Both the Liberals and Labor have promised no new or higher taxes on superannuation.
“Under my government there will be no higher taxes or new taxes on superannuation. Not now, not ever. Not now, not ever,” said Prime Minister Scott Morrison.
After Morrison made his announcement, Opposition Leader Bill Shorten was asked to rule out new or increased taxes on superannuation.
“We have no plans to increase taxes on superannuation,” he said.
“We have no plans to introduce any new taxes on superannuation.”
Asked again to rule it out, Shorten said “sure”.
This is rather at odds with Labor’s superannuation policies, though exactly what those policies are is somewhat unclear. The ALP website doesn’t list its superannuation policies, but the website for Shadow Minister for Finance Jim Chalmers lists the policies as:
- Lowering the non-concessional contributions cap to $75,000
- Lowering the Div 293 threshold to $200,000
- Reversing “the Government’s superannuation tax loopholes”, including catch-up contributions and expanded tax deductability of personal super contributions
These policies are also listed in the 2018 ALP National Platform, though that doesn’t necessarily mean they are policies the party would take to an election.
Update: Labor has since been publishing policies on its website.
Shadow Minister for Finance Jim Chalmers claimed on ABC’s Afternoon Briefing that Bill Shorten was referring to any new taxes on superannuation, saying: “Bill was referring to additional changes beyond what we’ve already announced and had on the table for some time now. For some months we’ve said that we have proposed changes to superannuation.”
“We have no further announcements to make on superannuation and tax in the campaign. So the policy that we announced some time ago we will take to the election.”
Chalmers referred to the non-concessional contributions cap and the Div 293 threshold, saying the changes were “pretty modest”.
“That’s not a new thing, that’s been on the table for some time now, at least 12 months I believe.”
The Coalition claims the cost of Labor’s superannuation policies over the medium term – to 2029/30 – is $34 billion. But this is a Treasury costing of policies put to it by the Coalition, and the Coalition hasn’t provided any detail beyond the headline figure. In January, Treasurer Josh Frydenberg said Labor’s superannuation policies would cost $19 billion – it is unclear why there would be such an increase in the costings.
Thought I was being asked about unannounced changes: Shorten
In a press conference on Wednesday Bill Shorten said that, when he promised no new or higher taxes on superannuation, he “thought I was being asked about have we got any unannounced changes to superannuation”.
He said that Labor had outlined its superannuation policies three years ago.
“We have no proposals other that what we’ve already announced previously.”
Asked about costings, Shorten denied that Labor was raising taxes on superannuation, saying that when you “wind-back a concession that’s stopping a tax expenditure”.
Shadow Treasurer Chris Bowen provided a new costing of Labor’s superannuation policies – they are estimated to raise $30 billion over the 10 year medium term.
Shorten said Labor wouldn’t be lectured by a Government that, with “no mandate, and with no notice”, introduced the $1.6 million Transfer Balance Cap and made “retrospective changes” – a reference to the proposed, and later dropped, $500,000 lifetime non-concessional contributions cap that Labor opposed. Labor, however, did support the Transfer Balance Cap.
Shorten also criticised the Coalition for freezing the Super Guarantee rate at 9.5%, which has been “such a disaster for low-paid people and for middle class people in this country”.
“Its just real economic vandalism.”
Promises not to change super often broken
Promises to not change superannuation do not have a good track record.
Ahead of the 2013 federal election Tony Abbott promised no “adverse changes to superannuation under a Coalition government”. Once in government the Coalition delayed increases to the Super Guarantee. The RMIT/ABC Fact Check records this as a broken promise. Despite criticising it at the time, Labor have now adopted this slower timetable of increases to the Super Guarantee rate.
In 2015, then-Prime Minister Tony Abbott promised that “we aren’t ever going to increase the taxes on super”.
During the 2016 election campaign Malcolm Turnbull was asked if the changes to superannuation in the 2016 Budget were ‘ironclad’.
“It is absolutely ironclad. Yes the commitment that we have made in the budget are our policy. If we are returned we’ll implement those policies,” he answered.
However, after the election, the Coalition dropped the $500,000 lifetime non-concessional contributions cap and dropped other policies to offset the revenue lost. This was, in part, due to agitation from members of the Coalition, including George Christensen.
In 2016 – after Malcolm Turnbull became PM and the 2016 election was held – the Coalition passed the ‘Fair and Sustainable Superannuation’ Act. This legislation included the Transfer Balance Cap, increased taxes on Transition to Retirement pensions, lowered the threshold for Div 293 tax and reduced the contribution caps. In total the Act increased taxes on superannuation by just over $5.2 billion, with slightly more than $2.4 billion then spent on superannuation – improving the Budget bottom line by almost $2.8 billion over the forward estimates.
In August 2017, then-Minister for Revenue and Financial Services Kelly O’Dwyer said: “I am pleased to report today that the Coalition has done the job that we needed to do on the taxation of superannuation. That job has been finished and legislated. We have no further plans.”
A little over eight months later the Coalition released its 2018/19 Budget, containing the ‘Protecting Your Super’ package of changes to superannuation. These were estimated to raise almost $864 billion over the forward estimates, though this is reduced somewhat by amendments to the legislation in the Senate.
In October 2018, Assistant Treasurer Stuart Robert said the Government had “committed to making no further major changes to superannuation taxation”.
This article has been updated since publication with the further comments by Bill Shorten, and details around the proposed $500,000 lifetime non-concessional contributions cap.