What’s next for super under a Turnbull government?
After what seemed like an eternity, the dust is finally starting to settle on the 2016 Federal Election, with Bill Shorten conceding defeat to Malcolm Turnbull on Sunday.
Now that the Prime Minister looks to have a government and a mandate, many are curious to see what the government’s next move will be, particularly in terms of superannuation. Much was made of the changes flagged by the government in the 2016 Federal Budget, but certain commentators and party figures suggest unpopular aspects of the new system may have been part of the reason the election came right down to the wire.
We’re going to look at the changes flagged, and what the parties have been saying about super, so you can have a better idea in terms of what’s happening to your nest egg.
What has the government promised?
The changes promised by the government if re-elected include the following, which would come into effect on the July 1, 2017 if successfully passed through parliament.
- $1.6 million cap on the amount of super you can transfer into a retirement income account.
- New taxation arrangements on transition to retirement strategies.
- Easier way to supplement retirement income with part-time work.
- Reduction of annual concessional contributions caps from $30,000 to $25,000.
- Low income super tax offset for $500 for people on less than $37,000.
What are the politicians saying?
Well, it’s still early days but the government looks to be rolling ahead with what it planned in the budget. After claiming victory for the government, Malcolm Turnbull said, “We need to ensure that Medicare, our education, our health services and all those vital government services are provided for and Australians feel secure, that they are provided for. At the same time we have to ensure that we bring our budget back into balance.”
Despite conceding defeat, Opposition Leader Bill Shorten suggested there should be a review to the changes before implementing them, telling The Australian, “I think it’s probably appropriate to get an independent expert review to examine whether or not the changes are retrospective.”
“If this review says that some of the changes are retrospective… then we can allay the concerns of hundreds of thousands of superannuants, indeed everyone in the superannuation system that we’re not seeing capricious changes undermining the integrity of the system.”
Significantly, Immigration Minister Peter Dutton hinted to there may be a review after the public backlash to the reforms, telling The Daily Telegraph, “None of us should have a tin ear to the public’s view about a number of issues including superannuation and the Prime Minister’s already flagged that the government should be looking at these issues.”
“There’s no question it was raised during the campaign (by voters).”
So while it’s too early say what actually lies ahead, it should an interesting few months in terms of super in Australia. Although as Matt Linden, director of public affairs at Industry Super Australia, notes in an interview with The Australian Financial Review, despite the uncertainty there remains a broad consensus among the three major parties.
“There might be some disagreement around the edges but the major parties have never been closer on superannuation policy,” he said. “The Liberal Party, the Labor Party and for that matter the Greens recognise there is some work to do around winding back tax benefits on contributions, whether they be concessional or non-concessional.”
What’s your take on the changes that are flagged for super? Are you on board with the government’s proposals, or do you think they should reconsider? Share your thoughts in the comments, we’d love to hear from you.
Related links:
Understanding super ahead of the Federal Election
5 most commonly asked questions about super