Minister for Financial Services & Superannuation
14 September 2010 - 1 July 2013
Serious Questions for the Liberals about Superannuation
At a press conference in Geelong today Tony Abbott told reporters:
"Well, we strongly oppose the superannuation increase. We have always as a Coalition been against compulsory superannuation increases."
This is despite Tony Abbott having committed the Liberal Party to keeping the gradual increase in compulsory superannuation from 9 to 12 per cent by 2019-20 should he win Government.
Mr Abbott's latest comments raise some important questions.
- Is Mr Abbott preparing the Coalition for a back flip on a back flip – i.e. are they intending to change their position again and not retain the superannuation increase if they were to come to office?
- Because superannuation is compulsory savings, it is taxed at a concessional rate of 15 percent. An increase in superannuation means a greater proportion of Australian wages are concessionally taxed, thus forgoing revenue which would otherwise be taken as income tax at a higher income tax rate. In fact, for every 1 percent increase in compulsory superannuation, Australians pay $1 billion less in income tax to Government coffers. If Mr Abbott commits to keeping his policy of increasing compulsory superannuation to 12 percent without the mining tax, how will he replace the $3 billion in forgone revenue?
- The mining tax also funds the abolition of tax paid on superannuation for the 3.6 million Australians, including 2.1 million women, earning under $37,000. The hand back of this tax for low income earners comes at the cost of $1.9 billion to the Commonwealth budget over the forward estimates. Will Mr Abbott commit to supporting this measure or will he scrap it? If his commitment is to keep it in office, how will he pay for it without the revenue of the mining tax?
The Liberals either support the policy of increasing superannuation to 12 percent, or they are actually secretly preparing to scrap it – they can't have it both ways.
23 March 2012