Speaking to SMSF Adviser, shadow assistant treasurer Dr Andrew Leigh said the Coalition is facing the consequences of its failure to undertake proper consultation with industry before announcing its proposals for superannuation.
“We’ve been very clear, as has the Henry Review and a range of other reviews, that our tax concessions for super aren’t fair and aren’t sustainable but in changing those you’ve got to work really carefully, consult with industry, announce well ahead of time, and make sure you’ve got a clear transition path,” said Dr Leigh.
“The government has thrown these changes on the Australian people in the budget that just came down a month ago, and they’re paying the price for that lack of consultation.”
Dr Leigh said there are concerns within the industry that the number of people affected by the transition to retirement changes could be five times as large as the number estimated by the government.
“There are [also] concerns among the Coalition backbench and their donor base that there may be problems that the $1.6 million cap, and the $500,000 cap on non-concessional contributions may have significantly adverse effects,” he said.
“None of them were signalled before budget night, we didn’t get a clear conversation from the government about what they intended to change and how, which would have led smoothly to a set of precise reforms on budget night, it was all just thrown on the Australian people.”
The Labor proposal to tax earnings over $75,000 he argued had the advantage of “being a prospective measure that won’t force anyone to take money out of their superannuation accounts”.
“We’ll consult on the government’s proposals, we’ll do the consultation now, which [the Coalition] didn’t do until they had announced them, and we’ll come out with a clear position on all these superannuation issues before the election.”
The $75k earnings limit is the dumbest idea of the lot.
There is nothing in the super admin system nor the ATO systems where this information can be captured across multiple super funds.
So let’s add a couple of hundred million in additional upgrade costs whilst continuing to bleat about high cost of super fees.
Idiots.
It’s no secret that some within the coalition don’t support some of the changes to super proposed in the Budget. However, before the shadow treasurer attempts to take the moral high ground, we shouldn’t foget that Labour support the proposed changes!
On the whole they were quite good changes, even the TTR whilst a little harsher, you still get to max out your MDC if you are middle income earner. This has value.
MDC changes not great but won’t change the world.
$1.6M is more than fair.
$500k NCC on the other hand is ridiculous and should be changed. If you can have $1.6M in pension phase, why can’t you make a $1.6M NCC over your life?