Next Saturday, 2 July 2016, Australia will go to the polls to elect a new House of Representatives and a new Senate.
The 2016 election is only the seventh election initiated by a double dissolution since Federation. The last double dissolution election was held in 1987 by the then Hawke Government; following the rejection of the legislation to introduce the ‘Australia Card’.
However – by now most Australians will be growing tired of what has been a long, drawn-out election cycle that has run for almost two months.
Back on 3 May 2016 the Coalition government brought down its 2016 budget. It included a number of announcements regarding superannuation (super) and a re-alignment of the – very generous – tax concessions available to super funds and their members away from the wealthier members of our community; to those on low and middle-range incomes.
Of course – the budget had its critics. Moreover some of the changes announced were quite detrimental, such as the retrospective nature of a proposed lifetime limit on non-concessional contributions. However, the budget did contain some very positive announcements that will make super more accessible to Australians.
Much of the recent conversation surrounding the super changes announced in the budget has tended to focus on the negative (rather that the positive) but then – that’s human nature!
While the Coalition has made its intentions clear on what changes it plans to make to super if re-elected – these formed the basis of the 2016 budget after all – it appears there may be some ‘wriggle-room’ left for negotiation if re-elected.
Only time will tell.
But perhaps more interesting is the position currently being taken by the Labor party.
Labor’s super policy revolves around two key items:
Taxing income of super funds in the pension phase; where the income exceeds $75,000 per person.
Reducing the income threshold for ‘Division 293’ (the additional tax paid by high-income earners on super contributions) to $250,000, from the present $300,000.
The first measure is similar, but different, to the Coalition’s proposal to limit pension account balances to $1.6 m per person. While the second measure is identical for both parties.
What is perhaps more interesting is Labor’s recent announcement that they will be ‘banking’ the tax savings generated by the Coalition’s changes to super policy, while not necessarily adopting their policies.
It appears that Labor will adopt the Coalition’s super policies that generate tax savings. I hope that they will also adopt the more positive super announcements contained in the budget if elected.
I suspect Labor will limit the amount of non-concessional contributions a person can make during their lifetime (perhaps in line with the Coalition’s limit of $500,000) but without the retrospective element and this may limit concessional contributions. Labor’s spokesperson recently stated that, if elected, they will negotiate with the super industry before introducing legislation.
From where I sit it appears the two major parties are going into the election with very similar super policies. However – only time will tell what will eventually be passed into law.