While it’s possible to bet on many permutations for the federal election – will it be a hung parliament (the bookies odds suggest no); will Pauline Hanson be elected (bookies say no); will Labor win (bookies say no) – they’re not offering odds on the one bet I wouldn’t mind taking.  If I were a betting person, I’d be putting something – not quite a whole house, negatively geared or otherwise, or my super – on the Coalition’s superannuation policy not going into law next year in its current form.  Not that I’m expecting too many changes, just some tinkering at the edges for those intending to retire in the next few years.  Related: Explainer: what Julie Bishop didn't know about superannuation  I’d also like to bet that the foreign minister, Julie Bishop, is an expert on transition to retirement policy by now – oh, and that Neil Mitchell from 3AW is among the 4% of wealthy Australians who will be affected by the “detrimental” changes made.  There were 10 major changes to Australian superannuation announced in the budget and all of them are designed to meet the government’s now explicitly stated objective for superannuation – that’s “to provide income in retirement to substitute or supplement the Age Pension”.  The treasurer, Scott Morrison, is so keen on this objective that he’s promised a re-elected Turnbull government will enshrine it in law. It’s about time a federal government clearly stated that superannuation isn’t about “tax-lite” wealth accumulation for a small proportion of Australian retirees.  But it’s the three meaningful constraints (or caps) on future super that have caused the most outrage – a lifetime cap of $500,000 for all non-concessional (after-tax) contributions made since 2007, in force from budget night; a cap of $1.6m on the overall pension balance; and a $25,000 per year cap on future concessional (before tax) contributions, both applying from July 2017.  The $1.6m cap will be indexed to CPI and the $500,000 lifetime limit will be indexed to wages growth.  The changes aren’t retrospective and they don’t break any promises.  Anyone waking up on 3 July 2017, in the delightful position of having a re-elected Coalition government and with more than $1.6m in their pension account can transfer it back to their accumulation account where the income will continue to be taxed at 15% or they can transfer it out of their super completely, where presumably the income will also be taxed.  Anyone with more than $500,000 in contributions on 3 May 2016 won’t have to withdraw it, but, after that, the ATO will notify individuals to withdraw payments that take them over the limit or pay penalty taxes. And from July 2017, income from assets supporting a transition to retirement income stream will be taxed at 15%, but the income stream will remain tax-free.  So the “adverse” change is the future tax treatment of some aspects of superannuation. That doesn’t fit my definition of retrospective.  One self-funded retiree commented to me recently that the tax treatment of superannuation has been “too good to be true”. Labor, bizarrely, would set up a two-tier system – the “too good to be true” system would continue for those already in the system with harsher taxing on those who are yet to retire.  The Coalition policy will bring in $2bn a year in revenue; Labor’s would net $500m.  Those running the broken promise argument quote then opposition leader Tony Abbot in April 2013, well before the September 2013 election, saying: “The commitment that I give is that there will be no unexpected adverse changes to superannuation under a Coalition government.” It’s not sophistry to point out that Abbott meant “election commitment”, specifically “2013 election commitment”, nor that, in 2015, Abbott told the Australian Chamber of Commerce and Industry there would be no unexpected changes “in this term”. By 3 July 2016, there will have been two elections since the “promise”.  Interestingly, Morrison’s superannuation package has been clever enough to leave the left with little to complain about apart from its “unfairness” to the top 4% of self-funded retirees.  Related: Coalition continues to face pressure over superannuation policy - live updates  There are some terrific measures in this package: an effective end to the link between work and super allowing anyone up to 75 to make tax-free deductions up to $25,000 a year, not just wage earners; tax offsets for people contributing to their partner’s super where the partner earns under $37,000; a catch-up provision allowing anyone who can’t contribute $25,000 in concessional contributions every year to roll over this entitlement up to $125,000 for five years, a plus for those with broken careers such as women and the self-employed.  Women will also benefit by the change that gives a low tax offset for those earning less than $37,000 – two-thirds are women.  While some measures are a bit helpful to women, especially those on low incomes and with obliging well-paid partners, the superannuation system will remain heavily skewed towards those in consistent long-term employment.  But the biggest issue is for the late starters: men and some women who were planning to pump large sums into their super just before they retired. Typically these are 50-plus self-employed or business owners who were intending to finance their retirement by the sale of the business. Until budget night, they could contribute $180,000 a year (or $540,000 over three years) to build their balances as high as they liked.  With a $500,000 lifetime cap on non-concessional contributions, building your superannuation pot to the magic $1.6m in time relies on steady pre-tax contributions and income generated over time. It will be next to impossible for the late starters.  Expect some very loud complaints – and some transitional tinkering!
The Turnbull government has made a clear statement about the purpose of the superannuation system – this should be welcome news for everyone