Senior National defends super as inheritance for kids
Keith Pitt says Australians should be able to decide what to do with their super – including passing it on to their children. Photo: AAP
A former cabinet minister has weighed into the escalating battle over superannuation, declaring Australians should be able to spend their nest eggs on their children, a car or a holiday.
Nationals MP Keith Pitt, a former cabinet minister in the Morrison government and the MP for the Queensland electorate of Hinkler, lashed fund managers who he said were “clearly of the opinion that people’s wages paid to them to manage in the people’s interest change ownership at payment”.
“If any Australian wants to work hard and leave something for their kids, so what? It’s their money. Buy a boat, a car, a holiday. It’s their money,” he told The Australian on Monday.
It came after the chief executive of Australian Retirement Trust – the country’s second-largest super fund – backed the Albanese government’s proposed reforms to prevent retirement savings being used as an “inheritance for your kids”.
Bernard Reilly told The Australian a cap on superannuation was a “natural” step. But any limit on balances – along with other major changes to the super system – would need to have a proper transition period,” he said.
Australian Retirement Trust has more than two million members and manages more than $230 billion in retirement funds. It was formed last year in a merger between QSuper and SunSuper.
“The purpose of superannuation is for us to save for our retirement,” Mr Reilly said.
“We save the money and get a tax break to do it in a tax effective way. If you leave it as an inheritance for your kids, that is not what it was designed for … If you think about it that way, then some form of cap becomes natural.”
Opposition treasury spokesman Angus Taylor also criticised Mr Reilley’s comments.
“These are Australians’ savings – not the government’s and not the fund managers’,” he said.
“It’s not the role of government to tell people they can’t give their retirement savings to their families.
On Sunday, Treasurer Jim Chalmers defended possible changes to tax breaks on multimillion-dollar superannuation balances as reasonable measures that wouldn’t alter the fundamentals of Australia’s retirement savings system.
Dr Chalmers said the changes being considered, which could include a cap on large super balances attracting concessional tax treatments, were not “especially controversial”.
He said they were similar in scope to “tweaks” made by the former Coalition government while in office, including changes to superannuation taxes in 2016 that raised $5 billion.
“The fundamentals won’t change – the tax concessionality will still be there, but we do need to consider whether we can afford the degree of tax concessionality for people who’ve got very big balances,” he said.
Dr Chalmers said he hadn’t considered or worked on changes to superannuation taxes for long, but they had consistently been recognised as a pressure on the budget.
He also denied the possible changes to top-end concessional treatment would be the first of many changes to the super system under Labor, as suggested by former Liberal prime minister John Howard.
“I’m not interested in a war of words with John Howard – John Howard is someone who I respect and he deserves better than to be wheeled out to prop up Angus Taylor’s dodgy arguments or to shore up [Opposition Leader] Peter Dutton’s failing leadership,” he said.
But Mr Taylor said Mr Howard had spoken of his own volition and had identified a genuine breach of trust from the government.
“The point he made is this will just be the beginning for Labor,” he said.
Mr Taylor added Dr Chalmers was failing to exhibit “sustainable” spending patterns by pushing $45 billion in off-budget spending through parliament.
“This is just not the right time – we’ve got inflationary pressures, and interest rate pressures, and that’s something that he doesn’t seem to want to talk about if he can avoid it.”
The Greens and key independents, who are needed to pass legislation through the Senate, have said they are open to limiting tax concessions for people with large super balances.
Greens leader Adam Bandt said the party would look at any proposal the government landed on and consider it in good faith.
But he is worried the money saved from winding back tax concessions will be used to fund stage-three tax cuts, which will effectively flatten the tax structure for people earning between $45,000 and $200,000.
Federal ministers have alluded to possible changes to super concessions for months. Discussion ramped up last week with a proposal to enshrine an objective for superannuation into legislation.
-with AAP
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