The Federal Government has roundly rebuffed Federal Opposition leader, Bill Shorten’s suggestions on superannuation policy amendments, with the Minister for Finance, Kelly O’Dwyer claiming Labor’s policy is bad for women, bad for carers and bad for contractors and small businesses.
Shorten’s move on superannuation has also received the thumbs down from the Self Managed Superannuation Funds Association (SMSF Association) with its chief executive, Andrea Slattery stating the proposals were a step in the wrong direction, particularly with respect to the carry forward of unused concessional contribution caps, the removal of the “work test” for people aged 65 to 74, and the abolition of the “10 per cent rule” for personal deductible superannuation contributions.
“The SMSF Association believes the Labor Party’s suggested policy to oppose these Budget measures is a shift in the wrong direction for our superannuation system,” she said.
In circumstances where the Government is going to battle to get its Budget changes to superannuation through both houses of the new Parliament, O’Dwyer made clear that Shorten’s address to the National Press Club had created no common ground on the key policy issues.
“By failing to back our changes on allowing catch-up concessional super contributions; harmonisation of contribution rules for those aged 65 to 74 and extending tax deductions for personal super contributions, Labor have demonstrated a lack of understanding of the real changes in working patterns that have been occurring in our economy and our communities,” she said.
“Labor’s urge to axe the Government’s catch-up contributions provision, which would benefit around 220,000 individuals with balances less than $500,000 are denied the flexibility to boost their super savings.
“Labor’s proposal to prevent the harmonisation of contribution rules will prevent older Australians from more readily contributing to their super. And Labor’s opposition to the Government’s tax deduction measures would prevent 800,000 contractors, and non-unionised workers, getting the same deductions as everybody else,” the minister said.
For its part, the SMSF Association found some merit in the Labor Party’s proposal to lower the Division 293 tax threshold to $200,000 from the Government’s proposed $250,000 threshold in order to fund change to the non-concessional contribution lifetime cap, with Slattery saying it deserves further consideration and the Association will take time to consider the impact of this proposed policy.
