Last time round it was interest rates – a
song that won’t play as sweetly next time with the electorate remembering
interest rate rises under Howard/Costello. How politically brilliant then to be
able to suggest to Australia’s three million baby boomers that they can’t trust
Labor not to start taxing their superannuation payouts again, or penalising
lump sums.

I can almost hear it now – just months
after the tax-free super payments start flowing in 2007, the coalition will be
telling those three million voters about how Labor introduced the tax on super
contributions and doesn’t want people to have the lump sum option. It should
play very well indeed.

Stephen Mayne yesterday seemed to
misunderstand my whinge about this particular reform – I’m all for encouraging
superannuation and reducing the tax grab, but it would be better long-term
policy to do it either at the start or the middle, not at the end of the
process.

Costello’s public justification for lifting
the tax on payments is that scrapping the evil Labor tax on contributions would
be too complicated and the existing barrage of treatments at the payment stage
is too complicated too. So he’s taken the easy path rather than the best one,
which pretty much sums up the Government. The big baby boomer bribe also
happens to be politically most advantageous, which also pretty much sums up the
Government.

The main winners from the rebirth of the
lump sum? The legion of financial planners who will be released from the
constraints of allocated pension products and the like, enabling them to flog
whatever financial products offer the highest commission.

Property spruikers also should receive a
shot in their bank accounts. Just watch the white shoe brigade line up to tell
retirees with lump sums that they can use it as a deposit on a unit off the plan
while repeating the usual lie that residential real estate is better than
shares.