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

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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It has been replaced by a measure reducing the existing annual non-concessional contributions cap from $180,000 per year to $100,000 per year.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.