Labor senator Kristina Keneally and shadow treasurer Chris Bowen have reaffirmed the party’s intent to make further changes to rules governing superannuation contributions if it wins the next federal election.
Keneally was asked to deliver a speech on Bowen’s behalf at the last minute at the Financial Services Council’s political breakfast series, as a man climbing illegally on the Sydney Harbour Bridge caused traffic delays that prevented him from reaching the event on time.
After defending the party’s recent proposal to abolish imputation credit refunds, Keneally reminded the audience that Labor remained committed to some of the key proposals detailed in its November 2016 superannuation reform package.
“We will also lower the annual non-concessional contributions cap to $75,000 and further lower the high-income super contributions [or Division 293] threshold to $200,000,” she stated. “Labor’s measures will make the system fairer, while also contributing to budget repair that is fair.”
A Making Superannuation Fairer fact sheet on Labor’s website states that lowering the non-concessional limit to $75,000 would “do a proper job of cutting back opportunities for higher-income earners to gain tax concessions for large annual contributions”, while further lowering the Division 293 threshold would “mean that someone earning $200,000 gets the same super tax concession as someone earning $80,000 – but no more.”
Shadow treasurer Bowen, who arrived after Keneally delivered the speech, was asked by Financial Services Council chief executive Sally Loane whether “a fair bit of tinkering” with superannuation should be expected if Labor wins Parliament.
“There will be changes, yes, absolutely,” Bowen said. “And necessary changes in our view.”
In figures costed by the Parliamentary Budget Office and included in the fact sheet, lowering the annual non-concessional contribution cap to $75,000 would improve the budget by $1.07 billion to 2026-27, while further lowering the Division 293 threshold to $200,000 would save $7.3 billion in the same span.
Keneally took the opportunity to castigate the government’s decision to delay increases to the superannuation guarantee rate.
“Under Labor’s former timetable for increasing the super guarantee, we would have already reached 11.5 per cent on 1 July this year,” she said. “However, with the government’s delays, it is now not set to start increasing until 2021-22 and won’t reach 11.5 per cent until 2024-25.”
She signalled that the opposition would look at bringing forward the rate increase if given the opportunity.
“We believe in increasing the superannuation guarantee to 12 per cent when fiscal circumstances allow,” she said, “which will greatly assist in maximising people’s retirement incomes in the future.”
