Poorer workers, mothers win in superannuation reforms

Scott Morrison has tried to turn the tables on Bill Shorten in the political brawl over superannuation.

Treasurer Scott Morrison yesterday.

Scott Morrison has tried to turn the tables on Bill Shorten in the political brawl over superannuation by legislating $3 billion in savings, warning voters that Labor would lift taxes even higher on ­retirement nest eggs.

The Treasurer intensified his attack on Labor for its “lies” on super during the election campaign, after the two major parties voted together yesterday on most of the reform package, but split on concessions worth $1.4bn.

The government will turn its attention to the restoration of the Australian Building and Construction Commission, the next bill in the queue of reforms it is trying to get through the Senate this fortnight.

Ministers are increasingly confident of victory on the workplace reform in the wake of the successful votes on super and union governance this week, given a comment from Victorian independent senator Derryn Hinch yesterday that the ABCC was ­likely to be a “Christmas present” for the government.

The super package includes measures that refund taxes for workers earning less than $37,000 a year and new concessions for small business owners and mothers returning to the workforce.

Mr Morrison said the changes “were not easily won” but were important to achieve and should be remembered by those who complained there was no ­reform.

“It needed to be fairer. It needed to be more flexible. It needed to be more sustainable,” he said of the super tax concessions. “We took the difficult decision to go and pursue that and we took it to an election. We actually were upfront with the Australian ­people about it and we made our case out there and we got the feedback.”

Labor will go to the next election arguing against the catch-up contributions for people returning to the workforce and a tax ­deduction for small business owners. While the Coalition policy raises $6bn in taxes but hands back about $3bn in concessions, the Labor policy would hand back only $1.5bn.

“At the next election there is only one party that is going to be seeking to tax superannuation more, and that’s the Labor Party,” Mr Morrison said.

Labor Treasury spokesman Chris Bowen accused Mr Morrison of “giving up” on a budget saving that could help save Australia’s AAA rating at a time when the deficit could lead to a credit downgrade.

“The Treasurer today chose to create new super tax concessions that largely benefit high-income earners at the urging of the ­extreme right wing of the ­Coalition partyroom, over enacting further measures to deliver more budget savings,” he said.

Labor’s stand now puts it at odds with super industry groups calling for a halt to tax changes once yesterday’s bill is put into ­effect from July 1 next year.

The Association of Superannuation Funds of Australia welcomed the Senate vote and said there should be “no further changes to the tax treatment of super” because of the risk of fear and uncertainty.

The association representing self-managed super fund owners blasted the Senate for “waving through” the changes without ­debating “retrospective” changes such as an increase in earnings tax on funds with more than $1.6 million. “In looking the other way on this important issue, the Senate has failed in its duty to uphold a fundamental principle of good law,” SMSF Owners Alliance director Duncan Fairweather said.

The Council on the Ageing praised the “fairer and more ­sustainable” super changes but called on the government to ­restore some benefits for older Australians.