At a press conference following the release, treasurer Scott Morrison said that changes to superannuation funds were never going to be included in the first draft.
“It wasn’t intended to be in any tranche that we were releasing today,” he told reporters. “This is complex legislation and those elements of the package will be released in coming weeks and months as they are finalised.”
The cap
In his first budget on 3 May 2016, Morrison proposed reducing the lifetime non-concessional cap to A$500,000 (£286,598, $383,675, €341,174), replacing the existing caps of A$180,000 a year or A$540,000 over three years.
The new A$500,000 cap on post-tax contributions is expected to be apply retrospectively to payments dating back to 1 July 2007.
The May budget package also included a proposed A$1.6m cap on the amount of money that can go into a tax-free superannuation account, and a proposed A$25,000 cap on concessional contributions to super schemes.
In their favour the changes do aim to remove restrictions preventing those between 65 and 74 from making voluntary contributions, and introduce the Low Income Superannuation Tax Offset (Listo), which will prevent low-income earners from paying more tax on super contributions than their take-home pay.
Morrison said in his budget speech: “We need to ensure that our superannuation system is focused on sustainably supporting those most at risk of being dependent on an age pension in their retirement, which is the purpose of these concessions.”
More recently Morrison has released new analysis aimed at reassuring his own party about the impact of his proposed changes to superannuation tax concessions.
The new details show the average super balance for the top 10% richest Australians over 65 is A$1.36m, below the A$1.6m tax-free transfer balance cap he’s proposing. Also less than 1% of Australian have made after-tax contributions above the proposed A$500,000 lifetime cap.
Continuing consultation
On Wednesday, Morrison said that the treasury is continuing its consultation process on issues such as the lifetime cap “to make sure they get it absolutely right”.
“Superannuation is a very technical area. My consultation with colleagues has been in very good faith and I really appreciate the very honest and very good faith feedback that I have received. It has been a good opportunity to talk about some of the issues, the concerns that have been raised.
“Having a superannuation system which heavily loads tax concessions into the retirement phase, as that pool of assets grows and grows and grows, makes it quite unsustainable. So [my colleagues] understand the policy challenge that is before us, and they also acutely understand and support the policy challenge of arresting the debt that we were left by Labor.”
