Labor to oppose retrospective Budget super changes

Federal Budget 2016/17, Budget 2016, superannuation, Budget in reply speech, Bill Shorten, ALP, Labor, retrospective changes to superannuation, LISC, LISTOLabor will oppose some of the 2016 Budget changes to superannuation, Opposition Leader Bill Shorten has said in his Budget in Reply speech.

“Labor will gladly support our own clear and costed policy to close the unsustainably generous superannuation loopholes at the very top end,” said Bill Shorten.

“We welcome the fact that three years after they voted to abolish Labor’s Low Income Superannuation Contribution, the Liberals have decided to keep it and simply rename it.”

The Government legislated the LISC to end from 30 June 2017. However the 2016 Budget included an almost identical Low Income Superannuation Tax Offset (LISTO) – to apply from 1 July 2017.

However Labor does not welcome the retrospective changes to superannuation in the Budget.

“Labor’s reforms to maintain the fairness and integrity of superannuation however, will only ever be prospective and predictable – so people can plan for the future with security,” said Mr Shorten.

“But the Coalition’s changes are chaotic and unprecedented. They were made with zero consultation.”

“They dangerously undermine what’s acknowledged as the world’s best system for securing a decent retirement for all Australians.”

“The Treasurer claims only a small number of superannuation account holders will be affected. That’s untrue. When the system is undermined, everyone is affected, everyone is at risk.”

“Every superannuation account holder can now only guess what Malcolm Turnbull and Scott Morrison will do next.”

“This is a matter of principle for us.”

“Labor has very grave concerns about retrospective changes – which is precisely why our reforms to Negative Gearing and Capital Gains explicitly rule out retrospectivity.”

It is unclear yet exactly which measures Labor will oppose – both the $1.6 million transfer balance cap and the lifetime $500,000 Non-Concessional Contributions cap have retrospective elements. Whether Labor will support other Budget superannuation measures changes, such as the change to Transition to Retirement pensions, is also unclear.

Perhaps these questions will be answered in the imminent election campaign?

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3 Replies to “Labor to oppose retrospective Budget super changes”

  1. The Liberal Party changes to superannuation are manifestly unfair. Had we known that such measures were coming, we would never focussed our retirement plans on superannuation and made only the statutory minimum payments. As it is, our SMSF retirement nest egg’s income ability has been diminished and worse still, or plan to top up our super with concessional monies to complete our “plan”” and retire with some dignity and not ever be a burden on social welfare has now floundered. Our plan has been to build my husbands super account as he is older and will retire first. Now we find that as a couple we will be limited to $1.6M and its now too late for me to build up my own account in our SMSF, thanks to Morrison and Turnbull.

    $1.6M is grossly inadequate to provide a comfortable income for a married couple during periods of extremely low interest rates and falling dividends. My husband and I are totally mortified, that any government would actively prey on what it believes are people who have little political voice. Shame on you Turnbull and Morrison. Begone with both of you.

    1. Yes Viki, I entirely agree with you. For almost two decades have we been enticed by governments of various persuasions to look after ourselves. The one who had the financial resources were rightfully using the super incentive to maintain their lifestyle after retirement. People only complied accordingly and planed with the given rules for their future. Most of the people who had the means to accumulate, also married and had children much later. As it is in my case, and possibly for many others, still having children attending universities at parent’s retirement age, which one would have factored into super during the accumulation phase. Assuming generously, if someone had $ 800.ooo over the $1.6 Mill tax free earning limit. At 15% Tax, would amount to Tax of $ 6000,-. This amount would cover just the Uni Fee for half a year, not considering all other support expenses required for children at this stage of their life.
      It is a retrospective punishment for everyone who was taking care of their future. It was a perfect recipe by the coalition to loose their most stable voter base.
      Bernard

      1. Yes Bernard,

        I agree entirely, also the new super limit for many people is effectively $500K, given that many small business people defer their own wages for many years while they establish their enterprise, now instead of being able to sell up at retirement and put a reasonable sum into super, they have a limit of $500K.

        Wow, what a completely and absolutely discriminatory despicable measure by a so called Liberal government that is putting itself up as the champion of small business for the coming election. Again shame on you Turnbull and Morrison.

        Regards

        Viki

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