The ALP has announced it’s latest superannuation policy, which includes lowering the annual non-concessional contributions cap to $75,000, but hasn’t said it will vote against the Government’s Bills.
“Today Labor proposes a superannuation reform package that is fairer than the Government’s and delivers more substantial budget repair,” said a statement by Shadow Treasurer Chris Bowen.
Labor proposes that the annual non-concessional contribution cap be lowered to $75,000. The Government’s current policy is for a $100,000 annual cap.
The Government had announced in the 2016 Budget, and took to the election, a policy of a lifetime $500,000 cap on non-concessional contributions. However, post-election, this was ‘modified’ to an annual $100,000 cap, down from $180,000 currently. There will also be restrictions on people with large superannuation balances making non-concessional contributions.
“Malcolm Turnbull’s retrospective changes undermined confidence in the retirement system and sparked another civil war inside the Liberal Party,” said Chris Bowen.
“After caving in to George Christensen, the Government has announced a revised package which overwhelmingly benefits high-income earners, opens new tax loopholes, and fails to deliver substantial budget repair.”
“While the Government has scrapped its flawed and retrospective changes, the current proposals do not go far enough to return fairness to the system, or to deliver substantial budget repair.”
Labor also proposes lowering the Division 293 threshold – which increases the contributions tax paid by high income earners – to $200,000. The Government’s policy is to lower the threshold from the current $300,000 to $250,000.
The ALP will also oppose new catch-up concessional contributions and expanding the ability for employees to claim a tax deduction for personal superannuation contributions.
“Labor will continue to oppose these new tax loopholes. It’s ludicrous for the Government to be proposing new loopholes when it should be cracking down on existing ones.”
The ‘10% rule’ currently restricts the ability to claim a tax deduction for personal super contribution to those earning a small proportion of their income from employment. The removal of this rule was included in the 2016 Budget.
It remains unclear if Labor intends to vote against the Government’s Bills if these proposals aren’t adopted.
“Labor will finalise its position on the Government’s legislation when it is eventually presented to the Parliament. But we urge the Government to accept Labor’s responsible proposals, and work with us to deliver superannuation reforms which are fairer and better,” says the policy announcement by Mr Bowen.
The Coalition has labeled the ALP policy a “tax grab”.
“Our reforms to superannuation are aimed at improving the sustainability, fairness, flexibility and integrity of the superannuation system,” said Minister for Revenue and Financial Services, Kelly O’Dwyer.
“Labor has changed its position on super countless times. Even today, Labor’s superannuation spokeswoman, Katy Gallagher, is on the record that Labor has yet another superannuation plan that they are yet to announce.”
“Labor sees superannuation as just another honeypot from which to draw revenue. You just can’t trust Labor with superannuation.”
Minister O’Dwyer said the Government’s superannuation legislation would be introduced to the Parliament today.
Labor’s new superannuation policies have been costed by the Parliamentary Budget Office as saving $1.438 billion out to 2019/20, on top of the $3.064 billion from the Government’s changes, and $18.86 billion out to 2026/27.