Bill Shorten has proposed a compromise on superannuation reform that would deliver a net improvement of $238 million over four years - and $4.4 billion over 10 - to the budget bottom line and deal with concerns that a proposed $500,000 lifetime cap is retrospective.
Labor will also oppose three other superannuation measures in the federal budget that it says will save the budget $1.5 billion over four years and $14.7 billion over 10, according to the Opposition Leader.
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Budget battle begins anew
Mathias Cormann accuses Bill Shorten of being jelly-like as the government pushes its $6 billion omnibus budget bill. Courtesy ABC News 24.
The offer, contained in the Opposition Leader's first post-election speech at the National Press Club, is designed to ramp up pressure on the Turnbull government and test its claim it wants to "reach across the aisle" and work with the federal opposition to repair the budget.
Mr Shorten said the other three changes it will oppose – allowing catch-up concessional superannuation contributions, harmonising contribution rules for people aged 65 to 74 and allowing tax deductions for personal super contributions – were loopholes for high-income earners.
The opposition leader used the speech to challenge Prime Minister Malcolm Turnbull to adopt Labor savings and tax hikes worth $8 billion over four years and $80 billion over a decade that had been previously announced during the election.
Those changes include reforms to negative gearing and capital gains tax ($37 billion over 10 years), cracking down on the private health insurance subsidies ($1 billion), caps on VET FEE-HELP loans and restoring integrity to the system ($7.9 billion) and raising the tobacco excise ($28 billion – a measure the government has adopted already).
The government is very unlikely to adopt the other measures.
The offer to compromise on superannuation comes as federal Treasurer Scott Morrison negotiates with his backbench over lifting the proposed $500,000 lifetime cap on non-concessional contributions to $750,000, but keep it backdated to 2007.
Mr Morrison would not say whether that shift to $750,000 would be made, and that at present he was simply talking to his colleagues about possible changes.
Signalling a line in the sand over the retrospectivity of the currently proposed $500,000 cap, Mr Shorten said that "unlike the government, our changes are prospective – not retrospective. We will not tie the $500,000 lifetime contribution cap to 2007. Instead, our changes will apply from budget night"
"At the same time, I am proposing we lower the threshold for high-income super contributions from $250,000 to $200,000."
That would mean the income threshold at which point the tax on a person's super contributions rises from 15 per cent to 30 per cent would fall from $250,000 to $200,000.
The additional revenue generated by the drop to $200,000 would be $738 million over four years; the net figure is $238 million over four years because of the cost of making the $500,000 lifetime cap prospective.
Mr Shorten said Labor would examine the government's proposed $6.5 billion omnibus savings bill, which contains government-proposed measures that Labor indicated it would back during the election campaign.
The opposition decision on each of those savings measures would be consistent with what it had said during the election, Mr Shorten said - but he stopped short of saying whether Labor would back cuts to the renewable energy agency and to the clean energy supplement.
Sections of the ALP caucus and the welfare lobby are fighting the cut to the clean energy supplement.
ACOSS chief executive Cassandra Goldie said the major parties "should show more concern about people living on $38 a day than those with $500,000 in their super accounts".
"There has been much talk today about 'budget principles', including furious debate over whether a $500,000 cap on super contributions is 'retrospective' and whether $1.4 million will buy a comfortable living standard in retirement. There is a far more important principle: people already living in poverty should not be further impoverished," she said.
"We welcome Labor's rejection of wasteful new superannuation tax breaks for high-income earners but don't understand how they can oppose a $500,000 cap on contributions for wealthy people and yet still contemplate a $4 to $7 a week cut to social security payments for unemployed people and pensioners."
Earlier on Wednesday – before Mr Shorten's super proposal – Mr Turnbull said his government wouldn't support Labor's $8.1 billion list of proposed budget savings.
"He is asking us to support things that we have previously opposed and the reason we oppose them is because they are additional taxes on investment," Mr Turnbull told reporters in Sydney.
with AAP
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