Abbott a charmer after Robb snub

TONY Abbott yesterday lavished praise on a furious Andrew Robb after freezing his finance spokesman out of the decision not to oppose the government's planned boost to compulsory superannuation.

By InvestSMART · 8 Nov 2011

By InvestSMART ·
8 Nov 2011

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TONY Abbott yesterday lavished praise on a furious Andrew Robb after freezing his finance spokesman out of the decision not to oppose the government's planned boost to compulsory superannuation.

The charm offensive came after Mr Robb signalled that he would speak against the increase in the superannuation guarantee from 9 per cent to 12 per cent within the shadow cabinet on the ground that the Coalition and the country cannot afford it.

"I'm determined that as a government the Coalition will live within its means, but I'm simply not going to be drawn into discussions about internal matters," he said.

Ironically, Mr Abbott nominated Mr Robb's fiscal rigour during his address at a roundtable on the future of manufacturing hosted by the Liberal Party think tank, the Menzies Research Centre.

"Above all else, as my friend and colleague Andrew Robb so often says, we will live and govern in accordance with three principles," Mr Abbott told the gathering, which included Mr Robb.

"We will live within our means we will build on our strengths and we will avoid the manifestations of the nanny state which have been so obvious from this government."

Mr Robb remains angry that he was excluded from a phone hook-up of senior figures on Friday that decided to walk away from the plan to rescind the super boost, which the government has linked to the passage of its mining resources rent tax.

Liberal insiders insist there was no conspiracy or snub and that the normal practice of the leadership group and the spokesman directly concerned in a decision in this case superannuation spokesman Mathias Cormann had been followed.

Earlier yesterday, Mr Abbott defended the decision, which will reduce government revenue by $740 million over the forward estimates because money contributed to super is taxed at a much lower rate than income.

"What we are proposing to do is entirely consistent with the policy of the Coalition over the last decade," he told reporters. "We don't initiate these superannuation changes, but once they're in place we don't roll them back."

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Frequently Asked Questions about this Article…

What decision did Tony Abbott make about the government's planned boost to compulsory superannuation?

Tony Abbott and the Coalition decided not to oppose the government's planned boost to the compulsory superannuation guarantee, which proposes increasing the employer contribution rate from 9% to 12%.

Why was Andrew Robb upset about the superannuation decision?

Andrew Robb was angry because he was excluded from a phone hook-up of senior figures that decided to walk away from a plan to rescind the super boost. He had signalled privately that he would speak against the increase on affordability grounds.

How does increasing the superannuation guarantee from 9% to 12% affect government revenue?

According to the article, the decision to allow the superannuation boost will reduce government revenue by about $740 million over the forward estimates, because money contributed to super is taxed at a much lower rate than ordinary income.

What role did Mathias Cormann play in the Coalition's handling of the superannuation issue?

Liberal insiders said the usual practice was followed by consulting the leadership group and the relevant spokesman directly concerned — in this case superannuation spokesman Mathias Cormann — when making the decision about the super boost.

How is the superannuation boost linked to the mining resources rent tax?

The article explains that the government had linked the superannuation boost to the passage of its mining resources rent tax. The Coalition’s decision involved walking away from a plan that would have rescinded the boost, which was tied to that tax package.

What principles did Tony Abbott reference when defending the Coalition's stance on superannuation?

Tony Abbott cited three principles often emphasised by Andrew Robb: that the Coalition should live within its means, build on its strengths, and avoid the manifestations of a 'nanny state.' He used those principles to defend not opposing the super changes.

Does the Coalition plan to roll back existing superannuation changes?

Abbott said the Coalition doesn’t initiate these superannuation changes, and once they’re in place the party generally does not roll them back — which was part of the rationale for not opposing the boost.

What does this political development mean for everyday investors watching superannuation policy?

For everyday investors, the article suggests greater policy stability on this particular change: the Coalition chose not to oppose the planned increase in compulsory super from 9% to 12%, reducing the chance of an immediate reversal. However, the story also highlights internal political disagreement, so investors should watch for any future policy debate or announcements.