In the biggest change to superannuation in 20 years, around 8.4 million Australians will have their superannuation savings boosted as a result of the superannuation guarantee rate legislation introduced into the Parliament today.
The Superannuation Guarantee (Administration) Amendment Bill 2011 increases the superannuation guarantee (SG) rate from nine per cent to 12 per cent.
The Assistant Treasurer and Minister for Financial Services and Superannuation, Bill Shorten, said "This is an historic reform. Today, the Gillard Labor Government has taken another important step towards increasing the adequacy and fairness of retirement incomes for Australian workers."
"Australians should not have to work hard and retire poor. Nine per cent super is simply not enough."
An employee aged 30 earning around $70,000 today will retire with an extra $108,000 in superannuation under these reforms.
The increase in the SG will boost the superannuation savings of Australian workers by around $500 billion by 2035. A proportion of these savings will be channelled back into the Australian economy to fund jobs and nation-building infrastructure.
The revenue from the MRRT will go towards funding the increase in the SG which will comes at a cost to Government revenue of an estimated $740 million over the forward estimates.
A win for older Australians
"As a result of strong representations from members of the Labor caucus and cross-bench, including Yvette D'Ath, Shayne Neumann, Deb O'Neill, Michelle Rowland, Rob Oakeshott and Tony Windsor, I have decided there will be no age limit for superannuation guarantee contributions. These changes will start on 1 July 2013," Mr Shorten said.
The tax receipts from the Mineral Resource Rent Tax will partly finance both these measures, to ensure that the increased income from Australia's natural resources provides an enduring benefit for the nation.
These policies will be delivered through amendments to the Superannuation Guarantee (Administration) Act 1992.
"Together with the low income superannuation contribution and Stronger Super package of reforms previously announced, the increase in the superannuation guarantee will improve the adequacy of retirement incomes and deliver a comfortable and secure retirement for current and future generations of Australian workers," he said.