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Morrison avoids backbench super revolt

AAP logoAAP 14/09/2016 Colin Brinsden, AAP Economics Correspondent

Treasurer Scott Morrison believes there is nothing standing in the way of Labor supporting the government's revised package of changes to superannuation tax concessions.

The government on Thursday bowed to internal pressure by dropping a significant measure from its initial package unveiled by the treasurer in his May 3 budget and spruiked by the coalition in the lead-up to the July 2 election.

In what Labor described as a "massive capitulation", the planned $500,000 lifetime non-concessional cap on fund balances, backdated to 2007, has been dumped.

The controversial measure, which sparked an angry backlash from sections of the Liberal party in the run-up to the federal election, will be replaced by annual cap of $100,000.

CPA Australia chief executive Alex Malley believed the $500,000 cap was alway too low and backdating it to 2007 was particularly "egregious".

"It's taken a while for the message to sink in, but it is nonetheless a positive first step," Mr Malley told AAP on Thursday.

Cassandra Goldie, head of the ACOSS welfare group, said the changes were sensible, "if modest".

The new plan still allows a fund member to bring together three years of non-concessional contributions in any given year.

"(It) undermines the intent of the lower annual cap, and will overwhelmingly benefit high-income earners," Dr Goldie said in a statement.

Among other changes in the $6 billion savings package, those aged under 65 will still be able to "bring forward" three years' worth of non-concessional contributions but those with super balances of more than $1.6 million will not.

"These measures remove any remaining impediment or barrier for the government's budget superannuation package to now receive bipartisan support in this parliament," Mr Morrison told reporters in Canberra.

They also ensure super concessions were not being used as a tax-incentivised estate planning vehicle.

"These measures make the superannuation system even fairer, even more flexible and even more sustainable."

Mr Morrison said he had spoken to shadow treasurer Chris Bowen and offered a detailed briefing.

Legislation, backed by cabinet and the coalition party room, would be introduced by the end of the year.

One of the coalition backbenchers critical of the initial plans, National's MP George Christensen, says the changes go even further than he had hoped.

"This really does seal the deal and as such, I can say I am 100 per cent supportive of the new superannuation reforms that we will take to parliament and I will no longer be crossing the floor, " he told reporters.

Mr Bowen was unimpressed by Mr Morrison's backdown and won't rushing a response.

"When you have got people like George Christensen writing government policy, we reserve the right to take our time to scrutinise it very carefully," he said.

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