Assistant Treasurer Josh Frydenberg is knee deep in budget deliberations. Photo: Eddie JimMajor superannuation changes have been ruled out by the Abbott government, just weeks ahead of the federal budget, further limiting options to rein in the estimated $45 billion deficit for 2014-15.
This comes on the back of Coalition promises to not change negative gearing and the GST, as well as a tumbling iron ore price, making the budget repair job even tougher.
Recent research from the Parliamentary Budget Office found that tax breaks for super account holders cost the budget $6 billion a year in lost revenue.
But Assistant Treasurer Josh Frydenberg, who is one of six ministers preparing the budget, insists super is safe.
“The Prime Minister’s made very clear that we will keep our commitments not to introduce any unexpected or adverse changes to superannuation,” he told Fairfax Media.
“I don’t think you should be expecting any big changes in this budget.”
He said superannuation was likely to be examined in a broader review of retirement incomes before the next federal election.
Mr Frydenberg, who was given the coveted Assistant Treasurer’s job in the December reshuffle, also said the Abbott government has learned from its first budget. That budget became bogged down in controversy, with many measures dumped or stuck in the Senate.
“I don’t think this year’s budget will have the shock and awe that we saw last year,” he says. “And I wouldn’t be expecting as much controversy around some of the measures.”
Mr Frydenberg, who holds Robert Menzies’ old seat of Kooyong in Melbourne, added that the razor gang was “very conscious that budget initiatives need to be able to win support in the Senate”.
When asked if the group could be certain that this year’s measures would get the green light from the Senate and be controversy-free – given reaction to last year’s effort took the government by surprise – he replied, “you can never say for certain”.
“But one of the lessons from last year’s budget is the need to build support among key stakeholders for reform.”
He said this was particularly important in sensitive areas such as health. A large part of last year was spent debating the failed $7 GP co-payment.
Mr Frydenberg would not be drawn when asked to put a figure on what he thought “rich” meant today, noting the term meant “different things to different people”.
But he said Australia needed to be “very careful as a society” on answering the question, “because what sort of society do you want to create?”.
“We shouldn’t seek to denigrate people who achieve success.”
The Assistant Treasurer’s working week is currently dominated by briefing packs on budget proposals and meetings with fellow members of the “gang of six” – Mr Abbott, Deputy Prime Minister Warren Truss, Treasurer Joe Hockey, Finance Minister Mathias Cormann and Social Services Minister Scott Morrison.
“There’s a real opportunity to interact quite closely with my colleagues,” he said.
He described the atmosphere in the room for this make-or-break budget for the government as “very collegial and the decision making is consensus-based”.
Budget meetings are notoriously long and can last into the night. But he said he has not suddenly become more popular with his colleagues who are currently appearing before the committee, arguing for more money for their portfolios.
As a tennis lover (he took a year off between school and university to play full-time in Australia and overseas), the Assistant Treasurer is not getting as much time as he would like at the moment to play sport.
But he is not complaining.
“No one in these jobs should be seeking sympathy. We’re all volunteers, not conscripts.”
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