Wong rounds on Abbott’s ‘reckless’ super remarks

April 7th, 2013

Peter Nolan

Updated

April 07, 2013 17:25:58

Photo:
Penny Wong says the Opposition Leader is a “one-man wrecking ball” (AAP: Alan Porritt)

Federal Finance Minister Penny Wong has lashed out at Opposition Leader Tony Abbott for linking the Government’s superannuation changes with the crisis in Cyprus.

On Friday, the Government announced a series of superannuation reforms, including a 15 per cent tax on superannuation earnings over $100,000 – a measure it says will affect 16,000 high-income earners.

That day, Mr Abbott told a meeting of superannuants that “every time a government raids people’s funds there are shades of Cyprus about it”.

People with large deposits in Cypriot bank accounts are facing a levy as part of a bailout agreement for the debt-ridden nation.

This morning Senator Wong criticised Mr Abbott’s comments.

“He behaves as a one-man wrecking ball,” she told Sky News.

For all my criticisms of Howard and Costello, can you imagine John Howard trying to damage confidence in the economy and in superannuation to make a political point?

“This is a man who wants to be prime minister of the country making economically reckless statements.

“For all my criticisms of Howard and Costello, can you imagine John Howard trying to damage confidence in the economy and in superannuation to make a political point?”

Prime Minister Julia Gillard had earlier attacked Mr Abbott over the remarks, saying he is an “economic simpleton” and labelling his comments “a crazy statement that no person of reason could make”.

Speaking from a business forum in China yesterday, she said the situation in Cyprus is a genuine moment of economic crisis.

“And to toy with that as if it is a political slogan is a grossly unacceptable thing to do,” she said.

This morning Mr Abbott rejected her criticism, saying the Prime Minister should not be using an overseas trip to make comments about domestic matters.

“The extreme language of the Prime Minister is unworthy of that great office and I’d back the economic record of the Coalition against that of the Labor Party any day,” he said.

Superannuation changes

From July 1 2014, earnings on superannuation pensions and annuities of more than $100,000 annually will be taxed at 15 per cent, instead of being tax-free.
Superannuation earnings below $100,000 a year will remain tax-free and this threshold will be indexed to the Consumer Price Index.
The change will not apply at the accumulation stage.
The Government says around 16,000 people will be affected by this reform, which will save around $350 million over the four-year forward estimates period.
From 1 July 2013, people aged 60 and over will see increased concessional caps from $25,000 to $35,000.
Excess concessional contributions will be taxed at the individual’s marginal rate, plus an interest charge.
The Government says this will mean individuals are taxed on excess concessional contributions in the same way as if they had received that money as salary or wages.
The Government will establish a Council of Superannuation Custodians.

“The Coalition government of which I was a senior member delivered the four biggest surpluses in Australian history.

“This Government has given us the four biggest deficits in Australian history and there are now deficits stretching out as far as the eye can see.”

Mr Abbott says the Government has broken two earlier promises on superannuation – never to tax payments of those over 60 and undertaking to lift the concessionary contributions cap to $50,000.

“You just can’t trust this Government. There is nothing that they say, no commitment that they make that they won’t break when it suits them,” he said.

But he was not committing a future Coalition government to any particular superannuation measure just yet.

“What we will do is make no unexpected adverse changes to superannuation,” he said.

“What we are saying is that we want to make it easier for people to invest in their retirement and we will do that but we will do that in a responsible way.”

The Government says the super reforms will save around $900 million over the four-year forward estimates period.

At a rate of return of 5 per cent, it expects the change will only affect people with more than $2 million in superannuation assets.

Asked if she could rule out any further changes to superannuation, Senator Wong said: “I can tell you what our policy is and our policy is the one announced.”