Industry Super Australia has lent support to the government’s superannuation package due to come before parliament in coming weeks.

“ISA has previously expressed support for the objectives the super measures announced in the 2016 budget sought to address,” said David Whiteley, chief executive of ISA.

Mr Whiteley left room for a political settlement on the reforms as they make their way through the Coalition party rooms in coming days.

“We would expect there might be differences of opinion on individual measures within and between parties in the Parliament. Everyone is entitled to put forward their ideas for improvements but we would urge everyone to act in good faith and find a way to pass these important reforms,” he told The New Daily.

The PM will negotiate

The Prime Minister, Malcolm Turnbull, has laid open the possibility of renegotiating the plan to introduce a $500,000 lifetime cap on after tax or non-concessional super contributions backdated to July 2007.

Mr Turnbull said this week “The only area of controversy relates to the $500,000 non-concessional lifetime cap, which is around $500 million of that $6 billion (total super package). So the vast bulk is broadly accepted, and we have won the arguments on that in a very complex area,” he said.

The shape of the final after-tax cap plan is still unclear. Labor leader Bill Shorten has rejected the original non-concessional cap plan, describing it as retrospective.

He offered a compromise solution that would start the cap at Budget night, May 2 this year, when the reforms were announced.This was rejected by Finance Minister Matthias Cormann.

Dissident Coalition members have called for the cap to be expanded to $750,000 or even $1 million. However, Treasurer Scott Morrison has said he is not prepared to cede too much ground in the party room debate.

Morrison is reluctant

“I find it pretty hard to look my kids in the eye and tell them they’ve got to saddle a higher debt because someone who had a very big income wanted to pay less tax,” he told Radio 2GB last week.

Mr Morrison said if the package was changed alternative measures would need to be found “to make up the other $250 to $550m”,effectively putting a price on any backdown.

Mr Whiteley said the government measures “improve the equity of the system and while the package isn’t exactly how we would design it,  it strikes a reasonable trade off between competing priorities.”

Women will benefit

Mr Whiteley said it was vital that the Low Income Superannuation Tax Offset (LISTO) scheme is retained. It gives up to $500 a year in a government-funded super benefit to those earning under $37,000 and ensures low-income earners don’t pay more tax on their super than on the rest of their income.

Mr Whiteley described it as of “vital importance” as it  benefits more than 3 million Australians – 2 million of whom are women,”

The overall package “improves the equity of the system and while the package isn’t exactly how we would design it, it strikes a reasonable trade-off between competing priorities,”  Mr Whiteley told The Australian Financial Review this week.

Reform of the current system is vital, Mr Whiteley said. “Doing nothing would be a travesty.”

The New Daily is owned by industry super funds.