Malcolm Turnbull softens defence of superannuation changes as backdown looms

Posted by

Prime Minister Malcolm Turnbull with Foreign Minister Julie Bishop. Photo: AAP/Mick Tsikas Defence Minister Senator David Johnston. Photo: Alex Ellinghausen
Shanghai night field

PM Malcolm Turnbull welcomes HMAS Darwin home after seven months in the Persian Gulf. Photo: Michele Mossop

Prime Minister Malcolm Turnbull has softened his rhetoric on the government’s proposed superannuation changes, potentially laying the groundwork for a backdown to soothe ongoing anger inside the Liberal Party.

Mr Turnbull has previously pledged no changes to the “ironclad” suite of proposals on high-end superannuation savings, which conservatives inside the party have criticised as retrospective and argued were a weakness during the election campaign.

The Prime Minister has now signalled that he is listening “very keenly” to the concerns inside his party amid reports that Treasurer Scott Morrison is considering various concessions.

“The reforms are important, but in the implementation and transition, there is work to be done. There always is with tax changes. They will go through the normal cabinet and party room process,” Mr Turnbull said on Sunday.

“We are listening very keenly, I am listening very keenly and carefully to concerns that have been raised by my colleagues, and of course by other people in the community as well.”

He said this consultation was always the case and “technical details” would continue to be addressed by the Treasurer.

Since the budget and intensifying after the Coalition’s underwhelming election performance, conservative MPs have said the superannuation proposals were damaging, in particular the $500,000 cap on non-concessional contributions, backdated to 2007.

Former defence minister David Johnston, who has been freely criticising various policies and the Coalition’s campaign strategy since being relegated to the vulnerable sixth spot on the WA Senate ticket, said the superannuation proposals were a “breach of trust” for which the government had paid a high price.

“Trust is something that politicians have very little of and we’ve burnt a lot of it in this campaign. Moving the goalposts and retrospectively adjudicating people’s entitlements is something that I think is repugnant to the way particularly people in Western Australia relate to Canberra,” Mr Johnston told Sky News.

“I think [Mr Turnbull] needs to reassess the situation,” he said, calling for the backdating of the $500,000 cap to be removed.

Labor’s financial services and superannuation spokesman Jim Chalmers said the Coalition had “made a mess of the changes from the very beginning”.

“The government is at war with itself over super and until that war is over it is impossible the Australian people to judge whether or not to support the original policy or any clean ups,” Dr Chalmers said.

News Corp reported on Sunday that Mr Morrison is contemplating backdowns on the cap, including exemptions for divorced couples, farming families and people who have inherited deceased estates.

The Prime Minister has previously ruled out changing the super policies, defending them as fair and laid out in the budget for all to see.

He has emphatically rejected that they are retrospective and last week said “all of our policies that we took to the election we will deliver”.

“Obviously we don’t have a majority in the Senate and plainly, as you know, there is always debate and sometimes compromise in this place but we took a very clear set of policies to the election, we campaigned on it very clearly, and that’s what we’ll be presenting,” he said last week.

In June: “I’ve made it clear there will be no changes to the policy. It’s set out in the budget and that is the government’s policy.”

Another proposal, dropping the annual limit of contributions taxed at the concessional rate of 15 per cent from $30,000 to $25,000 and from $35,000 to $25,000 for those over 50, has also drawn criticism.

MPs have argued these measures alienated the Liberal Party’s base, depleting their campaign volunteer ranks, scaring off donors and sending conservative voters to minor parties and independents.

Follow Fergus Hunter on Facebook