The Turnbull government’s control of its superannuation reform package is slipping, with the draft legislation released on Wednesday leaving out all contentious measures that would help with its budget repair pledges.

In the past two months, outspoken Coalition dissidents like Senator Eric Abetz and George Christensen have been calling for changes to the planned lifetime $500,000 after-tax contributions cap, a measure widely unpopular with Coalition party members.

“Super shambles”, says Katy Gallagher. Photo: AAP

This was viewed to be the most contentious measure within the Coalition parties.

Where were the nasties?

However, when the legislation was released on Wednesday, it not only excluded that measure, but all of the other revenue-raising measures in the reform package.

Labor’s superannuation spokeswoman Katy Gallagher described the government’s policy as a “superannuation shambles”.

“We’ve had backbencher after backbencher lobby against these reforms. We’ve had the humiliating sight of the Treasurer having to do a national tour of backbenchers around the country arguing for the reforms that were released publicly in May.”

Missing in action

However when the legislation appeared, “the significant reforms and the reforms that will assist with budget repair are all missing in action as they can’t be agreed to by the government”, Senator Gallagher said.

Treasurer Scott Morrison did not respond to questions from The New Daily.

But in a press conference, he said the negotiations over super would not be resolved quickly.

“I am continuing to consult with my colleagues. This is complex legislation and those elements of the package will be released in coming weeks and months as they are finalised.”

No decisions yet

A Liberal Party insider confirmed to The New Daily that the measures not put in the legislation are still up for discussion within the party.

“No decisions have been taken yet,” the source said.

Party room discussions will take time. Photo: AAP

“Discussion is very broad within the party as a number of people have different views in different areas.”

That means that a number of measures not thought to be up for negotiation, in fact are.

These include the cutting of concessional or pre-tax contributions to $25,000 a year from $30,000, or $35,000 for those over 50 and the proposed $1.6 million cap on tax-free earnings for funds in pension mode.

Those measures have created less audible concerns in the Coalition backbench than the after-tax lifetime cap, but are still controversial in the party room.

More surprising is that the taxation of transition-to-retirement pensions and changes to death benefit arrangements that would together earn the budget $475 million remain in contention.

Budget danger in negotiation

Super sands could slip away. Photo: Getty

The danger the government faces is that it has given away $1.6 billion in measures in the draft legislation. If it has to negotiate away significant revenue measures in the party room, then the gains from the whole package could be easily eroded.

How delicate those revenues are is demonstrated by Treasury costings on Labor’s proposal to start non-concessional caps from May this year rather than July 2007 as the government plans.

That proposal would mean that instead of earning $250 million for the budget, the figure would be only $20 million.

These are the measures

The draft legislation contained the following measures:

• The right for all workers to make concessional contributions regardless of their employment arrangements – cost $750 million

• Allow those between 65 and 74 to make super contributions without passing a work test – cost $50 million

• Extend the low income superannuation offset that allows those earning less than $35,000 to pay no more tax on super than on their incomes – cost unclear

• Low income super tax offset – cost $800 million

• Make it easier for people to make super contributions for a low income spouse – cost $5 million

• Define the purpose of super as being to provide income in retirement that substitutes or supplements the age pension – no cost