Prime Minister Malcolm Turnbull has reshuffled his cabinet, including a number of the Treasury ministries. But what will this mean for superannuation policy?
As was widely expected, Scott Morrison has replaced Joe Hockey as Treasurer. Joe Hockey will go to the backbench and retire from Parliament, in time.
Mathias Cormann will remain the Finance Minister.
Kelly O’Dwyer, formerly the Parliamentary Secretary to the Treasurer, will become the Assistant Treasurer and Minister for Small Business, replacing Josh Frydenberg and Bruce Billson, respectively. The position of Assistant Treasurer will become a Cabinet post. Frydenberg becomes the Minister for Resources, Energy, and Northern Australia; Billson will go to the backbench, after choosing to not take up a sub-Cabinet position.
There is not a position including superannuation in the title, as there has been at times in the past.
So what will these changes mean for the Government’s superannuation agenda?
Given the repeated promise from Tony Abbott of ‘no adverse or unexpected’ changes to superannuation, there is limited legislation before the Parliament. But there have been calls for the new PM to drop the Abbott/Hockey promise and reform superannuation tax concessions, including from Chair of the Financial System Inquiry, David Murray.
Super fund governance
Josh Frydenberg had been arguing the case for changing the superannuation fund governance requirements, including at least one-third independent directors. The bill to enact these measures was only introduced to the House by Mr Frydenberg last week, but will now likely be the responsibility of Kelly O’Dwyer, as Assistant Treasurer.
Superannuation Guarantee and Single Touch Payroll
Kelly O’Dwyer, as Minister for Small Business, will also likely take over responsibility for changes to the superannuation guarantee penalties, recently the subject of a consultation process. Bruce Billson said he was encountering resistance with the measures.
Minister O’Dwyer will also be responsible for Single Touch Payroll. The Single Touch Payroll system, announced by Bruce Billson as a way to reduce red tape for employers, has been slowly working its way through a consultation process. In June the start date was pushed back. It is still unclear if the new system will include more frequent payment of PAYGW and super guarantee, or just same-time reporting.
Financial System Inquiry
The Government has yet to fully respond to the Financial System Inquiry, despite scrapping the bank deposit levy and hinting at limited changes to SMSF borrowing. It was reported that Joe Hockey was to release the response on Tuesday last week, following the Cabinet meeting and before the financial markets opened. It is unclear if the recent leadership and ministerial changes will simply delay the response, or result in alterations.
Update: Fairfax media is reporting that the Government’s response to the FSI final report will likely be delayed at least a month and may be changed, following the Cabinet reshuffle.
Update #2: Treasurer Morrison said the “response to the Financial Systems Inquiry is proceeding, and is very close to completion, and will soon be considered by Cabinet.”
Tax White Paper process
The release of the Tax Discussion Paper was delayed by the now former Treasurer Joe Hockey. The timetable for submissions was further extended as part of negotiations with the Greens to pass changes to the Age Pension. This leaves the Government little time to prepare, release and consult on the Tax Green Paper and then release the Tax White Paper in order to take the proposals to the next election.
Update: It is being reported that the PM has suspended all work on the Tax White Paper.
Treasury has also conducted a consultation process on reforms to the superannuation pension rules, which was an election promise, but as yet nothing has emerged.
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