A re-elected Labor government would not make changes to the taxation of superannuation for five years, Treasurer Chris Bowen says. Labor said the proposal would promote "confidence and stability" in the $1.6 trillion retirement savings sector, which is expected to swell over the next decade as the compulsory super guarantee rises from 9.25 per cent of Australians' pay to 12 per cent.
The announcement is a win for the super industry, which has been calling for super to be left untouched for up to 10 years - an idea once dismissed as unrealistic by former superannuation minister Nick Sherry.
Labor on Wednesday said it would make no changes to the taxation of super before the election, and it would legislate the five-year freeze if it won.
"Australians are living longer. They need to feel that the superannuation system is fair and reasonable, and that the superannuation policy is removed from the political cycles for genuine confidence in the system to build," Mr Bowen said.
The industry recently criticised the opposition for its plans to defer the increase in the super guarantee to 12 per cent by two years.
Alex Dunnin, director of research at super research firm Rainmaker, said the announcement showed "how sensitive the government is on the issue".
"Trouble is, I'm not sure if anyone will believe him [Bowen], especially as it seems to be a proposal for a law that will stop government changing the law. It's a bit like other laws that governments pass telling us we should follow other laws," Mr Dunnin said.
The government and parts of the super industry engaged in a public brawl over its plans to curb tax concessions on super for high-income earners earlier this year.
Financial Services Council chief executive John Brogden, representing retail super funds and fund managers, in April threatened to conduct an industry campaign against any adverse changes to the taxation of super.
With Treasury estimating that super concessions cost $32 billion a year, rising to $45 billion in 2015 - figures contested by the industry - Labor that month announced mild changes to super.
Mr Sherry argued last month that no government would quarantine an important sector, such as super, from reform.
Now a senior adviser at Citi and Ernst & Young, Mr Sherry said: "I don't think it matters who is in power, no government is going to say, 'We are going to put away superannuation and retirement funds policy and have no change for five to 10 years.' "
Super had a bumper 2013 financial year, with the average balanced fund returning 15.6 per cent. The median super fund has grown by 10.5 per cent since the depths of the global financial crisis.
Labor pledges five-year freeze on super taxes
A re-elected Labor government would not make changes to the taxation of superannuation for five years, Treasurer Chris Bowen says.
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