Election 2016: Super changes bad policy, bad politics

Election 2016: Super changes bad policy, bad politics, by John Roskam.

Exit polling from Saturday’s election revealed 37 per cent of voters rated the Coalition’s superannuation tax increases  a “very important” election issue.  It was the fourth most important issue behind Medicare, education and the budget.  Superannuation came ahead of changes to negative gearing, and two issues that were supposedly Coalition policy strengths – building unions and company tax cuts.

The Coalition’s superannuation tax increases announced on budget night in May were bad policy and bad politics. It’s now obvious that Malcolm Turnbull and Scott Morrison got superannuation very, very wrong.

At a policy level, the Coalition’s proposals could have the effect of in the long term putting more people on to the government age pension. Individuals will make the entirely rational assessment that if both parties are willing to change well-established rules and levy higher taxes on it, then superannuation is not a safe investment.  This is particularly the case when the rules are changed retrospectively – which is what happened.

The politics of superannuation is what we saw unfold on Saturday night. The claim by its strategists that the Coalition could raise taxes on superannuation with impunity because only the “rich” were affected has exploded.

Significantly the exit polls show superannuation was regarded as a very important issue by a higher proportion of Labor supporters (38 per cent) than Coalition supporters (36 per cent). … Anecdotal evidence from around the country was that large elements of the “base” declined to donate their time or money to the campaign. …

The political symbolism of the Liberals increasing taxes on self-funded retirees was diabolical. Ever since Menzies founded the Liberal Party, one of its fundamental tenets has been that those that work, and save, and plan for the future should be encouraged.

Australian federal election 2016: Malcolm Turnbull faces superannuation backlash as postmortem begins, by Michael Gordon.

A strong Liberal Party supporter, Mr Roskam said the superannuation debate had now morphed into a much bigger discussion about “why the Coalition was proposing higher taxes and more government spending” during the campaign.

“If you have two parties who are proposing higher taxes and higher spending, it’s most likely that people are going to vote for the party that genuinely believes in higher taxes and higher spending.”

Opponents of the Coalition’s superannuation changes insist they changed votes, reduced donations to the Coalition and diminished the Liberal Party turn-out at polling booths. …

Tasmanian Senator Eric Abetz, who lost his cabinet position when Mr Turnbull replaced Tony Abbott as prime minister, agreed, saying: “The issue of superannuation is very dear to the core base of the Liberal Party.

“To have the certainty of that being compromised did send shock waves through that sector of the community that are our core supporters.” Another MP who declined to be named said the issue “really hurt the Liberal party base”.

hat-tip David Archibald