The Australian Labor Party has appointed Kevin Rudd, for the second time, in a move that it hopes will stop a landslide election defeat. But what, if anything, will it mean for superannuation policy?
Superannuation impact
The answer to that question is: probably nothing. But it may decrease the chances of a Coalition government.
Switzer expert Paul Rickard says: “The chances of Labor being returned, though unlikely, may have improved. Although we felt the ‘tax on pension incomes’ was dead (this was announced on 5 April, but never legislated) – there may be a chance that this is revisited.”
And if the election date is delayed till the latest possible date – i.e. late November, Parliament will get another sitting.
“Perhaps legislation is then introduced for this tax on pension income,” Rickard says.
“Shorten will survive, and given the cabinet changes, may even end up with a promotion. There could be a new minister responsible for superannuation.
“Notwithstanding the points above, the most likely outcome is a new Government later this year and no further changes to superannuation in the intervening period,” Rickard explains.
At least one of the government’s superannuation policies – The Tax Laws Amendment (Fairer Taxation of Excess Concessional Contributions) Bill 2013 and Superannuation (Excess Concessional Contributions Charge) Imposition Bill 2013 – has already been passed.
This legislation, which was announced in April, means individuals will no longer be harshly penalised for exceeding the concessional contribution limits for superannuation and will have the opportunity to withdraw excess contributions made by mistake. It is effective from 1 July.
Economic impact
Of course any impact on business confidence and the economy will have a flow on effect to superannuation through the markets.
“A possible implication of this leadership change, is that it could reduce the business confidence and investment bounce that I was expecting after the election,” Peter Switzer says.
“I have always thought a landslide victory to the Coalition would be received well by business and financial market investors – both local and importantly international – which would help our SMSF’s bottom lines.
“Though I still expect a Coalition victory, I believe Rudd will win back some bewildered and lost Labor voters, and this will shore up the Party as a more effective opposition, which could be good for Parliament.”
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.
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