Hate to say it Malcolm, but we told you so

logosoa3 July 2016

The rebuke delivered by voters to the Coalition yesterday came as no surprise to one group of


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


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