Australian Financial Review
6 November 2016
The Turnbull government is on track for a sorely needed win in Parliament with Labor poised to back its revamped set of changes to superannuation that put a lifetime cap on contributions and limits on retirement accounts.
With just three weeks of Parliament left this year and other government measures shrouded in uncertainty, the super changes, which clamp down on tax concessions and are designed to deliver a net $3 billion saving to the budget over four years, looks set to pass.
This would ensure the changes would come into effect, as originally intended, by July 1, 2017.
After crunching a deal last month with the backbench, which opposed a $500,000 lifetime cap on non-concessional contributions, the government will put the super legislation to Parliament the week after next with the aim of passing it during what will be the final sitting fortnight of the year.
Although Labor must approve the legislation through normal channels – shadow cabinet followed by caucus – senior opposition sources said it was unlikely there would be any significant objection although some minor changes may be demanded.
Labor promised before the election to deliver the same net saving to the budget with its own superannuation policy, and because some of the changes the government made to appease the backbench were also similar to those demanded by the opposition.
To win support of the backbench, the government dumped plans for a $500,000 cap backdated to 2007. Instead there will be a yearly cap of $100,000 on non-concessional contributions, down from the current $180,000-a-year cap, until the $1.6 million cap on super retirement accounts, also one of the new measures, is reached.
To recoup lost revenue, the government scrapped a proposal to remove restrictions such as minimum work requirements on people aged between 65 and 74 wishing to make voluntary contributions to their super. It also delayed by a year – from July 1, 2017 to July 1, 2018 – plans to allow people with interrupted work patterns to roll over unused concessional contributions form the previous year. Other elements of the super package include a $25,000 annual limit in concessional contributions.
On Monday, Parliament resumes for a week, has a week off, and then sits for the final fortnight starting on Monday, November 21.
This week, the Senate will pass budget appropriation bills and vote on the legislation to establish a same-sex marriage plebiscite on February 11. The plebiscite is headed for defeat but there may be some procedural jiggery-pokery in the Senate by Labor and the Greens. In order to exploit the numbers in the Senate caused by the resignation of Bob Day and the abstention from voting of One Nation’s Rod Culleton, there is talk of defeating the plebiscite and then bringing on a vote to legalise same-sex marriage. However, if this were to happen, the legislation would still need to pass the lower house and the numbers are not there.
The government will also attempt to put through both Houses its legislation to place a lifetime ban on entry to Australia for asylum seekers who arrived by boat after July 2013.
The move is a precursor to an as yet undisclosed plan to resettle those on Manus Island and Nauru in third countries.
On Sunday, Opposition Leader Bill Shorten again said that while Labor would support stopping the people from settling in Australia, it was “ludicrous” to ban them ever coming here, even as a tourist many years down the track.
Mr Shorten also signalled that Labor would back a proposal by Tasmanian senator Jacqui Lambie to force the government to further water down its backpacker tax. Originally, the plan was to place a 32.5 per cent tax on every dollar earned by seasonal labourers.
After a revolt by the backbench and sectoral interests, the government dropped the tax rate to 19 per cent. But Treasury says this will have the same deterrent effect on seasonal labour as 32 per cent. Senator Lambie is proposing 10.5 per cent, the same as New Zealand.
“We are open to it,” Mr Shorten told the ABC’s Insiders program.