3 September 2016
Sarah Martin Political Reporter Canberra @msmarto
Tony Abbott has clashed with Scott Morrison over his superannuation changes, labelling them “deeply unpopular” with the Coalition’s base, as support builds for the Treasurer to increase the cap on after-tax contributions to $1 million.
In a “tetchy” private meeting with a group of Liberal and Nationals MPs in Parliament House on Thursday, Mr Abbott confronted Mr Morrison and Minister for Revenue Kelly O’Dwyer about their proposed $6 billion super package. He argued the government was wrong to offer super concessions to low-income earners.
He also argued for the government to abandon its proposed cap on post-tax contributions.
As Mr Morrison and Malcolm Turnbull seek to reach a consensus with backbench MPs on the contentious election policy, The Weekend Australian can also reveal that doubling the lifetime cap on non-concessional contributions to $1m would hit the budget bottom line by $750m.
MPs at the meeting said they were “aghast” that Mr Abbott had proposed hitting low-income earners — particularly working mothers — to benefit the wealthy, whom the former leader accused Mr Morrison and Ms O’Dwyer of abandoning.
“He went in there looking for a fight; he wasn’t interested in information, he wasn’t interested in listening to his colleagues, he wanted to have a fight,” said one MP present at the meeting.
Mr Abbott is understood to have argued that the Coalition should represent lower taxes and smaller government, prompting a retort from Mr Morrison about policies Mr Abbott had put in place while leader that had increased taxes. Amid a series of tense exchanges with the man he believed betrayed him in last year’s leadership spill, Mr Abbott said the super changes announced in Mr Morrison’s first budget in May “sent the wrong message about aspiration” and he argued that there should be no cap on after-tax contributions.
When he was prime minister, Mr Abbott ruled out changing superannuation, saying it was not a “piggy bank” to be raided.
The Weekend Australian understands Mr Morrison told Thursday’s meeting that the Coalition needed to focus on its key narrative — the moral responsibility it had for budget repair — and pointed to legislation being pursued by the government that cut taxes and spending.
“Scott was very firm, but it was clear from Tony’s demeanour that he had not got out of bed on the right side that morning,” one MP said. Another said: “Tony arrived to the meeting cranky, and I think people were a bit shocked that he went for Scott so obviously. It was personal.”
Increasing the lifetime cap on non-concessional contributions to $750,000 is understood to cost the budget $250m. Removing the retrospective elements but keeping the $500,000 cap would cost $540m. Raising the cap to $1m would cost $750m, but the Treasurer did not present costings for abandoning the non-concessional cap, as advocated by Mr Abbott.
Sources at the meeting say Ms O’Dwyer took aim at Mr Abbott for suggesting the Liberal Party should only look after a narrow base of wealthy constituents, suggesting he had forgotten about the “Howard battlers” and reminded him that the Liberal Party was “not just the party of the privileged”.
On the Low Income Superannuation Tax Offset, which benefits those earning less than $37,000, Mr Abbott is understood to have criticised Mr Morrison for wanting to restore the measure that he had scrapped in 2014 when the mining tax was repealed.
“Tony argued that we had suffered political pain for getting rid of it and we won’t get any credit for putting it back,” a source said.
Another said Mr Abbott “was basically arguing that the lowest paid should subsidise the wealthy”.
One female regional Liberal MP who was at the meeting of about 10 MPs, was one said to be “shocked” at his proposal to scrap the policy. Sources said she pushed back against Mr Abbott, saying the policy benefited women and part-time workers, and the government would suffer enormous political damage if it cut the $1.6bn policy to help wealthy superannuants.
It is understood Mr Morrison and Ms O’Dwyer were supported by Fisher MP Andrew Wallace and North Sydney MP Trent Zimmerman in arguing for the offset to remain in place.
The meeting also canvassed lifting the non-concessional cap to $1m. Sources at the meeting said this received a “sympathetic” hearing from Mr Morrison and Ms O’Dwyer. Mr Zimmerman, and conservative MPs George Christensen and Tony Pasin, also argued in favour of lifting the cap.
A spokesman for Mr Morrison said: “The Treasurer and Minister for Revenue and Financial Services have been consulting with colleagues on the government’s superannuation measures and welcome the continued positive discussions that have been taking place.”
Mr Abbott did not comment.