Simon Crean has completely washed away any lingering notion that he was merely a Gillard stooge in the recent failed leadership spill by openly criticising Labor’s looming changes to superannuation legislation.
The feeling that we are in for yet another policy brawl within the ALP was only exacerbated by a seemingly combative appearance by Dr Emerson on Sky New last night.
The Australian reports Crean’s principled objection to any changes to super today in an article entitled Simon Crean to fight plan for superannuation tax changes as internal rift deepens.
As this article is once again behind Evil Rupert’s Evil Paywall™, I will summarise it for those of you who chose not to pay for your news.
Simon Crean has deepened the rift within Labor over looming budget changes to the superannuation regime, declaring he would oppose any move by the government to tax earnings on super accounts.
Launching an attack on Labor’s inability to frame serious policy debate, the senior party figure would not comment on whether he would cross the floor to vote against any changes.
But he called on the government to explicitly rule out changes that retrospectively taxed earnings generated by super accounts, saying it was “tantamount to taxing people’s retirement surpluses to fund our surplus“.
Mr Crean delivered his ultimatum shortly after Trade Minister Craig Emerson called for a discussion on lifting taxes on the superannuation accounts of the “fabulously wealthy”, highlighting the rift in Labor ranks over values and policy substance after last month’s leadership crisis.
Crean is not the only Labor stalwart who has openly criticised the Gillard Government’s approach to superannuation policy following the recent failed leadership coup, with both Martin Ferguson and Bill Kelty voicing concerns about retrospectively taxing superannuation in order to balance the Government’s faltering bottom line.
Even Bernie Fraser, former Reserve Bank governor, Treasury secretary in the 1980s under the Hawke government and a former voice of the industry super movement, said yesterday
…the government’s rhetoric on class warfare and on foreign workers was divisive and desperate but argued that a “good case” could be made for re-examining super concessions for high-income earners.
“It’s very true,” Mr Fraser said of the criticism. “I share the same concern and frustration as to how Labor has lost its way over recent years compared to the Hawke-Keating years, which were devoted to making the whole country and the whole community better off.”
As many other commentators who are far more qualified than I have pointed out, no “good case” has been made by the Gillard government to tax superannuation, regardless of the respective balances of people’s funds.
Crean continued to not only walk the walk, but talk the talk….
“I will oppose anything that seeks retrospectively to tax people’s accumulated earnings in superannuation,” Mr Crean said.
“..But if the question is the need to ensure the sustainability of the system in the future, then frame the debate properly about what is sought to be achieved and let’s have that debate.
One of the big criticisms I have of this government is that it has failed to frame the debate in its terms. And you are always behind if you fail to frame the debate in your terms.”
Mr Crean would not be drawn directly on whether he would cross the floor but said any attempts to retrospectively target super earnings should be explicitly “ruled out”.
While the article discusses potential changes to the super for what Dr Emerson described as the “fabulously wealthy“, it does note the negatives of any such move..
An alternative strategy would be to increase the tax on contributions to super by high-income earners from 15 per cent to 30 per cent. However, this would not raise as much money.
So it seems it is all about how much money can be potentially raised by increasing taxes on peoples super, as opposed to some noble socialist cause. It was Margaret Thatcher who famously said in 1976 that
…Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people’s money. It’s quite a characteristic of them.
Perhaps we should first start to look for “savings“, as Wayne Swan egregiously describes any proposed changes to taxation, in the extremely generous superannuation entitlements of our top public servants and politicians before they look to raid everyone else’s retirement savings.
As the article suggests
One of the problems with raising the tax on earnings is applying it to defined benefit schemes, such as the generous schemes for politicians and public servants that have been closed to new entrants.
If Wayne Swan is defeated at this year’s election, he is eligible for a parliamentary pension of $168,106 a year.
Julia Gillard, if defeated in September, would be eligible for a pension of $177,520 a year.
A worker not on a defined benefit scheme would need to build up a superannuation lump sum of up to $5.6 million to secure the same amount.
I wonder if Dr Emerson would regard Swan and Gillard as falling into this new class of the “fabulously wealthy“, or is that definition only reserved for those of us that actually work for a living?
Dacka's Razor 