Treasurer Scott Morrison during Question Time at Parliament House in Canberra, Wednesday, May 4, 2016.
Treasurer Scott Morrison during Question Time at Parliament House in Canberra, Wednesday, May 4, 2016. AAP Image - Mick Tsikas

Free-market think tank slams Turnbull over super reforms

A TOP free-market think tank has slammed the Turnbull government's super-annuation reforms in the budget as setting a "very dangerous new precedent".

The criticism from the Institute of Public Affairs, which has close links to the Liberal Party, came despite retiree and pensioner groups, social services and business lobby groups' backing for the moves.

Treasurer Scott Morrison's first budget will impose a $500,000 cap on lifetime non-concessional super contributions and boost low income super with about $500 for those earning $37,000 a year or less.

It would limit to $1.6 million the amount people can add to their super fund once they draw on it for income, and cap co-contributions at $25,000 a year.

IPA innovation policy director Brett Hogan said: "Every government tax increase, whether on contributions or earnings, or limits on additional money transferred into superannuation accounts, takes money out of the system, reduces retirement balances and sends a message to everybody that their investments may be safer elsewhere.

"It is disappointing that both major political parties now seem to regard people's superannuation accounts as fair game to cover their inability to control their own spending."

Business Council of Australia chief Jennifer Westacott backed the moves, describing the changes as a "sensible approach to finding savings" while focusing on reducing the reliance on the age pension.

Australian Council of Social Services chief Cassandra Goldie also backed the tightening of super tax concessions, but criticised the decision to retain cuts to welfare payments, including the age pension.

"The failure to strengthen revenue is a major problem and this budget reveals the ongoing consequences to essential services and the social safety net," she said.

The head of the Council on the Ageing Australia, Ian Yates, said the overall package of changes was a move back towards superannuation's original purpose

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