Treasurer Scott Morrison meet pensioners on his way to deliver his post-Budget Press Club address in the Great Hall of Parliament House, Canberra. Picture: Ray Strange

According to Scott Morrison, it’s to “provide income in retirement to substitute or supplement the age pension”.

That official definition will soon be enshrined in legislation as part of the government’s superannuation reform package announced in last week’s budget.

The changes — largely tax increases on the accounts of wealthy Australians — include reducing the threshold at which an additional tax on contributions kicks in, a $1.6 million cap on the total that can be transferred into “retirement phase” accounts, and a lifetime cap on non-concessional contributions of $500,000.

At the same time, some of that wealth will be redistributed to low-income earners via a superannuation tax offset.

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Leaving aside the debate on whether the measures will apply retroactively, all of these measures are about raising additional revenue for the government — around $3 billion over four years, it reckons — and do nothing to actually reduce dependence on the pension.

“Compulsory superannuation is one of the biggest con jobs ever foisted by government on the Australian people,” a young Tony Abbott told parliament in September 1995.

“The basic objective of compulsory superannuation is that the government is taking our money now so that it does not have to pay us a pension when we retire. The government is making us worse off now so that it will be better off in the future.”

If he were giving the same speech today, he might have changed that to “making us worse off now so that it will be better off in the present”. The future, unfortunately, no longer factors into the equation.

Prime Minister Malcolm Turnbull. Picture: Lukas Coch/AAPSource:AAP

Mr Abbott, as prime minister, on at least 12 separate occasions vowed not to make any adverse unexpected changes to superannuation, according to ABC Fact Check.

In 2013, he said the government should “respect the money that people have put aside in their superannuation savings and they shouldn’t fiddle with it, they shouldn’t tamper with it, they shouldn’t be changing the rules in adverse ways”.

Malcolm Turnbull has denied the changes constitute a broken promise.

“Well, the point is when Mr Abbott said that, he was talking about the term of government he was seeking to be elected to, that all of us were seeking to be elected to, in the 2013 election,” he said.

“We are on the eve of the 2016 election and what we are setting out is an economic plan for voters to approve or not at the 2016 election. This is submitting a new agenda.”

According to Treasury’s own figures, the superannuation system has comprehensively failed to meet its stated objective, with only an additional three per cent of people projected to be weaned off the age pension over the next 40 years.

Over that period, around 80 per cent of older Australians will claim either a full or a part pension, the 2014 National Commission of Audit found.

Former Prime Minister Tony Abbott. Picture: Braden FastierSource:News Corp Australia

Social security and welfare currently accounts for 35.2 per cent of the government’s $450.553 billion spending bill, and income support to seniors is the biggest line item, behind only direct payments to the states and territories.

In 2016-17, the government will spend $45.374 billion on the age pension, with that figure projected to rise to $51.859 billion by the end of the decade. By 2020, total government spending is projected to surge past half a trillion dollars.

In that context, tinkering with caps and concessions in the name of “fairness” is “exactly the wrong starting point”, argues Simon Cowan, research manager with the Centre for Independent Studies.

The focus should be entirely on maximising people’s super balances in retirement. Middle-income earners in particular should be encouraged to pump as much money into their super as possible via lower taxes, he says.

The government has been “cornered into the wrong debate on superannuation”, with all the attention focused on whether the rich get more tax breaks than the poor.

As columnist Henry Ergas wrote in The Australian this week, Labor has framed the debate “to the point where the age pension, whose function was to alleviate poverty, has become the accepted point of reference”.

Centre for Independent Studies research fellow Simon Cowan.Source:News Corp Australia

“Everything else is portrayed as a ‘concession’, as if the superannuation system’s role was not to allow savers to redistribute their own income from the present to the future, but instead to help redistribute income from the people who saved it to those who would like it to spend,” he wrote.

Mr Cowan points out an obvious fact that bears repeating. “The reason high income earners get the most concessions is because they’re earning the most income and paying the most tax,” he says.

“Whatever you think about the equity of giving super tax breaks to people on low incomes, the bottom line is those people are going to be on the pension in retirement anyway.

“There is little benefit in providing that assistance. A far better thing for lifetime low-income earners would be to take them out of the superannuation system entirely.

“We’re taking money away from low-income earners, quarantining it away from them for decades, and then putting them on government support anyway.”

Mr Cowan says the government “brags that 96 per cent of people will be no worse off, yet all their changes will do is increase complexity — they will do nothing to increase the number of people self-reliant in retirement”.

Or as Tony Abbott said in 1995, “Beware! There is no pot of gold at the end of the superannuation rainbow. Any money you put in is your money and you are certain to get back less than you put in’.”

frank.chung@news.com.au