David Crowe Political Correspondent Canberra @CroweDM
Scott Morrison is vowing to scale back the “extremely generous” tax breaks on superannuation, telling wealthier Australians to accept the changes while other people are also dealing with cuts that are needed to balance the budget.
The Treasurer hardened his message on the need to scale back the tax concessions despite a Liberal Party backlash against the budget reforms, which raise $6 billion in tax revenue, and use half of that amount to fund benefits for workers on low incomes while the rest helps to narrow the deficit.
“The tax arrangements for superannuation have been extremely generous and they were made extremely generous at a time when there was $20bn of surplus in the budget and $40bn in the bank,” Mr Morrison said on Sydney radio 2GB yesterday.
“Now, the simple truth is going forward with the way things are globally and where the budget is at, those sorts of concessions can no longer be afforded. And if I’m going to make changes, as I have as social services minister, to pensions, if I’m going to make changes to family tax benefits, if I’m going to do those sorts of things, then frankly we need to ensure that these savings and these other revenue measures are felt evenly across the population.”
Mr Morrison persuaded parliament to accept tougher rules on the pension assets test when he was social services minister, scaling back the part-pension for thousands of older Australians in the name of budget repair.
As Treasurer he is proposing savings on super tax concessions that impact on workers or retirees who are generally wealthier than those who had to accept the pension changes.
The budget cuts to family tax benefits are intended to raise about $3bn — about the same as the super reforms — and will halt annual supplements for some families on low incomes, leading Mr Morrison to argue that he must spread the burden on high-income families as well.
Liberal MPs are preparing to dispute the need for super tax hikes when parliament resumes at the end of this month, aiming for a partyroom meeting on August 30 to press for changes that could soften the impact.
With Labor already banking the super savings in its policy costings and the Greens arguing for cuts to the concessions, the package appears highly likely to be legislated, provided it can clear the Coalition partyroom, with limited scope for crossbenchers to sway the outcome.