Minister Bowen yesterday announced a "Five Year Freeze On Superannuation Changes". Whilst the headline might suggest a wider freeze, a close examination of the wording of the announcement indicates there are limitations.
Firstly the announcement states the government will make no "major" changes, leaving the way open for not-so-major changes.
Secondly, and perhaps most notably, the announcement refers only to a freeze on superannuation tax policy. Changes to tax policy which have an impact on superannuation funds haven't been taken off the table, nor have changes to superannuation compliance policy for example.
Thirdly, the announcement says that the moratorium will be "enshrined" in legislation, which gives the sense that these changes will somehow be entrenched, but in reality there is unlikely to be any impediment against the legislation being amended to remove the freeze in the future.
Finally, although the announcement is welcomed on the basis that adverse changes to superannuation tax policy will not be made, it also shuts down the possibility of positive changes also being made. For instance, there is now no prospect of concessional caps being increased over the next five years, other than as a consequence of statutory indexation.
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