Industry Super Australia (ISA) is dismayed at a short sighted deal in the Senate today that will mean that millions of Australians retire with tens of thousands of dollars less in their superannuation accounts.
Read this on the ISA website here - originally published 2 September 2014
The Government has announced an agreement with the Palmer United Party and some other crossbench Senators that includes delaying the progression of the superannuation guarantee to 12 per cent to 2025– 6 years later than originally legislated.
For an average income earner, aged 25, the delay in the SG will cost them around $100,000 over their working life ($36,000 in today's dollars).
Under the deal the Low income-earners super contribution (LISC) will also be abandoned on 30 June 2017.
The economic implications are significant. Taken together, national savings will be hit by a staggering $150 billion by 2025.
ISA Chief Executive David Whiteley said:
"Australians deserve considered policy making on an economic issue as important as retirement incomes policy. This decision is about a short term budget fix that will have long term budget impacts on age pension outlays.
"ISA has consistently sought a bi-partisan approach from policy makers on retirement incomes policy.
"The scrapping of the LISC is plainly unfair. Over three million workers – two million of whom are women – will lose $500 per annum as a result of this change.
"These decisions will bewilder superannuation fund members and can only reduce confidence in the super system", said Mr Whiteley.
For further information, please contact Phil Davey 0414 867 188
Super slug: how much you will lose
Read this on the ISA website here - originally published 3 September 2014
An analysis by Industry Super Australia (ISA) has revealed for the first time the impact of the federal governments superannuation changes across the entire workforce.
The new research (see table below) shows that almost all ages and income brackets will have their retirement savings affected, with some demographics set to lose tens of thousands of dollars.
Commenting on the findings, ISA Chief Executive David Whiteley said today that the social contract between Australians and their Government that underwrites the superannuation system was at risk of fraying.
"The Governments decision to leave Australian workers worse off at retirement and make our superannuation system a plaything of successive Treasurers will erode confidence in our system."
"It will mean less investment in productivity enhancing and nation building infrastructure, more pressure on future federal budgets due to increased reliance on the pension and the creation of a two tier super system, with inequitable access to tax concessions depending on income."
"ISA has consistently sought a bi-partisan approach from policy makers on retirement incomes policy.
"The scrapping of the LISC is plainly unfair. Over three million workers – two million of whom are women – will lose $500 per annum as a result of this change.
Impact on Super Balance from Delay in SG and abolishing Low Income Super Contribution
(Real impacts in 2014 prices. Retirement Age 67)
For further information, please contact Phil Davey 0414 867 188