There’s a lot of heat being generated by the shadow cabinet’s decision to reverse its opposition to the increase in the compulsory super levy to 12%, as part of what appears to be a general enthusiasm for spending and disdain for taxing.
People shouldn’t get too carried away. The Coalition has been in this sort of territory before and emerged intact, thanks.
In the 1995 budget, Ralph Willis unveiled a scheduled increase in compulsory super from 9% to 12% and eventually to 15%. It was to be one of the Keating government’s major legacy reforms.
In its superannuation policy for the 1996 election, Super for all, the Coalition, which had hitherto been implacably opposed to Labor’s policies, promised it:
- Will provide in full the funds earmarked in the 1995–96 Budget to match compulsory employee contributions according to the proposed schedule;
- Will deliver this government contribution into superannuation or like savings;
- Reserves the right to vary the mechanism for delivering this contribution so as to provide the most effective and equitable delivery of the funds.
So why don’t we have 15% superannuation now? Because John Howard and Peter Costello nixed it in the 1996 budget barely six months after it released its policy, insisting it was too expensive. They didn’t “vary the mechanism” so much as halted it.
So it’s no biggie for the Coalition to once again promise to honour Labor’s “proposed schedule” to increase compulsory super. It can just ditch the promise once it gets into government, insisting that fiscal circumstances require it.
There’s only one group that the Coalition pays attention to on superannuation: financial planners. They in effect have a veto over Coalition policy, which is why the opposition opposes the government’s efforts to end the rort of huge commissions for financial advice most account holders never seek or use, reflecting the view of many — though by no mean all — financial planners that getting Australians to “opt in” for financial advice will destroy the industry revenue model.
It may be up to the financial planners to put the acid on an Abbott government not to dump the promise it has just made to keep 12%.
Abbott has been like Howard in distinguishing between core and non core promises. I would have hoped that in view of the fuss he made of Gillard’s ‘broken promise’ on taxing carbon he would be more consistent in future, but perhaps that is too much.
It certainly confirms what we already know, the Opposition is an utter shambles on most of the Govts policies, they have no position on anything except NO and merely go with the wind, and are a bunch of economic illiterates
@ david
Agreed. But would it be such a shambles in government? If so, it could be a single term.
Gavin,
I think you can find the answer to your question yourself. Look at the opposition front bench. Gawd help us!
Why is it almost accepted wisdom that someone like Abbott will form government I ask you?
Ooops, ah, yes the polls of course. How silly of me.