and lower government
to introduce a brand new tax on superannuation earnings for retirees. There has never been such
a tax since superannuation was first introduced with the progressive income tax system over 100
years ago.
It was baffling that the Government attempted to argue that a new cap on contributions back-dated
by 9 years was not retrospective. It clearly was and already the Government has had to modify its
policy to take account of unintended consequences.
During the campaign and again on election night, the Prime Minister argued for stability in
government to deal with economic and political turbulence created by Brexit and other global
factors. It is no time to be fiddling with superannuation and undermining confidence in it.
On last night’s known voting figures it appears the Coalition will either just scrape back into
government on its own account or it may have to rely on independents to form a minority
government.
Either way, one of the first things the Prime Minister should do on his likely return to office is order
a re-think on superannuation policy and engage in genuine consultation with the superannuation
sector, including SMSFs, on a better way forward.
If changes to superannuation are considered necessary they should be made in a way that does
not reduce the value of savings that were made under the rules that existed before the May budget
or reduce the opportunity for people to make non-concessional contributions.
Changes to superannuation should be prospective, not retrospective and retirement savings made
before the May budget should be grand-fathered from the budget measures. This applies, in
particular, to the lifetime cap on non-concessional contributions.
Instead of imposing a new tax and contribution limits, the Government should be expanding the
parameters of superannuation and encouraging more retirement savings so more people can be
financially independent in retirement and not have to rely on the next generation of taxpayers to
support them.
Contact: dfairweather@smsfoa.org.au
Duncan Fairweather. duncanfairweather@gmail.com
Executive Director. 0412 256 200
SMSF Owners’ Alliance
