The ASU is continuing to voice its opposition to regressive changes to superannuation being delivered by the new Abbott Government. Today the Senate Economics Legislation Committee is hearing submissions on the repeal of the Mining Tax, which includes removal of the Low Income Super Contribution (LISC) and a delay to the increase in the Superannuation Guarantee (SG) from 9-12%. Both of those changes will have a significant adverse impact on workers, particularly the low paid.
In the context of these proposed changes, the Productivity Commission last week recommended raising the retirement age to 70 as a result of pressures on the federal budget to deliver the pension in the future. We strongly argue that improvements to the superannuation system are one of the best ways of addressing retirement security. Removing LISC and delaying changes to the SG will undermine our economic position, not improve it! Optimal superannuation means workers can fund their own retirement and retain a better standard of living.
The ASU believes that the Abbott Federal Government is making these decisions as a result of political motivations, not with the best interests of Australia's future at heart. We urge the Government to reconsider its position and acknowledge the role played by improved superannuation in ensuring our future prosperity.
Earlier this month, national advocacy and networking group Women in Super (WIS) organised an open letter to the Prime Minister signed by prominent people from, amongst others, business, academia, and community groups. Please find their media release and open letter republished below.
Open letter urges Prime Minister not to impose super tax on low-paid
By Women In Super (WIS)
12 November 2013
You can read this release on the WIS website here
On the opening of the 44th Parliament of Australia, more than 50 prominent signatories from the superannuation industry, business, academia, women's organisations, and policy and community groups have signed an open letter to the Prime Minister urging the coalition to prioritise funding of the Low Income Superannuation Contribution (LISC).
The letter, organised by national advocacy and networking group Women in Super (WIS), calls on the Government to break the funding link between the Minerals Resource Rent Tax (MRRT) and the LISC in order to continue funding of the scheme, which benefits one in three working Australians.
The LISC is one of a number of measures associated with the MRRT Repeal Bill, which is expected to be introduced into Parliament this week.
WIS National Chair Cate Wood said the level of support – from a wide variety of organisations and sectors, not just the super industry – showed that retaining the LISC was fundamental to a fair and equitable superannuation system.
"You cannot have high-income earners receiving sizeable tax breaks on their superannuation contributions and penalise low-income earners by removing the modest tax concessions provided by the LISC," said Ms Wood
"Working Australians are compelled to save for their retirement through superannuation and it's a world-class system, but removing the LISC will mean that a third of the workforce will pay more tax on their super contributions than if the money were part of their take-home pay."
Ms Wood also noted the importance of the scheme for women, who face many barriers to saving for retirement including unequal pay, broken workforce participation and overrepresentation in low- paid industries.
"This is such an important scheme for women – nearly half the female workforce benefits from the LISC and it's one of the few policies that works to narrow the gender gap in retirement savings," said Ms Wood.
Whilst conceding that the Government has a difficult task in framing the next Federal Budget, Ms Wood said the LISC was so integral to the equity of the system that savings must be sought elsewhere.
Contact
Cate Wood, Chair & National Spokesperson – Women in Super: 0417 391 669
Alissa Harnath, Policy & Communications Officer – Women in Super: 0418 376 187
Fast facts
- 3.6 million Australians benefit – 1 in 3 workers
- 2.1 million women affected – half the total female workforce
- Worth up to $500 per annum – up to $25,000 at retirement
- Workers earning under $37,000 will pay more tax on super contributions than if the money was part of their take-home pay
Download the open letter to PM Abbott regarding changes to superannuation, 12 November 2013