17 May 2010

Abbott's Superannuation Policy - The Road to Nowhere

Tony Abbott can't seem to move from sound bites on super to developing policies that will lead to security and dignity for working Australians in retirement.

Tony Abbott has made it clear that he is opposed to an increase in the Super Guarantee – changes that would see 8.4 million Australians receive an increase in their retirement incomes.

The Leader of the Opposition has attempted to paint the increase in Australia's retirement incomes as a tax on employment

Today he said:

"Ah, and the superannuation guarantee levy will make it harder to employ workers."

This statement flies in the face of what was experienced between 1 July 1992 and 30 June 2003 when the Superannuation Guarantee was lifted to 9%.

During that time:

  • The Australian economy grew strongly – GDP growth averaged 3.9% p.a.
  • Unemployment fell from 11% to 6.1%.
  • Labour productivity grew very strongly, well above its 30 year average, at 2.2% p.a.
  • Unit labour costs fell over the period by 4.5%.
  • Real wages grew.
  • Australian business profitability grew by 6.1% p.a. and profits rose as a percentage of GDP.

A Tony Abbott-led Coalition would not only mean no increase in Australia's retirement incomes, courtesy of the Rudd Government's Stronger and Fairer superannuation reforms, but Tony Abbott wants to go further and rip the heart out of the nation's compulsory superannuation system.

Tony Abbott made it clear in his book Battelines that he wants to tax superannuation contributions at a person's marginal tax rate, which would result in a major fall in the superannuation lump sum of retirees, as well as less take-home pay for working Australians.

Tony Abbott has yet to explain why he wants to deny:

  • An additional $108,000 in the retirement income of a 30-year-old on average weekly earnings.
  • An additional $78,000 in superannuation for a women aged 30 today on average weekly earnings, who has had an interrupted work pattern.
  • Australians who are over 50 and have low super balances, the opportunity to contribute up to $50,000 a year into superannuation at a concessional tax rate.

17 May 2010