For some reason, that always seems to evade me, the end of the calendar year is often referred to as the ‘silly season’.
Apparently the term has its roots in the media, and refers to that time of the year when news is slow and the media is reliant on publishing ‘fluffier’ news stories to fill their pages.
However, as the ‘silly season’ coincides with the summer season in the southern hemisphere, it is more akin to that time of the year when our calendars fill up with social engagements – often accompanied by an occasional refreshing beverage or two (or five!)
So – allow me the indulgence of putting my own slant on this well-used phase. I will call it the ‘super silly season’. And it has nothing to do with ‘super’ fluffy news stories, or the increased consumption of alcohol (although it might drive you to the later).
If we look back over the past four months; things have been tumultuous on the political front in Australia.
It all started in May 2016 with a federal budget that was brought forward by one week. The budget included some of the most radical changes to superannuation in the past 10 years.
A week later we saw the parliament being dissolved and the nation was then thrust into one of the longest election campaigns in living memory.
And if that was not bad enough – the election result were so close that it took many weeks before a new government could be formed.
And on 30 August (almost four months after the budget was brought down) the new parliament sat for the first time.
The coalition government now has the dubious task of trying to get the measures announced in the May 2016 budget passed by both houses of parliament.
The superannuation budget announcements can loosely be described as ‘the good, the bad, and the just plain ugly’. There will be winners, and there will be losers.
However, at the end of the day (apart from one or two surprises) the superannuation reforms mentioned in the budget were not all that unexpected.
The government has now released a draft bill that addresses some of the least controversial of the budget’s superannuation measures for public consultation.
These measures include:
- Enshrining the objective of superannuation into legislation: The objective is that superannuation should provide income in retirement that substitutes or replaces the age pension.
- Allowing greater access to a tax deduction for personal super contributions: Currently only those who derive less than 10% of their income from employment can claim a personal tax deduction. The budget announcement intends to remove the 10% limit – making access to a tax deduction more broadly available.
- Increasing access to super for older Australians: By removing the requirement that people aged between 65 and 74 need to meet a work test before they can make contributions.
- Increasing access to the spouse tax offset: By increasing the income threshold – thereby allowing more people to make superannuation contributions for their eligible spouse.
- Introducing a low Income superannuation tax offset: Which effectively replaces the Low Income Tax Offset that is due to cease as of 30 June 2017.
Each of these measures fall within the ‘good’ category. But as it happens – ‘good’ usually means that the measures will result in a cost to the government rather than a saving.
Perhaps (not unsurprisingly) the opposition has stated they will not be supporting the second and third measures mentioned above.
Even though they come at a cost to the public purse – each measure is very positive.
Over the coming months I expect to see lots of posturing by politicians of all persuasions as they pursue their particular legislative agendas. No doubt there will be some who will oppose good measures simply because they can (in order to make a political point) irrespective of whether their position it is in the best interests of the country or not. There will be others wishing to make valid points who will be silenced into submission so that they support the party’s position, or simply because nobody is interested in their point of view.
Hopefully the government will gain the support it needs from the cross-benchers in the senate, and these measures become law well ahead of their planned implementation date of 1 July 2017.
Then the exciting part starts as the government commences the process of introducing legislation, for some of the more ‘controversial’ of their budget superannuation announcements, into parliament.
The next few months will be a very ‘super silly season’ indeed. Let’s just hope that common sense, and a competent government, prevail.
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