The view from Billinudgel

Super stumble
Tony Abbott’s refusal to fix super rorts for the rich is sheer folly


So Tony Abbott has embarked on another unworkable pledge: there will be no changes to superannuation. Not now, not during the next election, presumably not ever.

This is not only silly in a purely economic sense; his reasoning, such as it is, is so irrational as to suggest that he has repudiated the entire process of government.

Doing something about the soaring cost of the tax concessions on super, overwhelmingly used and overused by the very wealthy, is simply a no-brainer. Within a few years they will overtake the entire pension system. The current position is both unconscionable and unsustainable – even Joe Hockey, just a few weeks ago, acknowledged that something needed to be done.

But alas, Bill Shorten had pre-empted him, issuing a detailed and costed plan to trim the top off the bloated bonanza. So Abbott made a captain’s call: nothing is to be done about it. Leaving super untouched was a promise, and we keep our promises – well, some of them sometimes, anyway.

After all, Abbott had already made the odd change, most notably in knocking off some $600 million from the low-income contribution. But once Labor had mentioned taking away what has become little more than a tax rort at the high end of the scales, super was off the table and would not be mentioned while his government held sway.

Arthur Sinodinos, who seems to be emerging as a sort of Cardinal Wolsey to Abbott’s Henry VIII, called it a strategic decision – meaning, presumably, a political one bereft of any economic rationale. And so it appeared, when Abbott proceeded to ramp up the conflict, accusing Labor of wanting to raid the piggy banks of the nation. It was not the government’s money, he declared, it was yours, and that was all there was to say about it.

But if that is his justification for his stance, he might as well abandon government altogether. Sure, taxing super is, in the purest libertarian sense, taking someone else’s money – but so is every other form of taxation, whether direct or indirect, whether from income, from companies, from imports, from goods and services, from payrolls, from stamp duty – someone always has to pay. That is how government works. Singling out super as something peculiarly sacrosanct is simply specious, and Abbott must know this.

It is an argument that he can never win, and one that has left a gift for Shorten and his shadow treasurer, Chris Bowen. Abbott’s attempted wedge offers them an issue that not only combines budget repair with fairness, but tosses in common sense as well. As Bowen crowed last week, if Abbott wants to make superannuation an election issue, bring it on.

Abbott has yet again hung himself out on a limb making a pledge he can’t, shouldn’t and almost certainly won’t keep, and many of his colleagues are all too aware of his folly. Abbott may want this to be an issue, but the rest of the government most certainly does not.

Once again, what was being hailed as a popular and successful budget is in danger of being pushed off course by the recklessness of the prime minister. When will he – and they – ever learn?

Mungo MacCallum

Mungo MacCallum is a political journalist and commentator. His books include Run Johnny Run, Poll Dancing, and Punch and Judy. Visit his blog, The View from Billinudgel.

Read on

The Rupertvirus

News Corp’s COVID coverage has been a health risk of its own

Image of Taylor Swift

Yours truly: Taylor Swift’s ‘folklore’

The singer-songwriter explores fictional selves on her tender-hearted eighth album

Blind study

When it comes to China’s influence, Australian universities have been burying their heads in the sand for too long

Image from First Cow

Milk it: ‘First Cow’

Kelly Reichardt’s restrained frontier film considers the uneasy problems of money and resources