The Grattan Institute has identified superannuation as the most important test of Malcolm Turnbull’s leadership, saying if he can’t get the changes he took to the election through Parliament, it will mean Australia’s system of government is “irredeemably flawed”.
It says super should be the Prime Minister’s most important political test, “not because our major political parties are at loggerheads, but because they largely agree”.
Bill Shorten’s superannuation offer
Labor is offering to support some changes to superannuation, but not retrospectivity. Courtesy ABC News 24.
“If we cannot get reform in this situation, then there is little hope for either budget repair or wider economic reform,” it says in a paper on the super reforms released on Monday.
In the May budget the government lowered the annual cap on employer-sponsored superannuation contributions to $25,000, introduced a $500,000 lifetime cap on the personal post-tax contributions mainly made by high-income earners, and imposed a $1.6 million cap on the super funds whose earnings would be tax-free in retirement.
Labor supports all of these measures subject to clarification that the $500,000 lifetime personal contributions cap is not “retrospective”.
Much of the opposition to the measures has come from Coalition backbenchers, with whom the Prime Minister is “consulting on implementation”.
The Grattan report, A better super system: assessing the 2016 tax reforms, says there is little evidence to suggest the proposed changes cost the government votes, noting that the 10 electorates most affected by the changes swung less to Labor than the national average.
“Polling suggests that support for the changes is highest amongst older people on high incomes, perhaps because they understand that the current system is unsustainable,” the report says.
“In the face of these facts, some arguments against the superannuation proposals seem to amount to a claim that they should not proceed simply because Coalition Party donors oppose them, which is not usually considered a relevant consideration for policy decisions.”
Grattan chief executive John Daley rejected the superannuation industry’s claim that the changes could leave as many as 9 per cent of super account holders worse off, saying the figure was arrived at by double counting. The institute’s upper estimate was 4.2 per cent, close to the 4 per cent figure arrived at by the government.
The changes would cut the net present value of the lifetime retirement income support given to Australia’s highest earners from about $800,000 to $600,000. They would leave the support given to middle earners unchanged at about $300,000.
Article source: http://watoday.com.au/federal-politics/political-news/super-will-be-malcolm-turnbulls-key-test-grattan-institute-20160904-gr8bmi.html