Extract from ABC NEWS
Updated
Australian workers will be "demonstrably worse off"
under the Federal Government's deal to scrap the mining tax, the
superannuation industry says.
The Government announced yesterday it had reached an agreement with the Palmer United Party
(PUP) to get rid of the controversial tax, whereby the schoolkids bonus
would be retained until after the next election, and increases to super
contributions put on hold until 2021.Treasurer Joe Hockey said the deal - which will cost the budget $6.5 billion - was not the Government's "preferred option" but was still a "damn good deal" for the Australian people.
However, Industry Super Australia chief executive David Whiteley said the freeze was not good news for Australians.
"Let's be clear — this is not a change which was expected and it is not a positive change for superannuation savings," he told ABC News Breakfast.
"A 25-year-old on average earnings over their working life could retire with $100,000 less.
"Modelling also shows that somebody earning less than $37,000 — and that is 3.5 million people in this country, 2 million of which are women — over their working life could be between $20,000 and $25,000 worse off because of the removal of the low income earners super contribution."
Mr Whiteley rejected the argument put forward by the Government that the freeze will allow employers to fund more wage rises for their workers.
"I'm not sure how many workers will be finding out they have a pay rise from their boss this morning. I'm not sure that is what we will see," he said.
"What we will see is people have less going into their super and what we will see from 2018, when people get their statements and they earn less than $37,000, there won't be a $500 tax rebate.
"People will be demonstrably worse off with these changes."
Calculator: How will the changes affect your super? Industry Super Australia
"We cannot have these constant changes to the superannuation system," she said.
"We need to set a goal for the system, we need to make sure the community understands that goal and we need to ensure somebody external to the Government and to Treasury on measuring, that we're actually keeping to that goal."
Chris Richardson from Deloitte Access Economics said the overall savings from the deal would help the Coalition bring the budget back into the black.
"These changes will actually help a bit because by slowing down the shift to higher superannuation in Australia, basically you're taking money out of something that's taxed at a pretty low rate — superannuation — and leaving it in wages and in profits, and those are taxed at a higher rate," he said.
Mining company's backed over people's futures: Shorten
The Government has denied the seven-year freeze means it has broken its election promise to not make any "adverse" changes to super arrangements.
"Money that would otherwise be squirreled away in superannuation funds will instead be in the pockets of workers," Mr Abbott said today.
Opposition Leader Bill Shorten in Question Time said the changes would leave people with less money in retirement.
"Why does the Prime Minister back nine mining companies over nine million people?" Mr Shorten said.
Finance Minister Mathias Cormann told the ABC's AM program: "The truth is increases in compulsory super savings don't come out of thin air".
"They come out of people's own pockets. They come out of workers' wages.
"Don't take my word for it. That is what Bill Shorten used to say when he was the minister for financial services and superannuation.
"What we've done is we have ensured that people have more of their own money available to them pre-retirement so that they can use it to deal with cost-of-living expenses, or they can use it to pay off their mortgage faster, or they can use it to save more through superannuation voluntarily."
PUP senator Jacqui Lambie maintained the freeze will leave more money in workers' pockets.
"And we'd rather them spending that money now where they haven't got the money."
But Labor senator Penny Wong said millions will be worse off.
"What is on display here is this Prime Minister's values and his priorities," she told Lateline.
"And what is clear is this: when he said to Australians before the election, 'No adverse changes to superannuation', well, that was another lie and we've seen another broken promise."
Former Labor prime minister Paul Keating issued a statement describing the freeze on superannuation increases as "appalling".
As Treasurer in the mid-1980s Mr Keating made changes that are considered the foundation of the modern superannuation system.
"The Liberal party has always opposed universal superannuation and as it revealed yesterday, it still does," Mr Keating said in a statement.
"Yesterday’s decision is an appalling one - by a government lacking any genuine or conscientious concern for the nation's workforce."
No comments:
Post a Comment