The passage of the Minerals Resource Rent Tax late yesterday brings real and big benefits to real Australian's retirement savings, Minister for Superannuation Bill Shorten said today.
"This is big economic reform which will share the benefits of the mining boom with all Australians on all incomes," Mr Shorten said.
"It is a big reform for the whole country, but it touches the lives of every working Australian who will see universal superannuation increase from 9 to 12 percent."
"At the end of their working life, Australians can look back on the passing of this legislation as a moment when their hard work received a strong boost. And that the golden goal of lifetime income security became significantly more obtainable."
For example, a 22 year old hairdresser earning around $38,000 per year, will at the age of 67 have an extra $100,000 in their retirement savings as a result of this reform.
A 35 year old plumber on $60,000 a year will see an extra $75,000 in their nest egg when they hit retirement.
And even a teacher, who at 55 is contemplating the last decade of their working life, will have an extra $12,000 when they retire at 67.
The satisfactory replacement rate when a worker retires is between 65 and 70 percent of their accustomed earnings.
For workers in industries like construction, skilled trades, office reception and school teaching - the mining tax - by funding the increase of the Superannuation Guarantee to 12 percent, improves their salary replacement rate in retirement by up to 6 percent.
No one should underestimate the importance of increasing this replacement rate for the wellbeing of millions of working Australians who will retire in the decades ahead.
"Through this reform, we're also effectively abolishing tax on superannuation paid by the 3.6 million Australians earning less than $37,000 through the Low Income Super Contribution (LISC), a reform the Liberals have cruelly said they'll abolish."
This is real reform for real people – and at every step of the way the Liberal Party has just said no to it.
"In NSW, Tony Abbott and Joe Hockey are saying no to the 21,550 and 20,200 low income earners in their respective electorates who stand to benefit from handing back the tax they pay on their superannuation. And these two Liberal frontbenchers don't support the fact that many of the 24,800 plumbers in NSW will get bigger retirement savings due to 12 percent superannuation."
"In Victoria, Andrew Robb and Bruce Bilson are saying no to the 19,900 and 25,100 low income earners in their respective electorates who stand to benefit from handing back the tax they pay on their superannuation. And these two Liberal frontbenchers don't support the fact that many of the 48,300 office receptionists in Victoria will get bigger retirement savings due to 12 percent superannuation."
"Queensland MPs Warren Truss and Peter Dutton are saying no to the 25,800 and 25,500 low income earners in their respective electorate who stand to benefit from handing back the tax they pay on their superannuation. And these two Liberal frontbenchers don't support the fact that many of the 40,800 mining and construction labourers in Queensland will get bigger retirement savings due to 12 percent superannuation."
"The South Australian MP Christopher Pyne is saying no to the 21,600 low income earners in his electorate stand to benefit from handing back the tax they pay on their superannuation. And this Liberal frontbenchers doesn't support the fact that many of the 3,600 hairdressers in South Australia will get bigger retirement savings due to 12 percent superannuation."
"Tony Abbott and all these MPs think there is more benefit for Australia in giving a tax cut to billionaire mine owners than there is in improving retirement savings for regular Aussies."
The MRRT is crucial to funding the superannuation increase because it accounts for the cost to budget of superannuation being taxed at the 15 percent concessional rate instead of those wages being taxed at their normal (higher) marginal income tax rate.
"When the time comes and Australians are out in the garden, or taking a holiday, or doing whatever it is they want to reward themselves in their retirement, they'll remember that it was this Labor Government which boosted their superannuation."
"They'll also remember it was Tony Abbott who just said no to better retirement savings for all Australians."
20 March 2012
*All data sourced from ATO, available on request.