Labor would review 2016 Budget superannuation changes

Labor party, ALP, superannuation changes, election 2016, budget 2016The ALP would, should they win the upcoming election, conduct an inquiry into the changes to superannuation announced by the Coalition in the 2016 Budget.

“A Shorten Labor Government will review the Turnbull Government’s proposed changes to superannuation contained in this year’s federal Budget,” said a statement by Shadow Minister for Financial Services and Superannuation, Jim Chalmers.

“Labor will not make the same mistake the Turnbull Government has made in coming to a final view in advance of properly analysing each measure and how it relates to the others.”

“Superannuation changes should be made in a careful and cautious way, not dropped on an unsuspecting public on the eve of an election, without due consideration or warning.”

“The Turnbull Government’s inability to explain or defend these changes has caused a lot of anxiety in the community and has diminished confidence in the system.”

“Labor will conduct a review in the second half of 2016, to report in early 2017, in time for the Budget and in advance of any legislation being introduced into the Parliament.”

“We will take the outcomes of the review into account when implementing any proposals which turn out to be fair and workable and when considering any alternative measures which yield similar savings.”

When Labor announced its policies of taxing pension phase super fund income and lowering the Div 293 threshold the policy document Fairer Super Plan said “if elected these are the final and only changes Labor will make to the tax treatment of superannuation”.

The Labor Party released their policy costing on Sunday, the same day as the Liberal Party campaign launch. Shadow Treasurer Chris Bowen said the ALP is committed to raising the same amount of revenue from superannuation as the Coalition, but has concerns around retrospectivity.

“Importantly, Labor is making major budget improvements through measures that apply prospectively – not retrospectively. This is an important principle, and one that guides Labor’s tax policy development,” says the document titled “Labor’s Fiscal Plan”.

“Labor respects investment decisions made under existing rules and as a result of grandfathering, our budget improvements build steadily over the forward estimates before delivering a substantial fiscal dividend in the medium term.”

“The Liberal Government, in contrast, has announced retrospective policies that have undermined public confidence in our superannuation system.”

There are reports that the Coalition would include ‘transitional provisions’ in the proposed Budget 2016 changes for SMSFs which have entered into contracts or have Limited Recourse Borrowing Arrangements (LRBAs).

The Labor costings also show a total of $0 over the forward estimates relating to the Council of Superannuation Custodians and $101 million raised from increasing the penalty unit rate from $180 to $210.

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