News Election 2016 Libs ‘white hot with anger’

Libs ‘white hot with anger’

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Free market think tank the Institute for Public Affairs (IPA) is ramping up its campaign against the federal government’s proposed superannuation changes, warning anger among Liberal members is “white hot”.

The government is adamant the measures announced on Tuesday night would not be retrospective but Labor, some within the Coalition and now the IPA dispute that.

IPA executive director John Roskam said emails had been flowing in from members, furious with the proposed changes.

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“Phrases that people have used with me include disappointed, devastated, white hot with anger,” he said.

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The Grattan Institute rejects the idea the changes are retrospective. Photo: ABC

The government has proposed a raft of measures including increasing the tax on super contributions for the wealthy from July next year and for the first time, imposing a $1.6 million cap on the amount of tax-free super savings a person can hold in retirement.

It is also planning to introduce a $500,000 lifetime cap on the amount of after-tax contributions a person can make, backdated to 2007.

Mr Morrison said anyone who had already reached that limit would not be penalised but would not be able to make any further after-tax contributions.

Mr Roskam said that was clearly a retrospective change.

“The law as announced last Tuesday changes the nature of contributions that were made back to nine years ago,” he said.

“For the government to pretend these changes are not retrospective flies in the face of common sense, flies in the face of all legal analysis.”

But the Grattan Institute’s John Daley has backed the Government, saying claims the changes were retrospective were a “furphy”.

“Lots of changes affect investments made in the past, and no one suggests they are retrospective,” he wrote in The Conversation.

“If I bought shares in a company yesterday, I expect that the future earnings on these assets will be subject to my marginal income tax rate.

“But if my income tax rates change, I would not expect that the old tax rate to be grandfathered to apply to all my future earnings.”

Mr Daley said superannuation tax concessions had been “absurdly generous” to older people on high incomes for years and had not served the purposes of the system.

“Misguided claims about retrospectivity should not be used as cover so that this older generation continues to gain unjustifiable benefits that will now be denied to younger generations,” he said.

Foreign Minister Julie Bishop has said the government would be seeking feedback on any “unintended consequences” of the plan, suggesting further changes could be made.

– ABC

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