Labor’s super changes set to give Coalition a bigger win

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Labor’s super changes set to give Coalition a bigger win

By Eryk Bagshaw

Labor's plans to reshape women's super are set to all but guarantee the passing of the largest reforms to superannuation in a generation, as the opposition gives its in-principle support to a $6 billion government package that would wipe fees and insurance from low-balance accounts.

The Coalition's "protecting your super package" had been interrogated by Labor before being pushed to a Senate inquiry, but now appears set to pass with amendments for specific occupations despite concerns from industry super funds, which have union links.

The opposition announced it would allow earnings under $450 a month to attract super for the first time on Wednesday in a bid to boost female super balances, but such a policy would have been at risk of being eaten up by fees if the Coalition's broader package was blocked.

Prime Minister Scott Morrison and Minister for Jobs, Industrial Relations and Women Kelly O'Dwyer

Prime Minister Scott Morrison and Minister for Jobs, Industrial Relations and Women Kelly O'Dwyer Credit: Alex Ellinghausen

Shadow treasurer Chris Bowen said he was confident the Parliament, "with Labor playing a constructive role", can reach a good landing point.

"I would hope that we can come up with a sensible way forward to achieve the government's objectives, which we agree with, to reduce or eliminate the impact of fees and premiums on low balances," he said.

Mr Bowen's comments will encourage the Coalition to push through much-needed legislation into the Senate, after August's leadership spill saw its legislative agenda wiped and Coalition senators effectively filibustering their own legislation to keep the Senate running.

The government now has two potential wins at its disposal, the superannuation reform package and a $3.6 billion plan to accelerate already-legislated company tax cuts for small to medium sized businesses, which has the support of the crossbench.

Labor is likely to stake its opposition to only a few components of the full super package, including making sure young workers are defaulted into insurance in higher risk occupations such as construction, but broadly supports the changes.

Deputy Opposition Leader Tanya Plibersek holding 10-month-old Lola Farrell, Opposition Leader Bill Shorten and Shadow Treasurer Chris Bowen holding 7-month-old Paul Phillips

Deputy Opposition Leader Tanya Plibersek holding 10-month-old Lola Farrell, Opposition Leader Bill Shorten and Shadow Treasurer Chris Bowen holding 7-month-old Paul Phillips Credit: Alex Ellinghausen

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Minister for Jobs and Women Kelly O'Dwyer and Assistant Treasurer Stuart Robert said Labor should give outright support for the full legislation.

Once implemented, the package - which the government says will recoup $6 billion for super fund members - would ban exit fees and cap those on accounts with balances of less than $6000, force super funds to offer opt-in insurance to members who are under 25 and transfer all inactive accounts to the Tax Office, before reuniting them with owners.

Ms O'Dwyer said the package would help to stop the rorts in the superannuation sector and provide benefits to the financial security of millions of Australian women, who Labor appealed to on Wednesday.

Labor's $400 million pitch to women would also deliver a top-up super payment to 167,000 recipients of the Commonwealth paid parental leave scheme.

The move, along with removing a 30-year old rule that means people earning less than $450 a month in multiple jobs do not get any super, is aimed at closing an average gap of more than $110,000 between men and women at retirement.

Ms O'Dwyer and Mr Robert are working on a women's economic statement due before the end of spring. It is tipped to consider some of the measures announced by Labor on Tuesday.

Mr Robert declared “the great inequality” of women's super was his “top priority” last week, and said "nothing was off the table" as he and Ms O'Dwyer prepared the $100 million statement.

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