Future indexation key to $3m super cap

Indexation of the Government’s $3 million superannuation tax cap legislation is still up for negotiation to ensure passage of the legislation through the Senate, but key Labor identities are reinforcing that it is matter for future governments, not this one.

Attention was yesterday being directed to comments by the secretary of the Australian Council of Trade Unions (ACTU), Sally McManus who agreed during a television interview that there was a need for indexation, but in the future.

“I do think it’s got to be indexed because you’ve got to make sure eventually people don’t end up there,” she said. “But that’s a very long time in the future.”

In doing so, McManus became one of the latest of a number of people in the trade union movement and the ALP to discuss indexation in the context of future Government decisions rather than something that needs to be baked in now.

The Australian Greens are pivotal to the passage of the Government’s legislation through the Senate and prior to the resumption of discussions with the Treasurer had signalled their support for indexation.

The original authors of Australia’s superannuation guarantee regime, former Prime Minister and Treasurer, Paul Keating and former ACTU secretary at the time of the Prices and Incomes Accord, Bill Kelty, have expressed their concerns about the Government’s approach.

While the Government appears unlikely to relent on the taxation of unrealised capital gains, it continues to acknowledge the possibility of indexation at some point in the future.