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Government gets muchneeded settlement of superannuation policy to show its taking care of business

A SUPERANNUATION deal pruning tax concessions for millionaires today is fuelling the ScoMo-mentum of the Turnbull Government’s recovery plan.

Treasurer Scott Morrison ended today a five-month brawl with Liberals angered by Budget measures that would have reduced the tax-free status of some savings made by millionaires.

The agreement came just when the Turnbull Government needed to boost its record of achievement.

The government has had three significant economic and legislative victories this week it hopes will rebut accusations it has been a do-nothing administration for the 12 months of Malcolm Turnbulls prime ministership.

Earlier this week the government and the Opposition reached agreement on $6.3 billion in spending cuts, the superannuation proposal has been settled internally at least, and Parliament is set to approve personal income tax cuts.

Backbenchers approved the new superannuation package, which removes what they saw as a retrospective imposition, by acclamation today.

The details have been sent to shadow treasurer Chris Bowen and the government argues Labor should give its support to measures it calculates will save about $180 million over four years and help low-income workers.

Mr Morrison will also have to convince the Senate crossbench, and elements of the so-called Liberal base who objected to the original measures in the May Budget. One of those agitators, Queensland MP George Christensen, volunteered his backing for the new plan today.

The original proposal for a $500,000 lifetime cap on after-tax contributions, backdated to 2007, has been scrapped at a cost of $400 million over four years.

It has been replaced by a measure reducing the existing annual non-concessional contributions cap from $180,000 per year to $100,000 per year. Contributions after that will be taxed at 15 per cent.

To offset the $400 million in lost savings of the original proposal, the start date of the proposed catch-up concessional superannuation contributions will be deferred by 12 months to July 1 next year.

And a further $180 million would come from dumping a proposal to harmonise contribution rules for those aged 65 to 74.

Individuals with a superannuation balance of more than $1.6 million will no longer be eligible to make after-tax contributions from July 1 next year. The limit will be indexed.

The changes mean superannuation savers will be able to put up to $125,000 a year into accounts before a tax hit.

The political need for boasting wasnt lost on the Treasurer today when he spoke to reporters.

Today we demonstrate once again that the Turnbull Government is getting on with government, Mr Morrison said.

I think what we have demonstrated this week is that we can get things done in the 45th Parliament.

The government goes to work every day.

Murray goulburn loses 100 million woolworths private label contract

WOOLWORTHS has dumped the supplier of its private label dairy products, in a further blow to troubled producer Murray Goulburn.

The dairy co-operative, which supplies rival supermarket chain Coles with its $1-a-litre milk, outraged farmers when it slashed its farmgate milk price earlier this year.

Now its about to take a $108 million hit, with its annual contract to supply Woolworths private label products including cheese, UHT milk, adult milk powder and cream in tatters.

Bega has nabbed the cheese contract, while Freedom Foods Group will supply the UHT milk.

Murray Goulburn says it will lose $108 million in revenue, but that the impact on its annual results will be limited because it plans to redirect this capacity to other markets overseas.

We believe our tender to retain this business was competitive, whilst balancing acceptable returns for our products given the current environment for our farmer/suppliers and investors, Murray Goulburn interim chief executive David Mallinson said in a statement on Friday.

The co-op has retained the contract to supply private label butter and shredded mozzarella, and its 10-year deal to supply Coles private label milk remains intact.

Murray Goulburn continues to enjoy a strong ongoing relationship with Woolworths and they remain a valued partner for our co-operative, Mr Mallinson said.

I can also reassure our valued consumers that ranging of MGs Devondale and Liddells products are not impacted by this decision and continue to be available at Woolworths nationally.

Murray Goulburn is Australias largest dairy foods company, with annual turnover of approximately $2.9 billion and more than 2500 supplier shareholders.

It has had a tough year since listing on the sharemarket as the MG Unit Trust, with profits downgraded and a public-relations nightmare ensuing when it slashed the price it pays farmers for milk solids in April.

Last month, Murray Goulburn announced its opening price for next season will be $4.31 per kilogram of milk solids the lowest its been since 2009, and well below the cost of production.

A consumer boycott on cheap milk pushed Coles into announcing a new, more expensive home brand that would help struggling farmers.

And a class action is brewing by investors who claim the co-op misled them, Slater and Gordon told the ABC.

The Federal Government has provided loans of up to $1 million or 50 per cent of the existing commercial debt of the business over 10 years to help out farmers.

With AAP