Labor has booked over $3 billion in net savings from changes to superannuation included in the 2016 Budget, despite voicing opposition to some of the measures.
The 2016 Budget included $5.99 billion in revenue raised from the changes to superannuation over the forward estimates, along with $2.79 billion of new spending measures, for a net $3.2 in new taxes raised from superannuation.
Source: Budget Paper No. 2 2016-17
Labor appears to have adopted these savings, despite not supporting all the policies. Their costings include the PEFO Underlying Cash Balance, before adjusting for the ‘Impact of Labor Measures’. The PEFO figure is an update to the 2016 Budget – it includes the $3.2 net new revenue from superannuation. But Labor hasn’t adopted the policies, only committing to a review.
ALP Shadow Minister for Financial Services and Superannuation, Jim Chalmers, said: “A Shorten Labor Government will review the Turnbull Government’s proposed changes to superannuation contained in this year’s federal Budget.”
Labor says, should it form government, the review would report in early 2017, ahead of the next Budget.
This is despite previous statements that the Labor party would only make prospective, not retrospective, changes to superannuation and held “grave concerns” about some of the measures – in particular the $500,000 lifetime non-concessional contributions cap. Additionally the Labor policy document Fairer Super Plan – which includes the tax on pension phase income and lower Div 293 threshold – says “if elected these are the final and only changes Labor will make to the tax treatment of superannuation”.
In a press conference the Shadow Treasurer Chris Bowen was asked about the implications of the costings on superannuation policy:
REPORTER: Mr Bowen, you’ve announced yesterday you would effectively bank $3 billion due to the Government’s superannuation changes and said you will look at them. Does that mean if the review finds they are a good idea, that you will adopt the Coalition’s policy?
CHRIS BOWEN: Well what it means is, you’re right, we’re committed to raising the same amount of money as the Government. We had, of course, released our policies last year. The Government carbon-copied some of those, so of course we support the imitation of those. They’re exactly the same as the ones we announced in April 2015. There are others we have concerns about in terms of retrospectivity. We’d like to consult with the sector from Government, with the resources of Treasury, to ensure any measures we implement are implemented in a very fair manner.
The Shadow Treasurer was also asked about it on the ABC’s AM program:
MICHAEL BRISSENDEN: Just very quickly, isn’t it hypocritical to have claimed that the super changes are retrospective and sided with the opponents of it, and then claim the savings for your own bottom line?
CHRIS BOWEN: Well, what we’ve done is simply want to raise the same amount of money as Government but with the resources of government and the resources of the treasury, we’ll consult a better way of applying it without the retrospective elements.
MICHAEL BRISSENDEN: There’s not much certainty there for people who are worried about their super though, is there?
CHRIS BOWEN: Well what we’re doing, again. Fair dinkum we’ve led the debate on superannuation; we put our policies out last year. We did that in consultation with the superannuation sector, and we would do that again in government.
Prime Minister Malcolm Turnbull, following the release of the Labor costings, said: “If you look at the uncertainty that is there inherent in everything Labor is doing at the moment, look at what they’ve said about superannuation. They said they’ll take the savings from our policies but will think about what their policies might be?”