Tomorrow the Senate is scheduled to vote on the Minerals Resource Rent Tax. This critical economic reform will help our nation lock in the benefits of the mining boom. One of the important measures being introduced as part of the package is an increase in the superannuation guarantee from 9 per cent to 12 per cent. It's worth taking a moment to think about what this change will mean for the lives of millions of Australians. Like a 20-year-old hairdresser who will see an estimated $110,000 jump in retirement savings. Like a 29-year-old clerical worker who is likely to gain an extra $78,000. Like a 30-year-old plumber who stands to see a $95,000 benefit. Like a 32-year-old construction worker who could end up with an extra $98,000. Or like a 27-year-old waiter who is likely to be $91,000 better off at retirement. Like these examples, you may be surprised by how much you stand to gain from the increase in the super guarantee. Today, together with the Minister for Financial Services and Superannuation Bill Shorten, I've launched the MoreSuper.gov.au website that allows you to work out what this important reform means for you. The site provides a simple calculator that allows you to enter a few details to find out how much larger your super nest egg is likely to be at retirement.
The super guarantee will be boosted progressively, with increases of 0.25 percentage points on 1 July next year and 1 July 2014. It will then be raised by half a percentage point each year until it reaches 12 per cent in 2019-20. This approach will give time for employers and employees to adjust and plan ahead. The MRRT helps fund the concessional tax treatment that these extra super contributions will receive. As well as providing a more secure retirement for 8.4 million workers, the MRRT will help provide an extra benefit to workers on low incomes. From 1 July, effectively no tax will be paid on the super guarantee for the 3.6 million workers earning up to $37,000 a year. By providing this concession, more money - up to $500 a year - will be directed into the retirement savings accounts of those workers who need it most. This is in addition to the increase in the super guarantee.
More savings are not just important for individuals and their families, they're also important for the economy as a whole. The Government's reforms to boost superannuation are forecast to increase the nation's pool of savings by a staggering $500 billion by 2035. A large portion of this will get channelled back into our economy through investments. The funds help businesses expand, build infrastructure and create jobs. It's often not appreciated that Australia's superannuation savings were one of the important factors that helped our economy withstand the worst of the global financial crisis. When international credit markets seized up, many Australian companies were able to get the funds they needed at home.
The mining boom is clearly a great thing for our country. It's creating thousands of new jobs and billions of dollars in new investment. But it's important to remember that mining is different to other industries. The coal and iron ore in the ground are owned by the Australian people. We all know these resources can only be sold once. That's why the Government is committed to locking in the benefits of the mining boom and ensuring Australians receive a fair return on the mineral wealth that we all own 100 per cent. Far from putting a brake on investment, mining companies are continuing to ramp up production in full knowledge that the MRRT will apply from July 1. New investment in the resources sector has risen from $47 billion in 2010-11 to $95 billion this year, to an expected $120 billion in 2012-13. And mining employment has grown by 37 per cent - that's 68,000 mining jobs created since the MRRT was announced.
One of the downsides of the mining boom is that it's accompanied by a higher dollar which is making life a lot tougher for industries that compete in international markets like manufacturing, tourism and education. That's why as well as increasing superannuation, the MRRT will also help businesses, particularly small businesses outside the fast lane of the resources sector. One of the ways the MRRT does this is through funding a new tax break for Australia's 2.7 million small businesses . From 1 July, small businesses - whether they are run by sole traders or through companies, partnerships or trusts - will be able to immediately write-off each and every asset they buy worth up to $6,500. For example, a hairdressing salon that purchases 15 hairdressing chairs worth $1,500 each, a computer system worth $3,000, and six hair-washing sinks for $1,250 each, will be able to deduct the full cost of each item straight off its taxable income for that year. This would provide the salon with an extra cash flow benefit worth $8,086 in the year after the assets were first used. This encourages small businesses to invest in new equipment to grow their operations and makes book-keeping a lot simpler by removing the need to track the depreciation of assets over a number of years.
The company tax rate will also be reduced to 29 per cent from 30 per cent from the 2013-14 income year, with a one-year head start for Australia's 720,000 small business companies in recognition of the extra pressures they face in our patchwork economy. It's really important that we get these tax cuts through the Parliament in the upcoming budget sittings so that businesses right across the economy get the support they need now to improve competitiveness, attract investment and create new jobs. Following last year's really successful Tax Forum we established the independent Business Tax Working Group to look at how our tax system can best help businesses increase productivity and respond to the pressures of our changing economy. As I discussed in a speech on Friday, the working group is looking at potential reforms to do with the tax treatment of losses. This may be one way to encourage investment in Australia, particularly in struggling sectors, leading to higher productivity and wages. Of course any reform proposals will also have to be funded by savings found within the business tax system. I look forward to receiving the working group's report later this month.
I'm really pleased my essay in The Monthly has started a lively community debate about why reforms like the mining tax are so important to ensure more Australians benefit from the opportunities of the Asian Century, not just a fortunate few. I had a great discussion about these issues in an online forum during the week and on radio yesterday. One big factor behind Australia's success has been the responsible economic management though the global financial crisis and continuing turbulence. By keeping the economy strong and workers in jobs, we've avoided recession and the immense social upheaval that's occurred in so many other parts of the advanced world. With policies like the MRRT, we can build on this record, providing the opportunity for more Australians to share in the benefits of a strong economy.
Deputy Prime Minister and Treasurer of Australia