Treasurer Chris Bowen said the freeze, which is effective immediately, would be enacted in legislation by a re-elected Rudd government.
Speaking at the Financial Services Council annual conference in Brisbane yesterday, Mr Bowen said the Superannuation Council will produce a discussion paper about changes to superannuation every five years.
“The discussion paper will be released for extensive consultation; the Super Council will then make recommendations to be [enacted] … Once any changes arising out of that process are legislated, there will be a further five year moratorium on further major taxation changes,” said Mr Bowen.
Mr Bowen also confirmed that any changes to the superannuation system that have already been announced will stand.
Financial Services Council (FSC) chief executive John Brodgen went as far as to claim credit for the announcement of the five-year moratorium.
“Treasurer Bowen’s announcement today is consistent with the FSC’s repeated public calls for a five-year moratorium on changes to the superannuation system,” said Mr Brogden.
The FSC has called for the inter-generational report to be released every five years, and then used as a basis for any changes to superannuation, he said.
Association of Superannuation Funds of Australia chief executive Pauline Vamos welcomed the news, and noted that both major parties are now committed to not making any major changes to superannuation – at least in the next parliamentary term.
Industry Super Network chief executive David Whiteley said superannuation should be discussed outside of Budget and electoral cycles.
“Constant changes to the taxation settings can diminish community support for compulsory super, so it’s important that future ‘tinkering’ is kept to a minimum,” he said.
Mr Whiteley was particularly pleased that the low income earner’s tax concession was now locked in.
SMSF Professionals’ Association of Australia (SPAA) chief executive Andrea Slattery said the announcement meant that people would no longer be disincentivised to contribute to their superannuation.
“Several recent reports that SPAA has commissioned have graphically illustrated that people’s confidence in the system is being undermined, and this commitment to not change superannuation tax policy by the government and Opposition should help reverse this sentiment,” she said.
But Mathias Cormann, shadow minister for financial services and superannuation, said Labor could not be trusted on superannuation.
He pointed out that Prime Minister Kevin Rudd said in 2007, less than two weeks before the election, that there would be “no change to superannuation laws, not one jot, not one tittle”.
“Kevin Rudd from the 2008 Budget onwards initiated a massive ramp-up in taxes on superannuation,” said Senator Cormann.
“He and his now treasurer, Chris Bowen, initiated or supported almost $9 billion of tax increases targeting people’s retirement savings already,” he said.
Responding to Mr Cormann during his FSC address, Mr Bowen said:
“I invite minister Cormann to adopt the governemnt’s policy, otherwise he’ll fall short in terms of providing consumers certainty.”
