There are plenty of reasons for Prime Minister Julia Gillard’s huge stumble in the opinions polls, including the (quite reasonable) decision to abandon the budget surplus, pressure over the mining tax, Opposition Leader Tony Abbott’s “small target” strategy and the ever-looming spectre of Kevin Rudd, who continues to declare he does not have designs on Gillard’s job.
But one factor that should not be discounted is the anger growing among Australia’s super army.
The government has made it very clear that its May budget will see some tax concessions for superannuation wound back to help pay for new spending initiatives, particularly the rush of election promises we’ll see as the September 14 poll date gets closer.
But as reporter Matthew Smith explains in this week’s cover story, any cuts will be met with fierce resistance from the electorate and particularly the 900,000 members of Australia’s self-managed super funds, which number almost 500,000.
It’s easy to understand why governments are so tempted by the super honey pot. With well over $1 trillion in the system already and billions more flowing in each year, what treasurer or finance minister could resist scraping off a bit of cream to help plug a budget shortfall?
But the problem is that successive governments have done such a good job of selling the merits of super, which revolve around Australians helping themselves and their country by saving for their retirement.
We’ve been taught to take super seriously – to study our annual statements, to track down the super we might have accrued at that holiday job 10 years ago, to make extra contributions where we can.
This is particularly true of the SMSF trustees who have chosen to take control of their own super. They have a lot invested in their funds, and it’s not just money.
We’ll have to wait until May to find out exactly what the government will cut – although we’ve talked to the experts to get their predictions, and some strategies to protect your portfolio against possible change.
Whatever Gillard and her team decide, the backlash is likely to be swift, loud and potentially ugly for a government already in trouble.
At this stage, the SMSF army remains relatively unorganised, although as Smith explains in his story, the various industry and lobby groups that speak for and service the sector are taking steps to organise the trustees into a grassroots force. But the sheer size of this group cannot be ignored. The SMSF Professionals’ Association of Australia is trying to get together a petition of 500,000 trustees to demand a bipartisan commitment to a “stable and equitable” super system, but it will be fascinating to see if the major parties are willing to do more than just maintain the status quo and actively court these voters.
Maybe not. The Coalition, after all, will face the same budgetary pressures as Labor. Will it be able to resist the super honey pot?