Furious Today Show blow-up as Jim Chalmers backs AWAY from radical superannuation shake-up

Former deputy prime minister Wayne Swan has angrily defended Treasurer Jim Chalmers against accusations he backed away from big changes to superannuation.

Dr Chalmers, who was Mr Swan’s chief-of-staff when he was Labor treasurer a decade ago, on Wednesday appeared to suggest the changes would hardly be radical.

‘We’re not contemplating major changes to superannuation,’ he told Sydney radio station 2GB.

‘We think that there should still be generous tax concessions for people to save for their retirement.’

Chris O’Keefe, 2GB’s drive presenter who interviewed Dr Chalmers, told the Today Show the Treasurer was now backpedaling because ‘this was all blowing up in his face’.

‘It’s typical Labor politics. He flew the kite, saw which way the wind blew, realised the kite was flying back at him and said “I better water this down”,’ he said.

‘That is exactly what happened.’

Mr Swan, who is now the Australian Labor Party’s national president, was livid.

‘With due respect, that’s crap,’ he said. 

‘This is a simple proposal, a very sensible clean-up, but it’s very modest.’

Dr Chalmers on Wednesday afternoon downplayed suggestions the federal government would increase the tax rate on extra contributions to superannuation. 

Super contributions of up to $27,500 a year incur a concessional tax rate of 15 per cent for those earning up to $250,000, with the ultra-low tax rate introduced by former Liberal treasurer Peter Costello in 2006.

The incumbent Treasurer denied he would lower than income threshold to $200,000 for a 30 per cent tax rate to apply, telling 2GB a change is ‘not on the table’. 

Mr Swan defended Dr Chalmers for exploring ways to tighten the rules on early access to super and cap tax concessions for those with more than $3million in their retirement savings. 

Treasurer Jim Chalmers on Wednesday afternoon hosed down suggestions the Federal government will increase the tax rate on extra contributions to superannuation

This concession costs $53billion a year, with wealthier Australians putting money into super paying a concessional rate that is well below the marginal tax rate of 45 per cent for those earning more than $180,000.

Two-thirds of these concessions go to the top 20 per cent of income earners and less than 1 per cent of people have super savings of more than $3million, with that group having an average pool of $5.8million.

Mr Swan, himself a former Labor staffer before being elected to parliament, also denied it was ‘personal’ given Dr Chalmers was his senior adviser, adding lies and distortions on the matter of super ‘don’t reflect well on the people making them’.

O’Keefe bit back, citing his 6,000-word essay in The Monthly on reforming capitalism as a ‘wide-ranging think piece … meant nothing’.

‘It does mean a lot,’ Mr Swan replied.

‘If we legislate the purpose of super, which is for retirement, we protect the retirement savings of millions and millions of Australians, a pretty important thing to do.

‘People like you beat it up. It gets out of proportion.’ 

O’Keefe said Dr Chalmers’ messaging this week had been inconsistent and had scared ‘the living daylights’ out of people concerned about their retirement eggs.

Chris O’Keefe criticised the Treasurer for changing his plan after seeing ‘this was all blowing up in his face’

Today Show host Sarah Abo, who moderated a federal election debate, called for everyone to ‘cool it down a little bit’.

‘This feels like the leader’s debate, I can’t get a word in,’ she said.

Opposition Leader Peter Dutton appeared on the program shortly after and again attacked Dr Chalmers’ plan.

He warned that while the change to tax breaks might just affect the 36,000 people with more than $3million in their super accounts to begin with, ‘with Labor it never stops there’.

‘If Labor runs out of revenue sources, they’ve then got to come after the next rung,’ Mr Dutton said.

‘There’s a lot of Australians who are very aspirational, who work hard, and for many they’ll have drawn down out of their superannuation to pay their mortgage off so they don’t have those payments in retirement as well.

‘People have pumped money into superannuation, and the uncertainty that the Prime Minister is creating I think just shows they can’t manage the budget or the economy.’

Shadow treasurer Angus Taylor accused the government of going back on its election commitment not to make ‘major changes’ to superannuation.

‘This is Australians’ money, not the government’s money to play with. I know Australians feel that very strongly, particularly at a time like this when there is real pressure on Australians’ households,’ he told Channel 7.

‘Money in super should be invested in your interests, not for the government to tax and spend because they have a hole in their budget.’