George Brandis (Queensland, Liberal Party, Attorney-General) Share this | Hansard source

I should emphasise that in no significant respect do the enhancements affect the design features of the arrangements announced during the election. They make no difference to the fiscal outcome of the package and, as Senator Cormann says, they constitute improvements to the arrangements already announced. Thank you, Senator Gallagher, for giving me the opportunity to explain them to the Senate.

First of all, the $500,000 lifetime non-concessional cap will be replaced by a new measure to reduce the existing annual non-concessional contributions cap from $180,000 per year to $100,000 per year. Individuals aged under 65 will continue to be able to bring forward three years worth of non-concessional contributions in recognition of the fact that such contributions are often made in lump sums. The overwhelming bulk of such larger contributions are typically less than $200,000. Individuals with a superannuation balance of more than $1.6 million will no longer be eligible to make non-concessional after-tax contributions, from 1 July 2017. This limit will be tied and indexed to the transfer balance cap.

The second enhancement or improvement to the policy is this: in order to fully offset the cost of reverting to a reduced annual non-concessional cap, the government will now not proceed with the harmonisation of contribution rules for those aged 65— (Time expired)