Minister for Revenue and Financial Services, Kelly O’Dwyer, has given a speech today to the Financial Services Council Leaders’ Summit 2016, whereby she has stood by the Government’s superannuation reform package:
Superannuation is a key part of the system that supports Australians in their retirement years. As the population ages and fiscal pressures increase, we need to be sure that the tax concessions that apply to super are fiscally sustainable and appropriately targeted, and that the system has integrity. It also needs to be flexible, to accommodate the wide range of working arrangements that people experience across their lifetimes.
As you are aware, the Budget contained a package of superannuation measures that are designed to improve the sustainability, flexibility and integrity of the superannuation system. We expect to begin consultation on exposure draft legislation shortly and, consistent with usual practice, will listen carefully to advice on the design of the legislation.
While some of the changes were the subject of much attention during the election campaign, others have received less attention, and I would like to highlight now some of the changes that will improve the flexibility of the system.
We recognise that people have different work patterns. People will often have multiple jobs and several careers across their lifetimes. They might also take breaks from work — to look after children, or care for an elderly parent, for example. The superannuation system needs to accommodate changes in how people interact with it over their lives.
Under the changes more employees and a wider range of self-employed people will be able to claim a tax deduction for personal superannuation contributions.
For the first time, people with balances under $500,000, will be able to rollover unused concessional caps for the previous five years to allow those with interrupted work arrangements, such as parents, to make ‘catch-up’ concessional superannuation contributions.
We are also encouraging partners to make contributions to their low-income spouse’s superannuation by extending the eligibility for individuals to claim a tax offset for these contributions.
We will also remove the rules that stop people aged 65 to 74 from making voluntary contributions to their superannuation. This will help those who are no longer working to top up their retirement savings from sources not necessarily available to them before retirement.
And we will remove tax barriers that might hinder new retirement income stream products to encourage innovative products being designed and developed. This will ultimately give consumers more choice and improve confidence around longevity risk.
Finally on superannuation, the Government remains committed to strengthening the governance, transparency, competition and efficiency of the superannuation system. It doesn’t make sense that some superannuation funds have lower governance standards than life insurance companies and banks, given that superannuation is a compulsory savings system.
Good. No mention of a back down.
Unfortunately, Shadow Treasurer Chris Bowen signaled that Labor would continue to oppose the Coalition’s so-called “retrospective” cap, saying the following in a speech today at the same conference:
As Bill Shorten said earlier in the week, the Prime minister needs to restore confidence in our superannuation system.
We remain and will remain deeply concerned and opposed to aspects of retrospectivity, as do several members of the Liberal party.
As a matter of urgency, the Government should resolve this area of their policy.
Labor will work constructively with the Prime minister and the Treasurer to ensure that changes to superannuation are not retrospective.
To make sure changes to poorly-targeted superannuation tax concessions, particularly at the top end, are done in a careful, considered and consultative way.
The Prime Minister will continue to face a revolt from within his party, something which will undermine reform altogether.
Our objection has not been to the amount of money raised by the government’s reforms, but to the lack of process consultation and the clear retrospective nature of their changes.
We would be happy to work with the government on sensible changes which raise the same or similar quantum as the government has targeted but which don’t offend the principle of non-retrospectivity and which are workable.
ABC Fact Check has already comprehensively debunked your “retrospective” claim, Chris. So stop playing silly politics and standing in the way of sensible reform.
