The superannuation system should ensure that as many Australians as possible have access to the resources for a dignified retirement, without having to rely on the full Aged Pension.
The government’s Financial System Inquiry recommended broad political agreement around the objective of superannuation, a recommendation Labor has supported. It was disappointing to see the government dropping the objective on the table as a budget night press release afterthought, on the eve of an election. In so doing, the government has failed to prioritise the objective or take it seriously.
We see the superannuation objective as something that all future policies track towards. It will be fundamental in providing certainty in the system.
As part of the infrastructure for a stable system, a Shorten Labor government will establish a Council of Superannuation Custodians. This is an independent body that would advise the government of the day on how superannuation policy is tracking and about future changes to the system. It would report every five years, taking superannuation policy outside of the annual budget cycle, and outside of the electoral cycle. The establishment of such a body has widespread community support.
Labor believes that superannuation tax concessions are poorly targeted and need to change. The system is providing the largest concessions to people who need them least, at a significant cost to government.
Both high and low income earners supported
We have been pleased to see the government’s support for reducing the threshold for the High Income Superannuation Contribution to $250,000, and retaining support for low income earners through the Low Income Superannuation Tax Offset, both of which are carbon copies of Labor policy.
Labor is working through the remainder of the budget’s superannuation measures. We are giving particular attention to the retrospective elements of the proposed policies and those that impact upon middle Australia. Our priority is looking at the proposed $500,000 limit to see if there is a prospective way to implement the policy. We are also working through the feedback we are receiving on the government’s $1.6 million measure, as it compares to our $75,000 earnings measure. It remains to be seen how the measures will be implemented and how they will interact, something that we think requires further consideration.
It is notable that in the budget papers, the government observes that Australians need to have confidence in the superannuation system. The government’s drastic changes to superannuation, made on the eve of an election, do nothing to instil the kind of confidence they recognise is needed.
The federal election will come and go this winter, but the financial concerns of Australians will remain. Superannuation is about the financial stability of our community in the decades ahead. We don’t believe it is good enough that members of the government cannot explain the proposed changes, let alone how they support a proposed objective of superannuation. It has been very telling that there has been virtually no discussion by the government of how their superannuation changes link to a proposed objective, showing just how hastily and haphazardly the package was put together. Our superannuation system is the envy of the world, and its continued success relies on better treatment than this.
Dr Jim Chalmers is Shadow Minister for Financial Services and Superannuation