Yesterday the Government made some key changes to its superannuation tax scheme, after struggling to get the plan through the Senate. Paul Keating says the changes restore confidence in the retirement savings system.

In 2007, in a cynical measure to tie up and buy the “grey” vote before the 2007 election, John Howard and Peter Costello abolished the Keating Government’s “Reasonable Benefit Limits” in superannuation, which placed an upper limit to the tax benefits that could be obtained via the superannuation system.

To play to the “grey” constituency, Howard and Costello provided unlimited tax benefits to be available from superannuation and those unlimited sums of income were then only subject to tax at the concessional rate of 15% – where under the Keating Government RBLs, sums above the limits were........

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