Finance Minister Mathias Cormann addresses the Sydney Institute in Sydney, Tuesday, Aug. 19, 2014.
Finance Minister Mathias Cormann addresses the Sydney Institute in Sydney, Tuesday, Aug. 19, 2014. AAP Image - Tracey Nearmy

Morrison: super changes will not be retrospective

FINANCE Minister Mathias Cormann promised yesterday to consult on the Turnbull government's changes to superannuation, but said "no changes of substance" would be made.

Senator Cormann and Prime Minister Malcolm Turnbull were on the back foot about the changes while on the campaign trail, mainly over a $500,000 cap on lifetime after-tax contributions to super accounts.

Labor leader Bill Shorten and the Liberal Party-leaning Institute of Public Affairs have labelled that change "retrospective", given it would be backdated to contributions from 2007 onwards.

Mr Shorten said the government had "grave questions to answer" about the retrospective nature of the changes.

Denying claims of retrospectivity, Treasurer Scott Morrison has said the $500,000 limit on after-tax contributions will apply only from budget night and people who have already contributed more than that will not be required to withdraw the excess.

IPA's John Roskam said given the new $500,000 cap was backdated to 2007, it was clearly retrospective.

He told the ABC he had spoken to Liberal voters who were "white hot" with anger about the changes.

Defending the change, Sen Cormann told reporters in Canberra it would affect only the wealthiest 4% of Australians. He also said the new $1.6 million cap on after-tax superannuation contributions would affect only Australia's wealthiest, while poorer Australians would get a $500 boost to their super.

However, the Combined Pensioners and Superannuants' Association has criticised that boost, labelling it a simple renaming of the $500 low-income superannuation contribution.

In light of the growing criticism, Sen Cormann promised the government would review the budget's superannuation package if re-elected at the July 2 poll.

But he also said the government would not be making any "changes of substance" to the package post-election and gave no timeline for a review.

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