Federal election 2016: Coalition sells super changes as ‘fair’

The Coalition is shifting the focus on its superannuation changes to ‘fairness and equity’.

Tony Abbott also backed the controversial super reforms.

The Coalition is shifting the focus on its superannuation changes to “fairness and equity” as it tries to deflect Liberal Party anger over its high-income super slug and retrospectivity claims.

Arthur Sinodinos said the changes announced in the budget were designed to create a more sustainable budget and retirement income system. Tony Abbott also backed the super reforms, praising Malcolm Turnbull’s “gutsy call” to change the super tax rules on high-income earners.

Labor yesterday accused the Coalition of mishandling and mismanaging the policy changes by not consulting with the industry before the announcement as the conservative Institute of Public Affairs began a campaign against the “retrospective changes”.

The government has been on the defensive after various economists and former deputy prime minister Mark Vaile declared the new $1.6 million cap on tax-free superannuation savings was a retrospective measure.

Opposition Treasury spokesman Chris Bowen said Scott ­Morrison had mismanaged the issue and a 2016 budget policy citing a 2007 starting point was “retrospective”.

The Cabinet Secretary said the superannuation tax rules were not retrospective and affected very few people dealing with large sums of money. “The fact that some people feel they are affected by this who are millionaires or multi-millionaires serves to underline the fairness of what we are doing with superannuation,” Senator Sinodinos said last night.

Mr Abbott also rejected claims that the changes were “retrospective” in an effort to quieten internal Liberal anger over the tax increase. “I think the government is ­absolutely on the right track and as I said, I think it’s a gutsy call by the government,” Mr Abbott told the Mosman Daily, the local newspaper in his electorate of Warringah on Sydney’s northern beaches.

“I expect that what we’ll see is, in the end, people accepting that when you’ve got a very serious budget deficit to be brought under control, you do have to make some very tough decisions.

“Decisions that people have in terms of how much money they will put into superannuation are not going to be unmade by this. So while I can understand people being anxious about it, strictly speaking, this is not retrospective legislation.’’

The Treasurer, campaigning in Tasmania, said generous concessions available to the “most wealthy superannuants” would be tightened. “Our changes are prospective. They deal with future earnings not past earnings,” he said. “There are no penalties for anyone who has accumulated more than $500,000 in non-concessional contributions. They can leave it all in there. And they don’t have to take that out of the superannuation fund they put it into.

“What we have done is we’ve ensured that the very, very, very generous concessions that were previously available to those of our most wealthy superannuants will no longer be provided. What they’ve been able to enjoy in the past, they will be able to retain. Going forward, we are tightening those concessions.’’