In a week of major superannuation reforms the Government has secured the single largest incentive for Australians to contribute to their superannuation savings since superannuation guarantee contributions were introduced, Minister for Revenue and Assistant Treasurer, Senator Helen Coonan said today.
“The superannuation landscape has been transformed in the last few weeks. Workers will now control where their super is invested, low and middle income earners will benefit from a very generous co-contribution, the superannuation surcharge will be reduced and the super system will be made more flexible and adaptable,” Senator Coonan said.
“From 1 July 2004 low income earners earning up to $28,000 who contribute to their super will receive an extended Government co-contribution of $1.50 for every dollar contributed up to $1500. The Government also passed a measure that means workers who do not earn enough to qualify for employer contributions to their superannuation will now be eligible for the Government’s co-contribution.
“Middle Australia will now benefit from the extended co-contribution. From 1 July 2004 workers earning up to $58,000 (up from $40,000) will receive a more generous Government co-contribution if they contribute to their super. The superannuation surcharge will also be reduced to 10 per cent by 2005/06.
“The extension of the co-contribution alone is worth $2.1 billion over three years. For a person earning $25,000, receiving the maximum co-contribution over 30 years will boost superannuation by 86 per cent or $106,000 in today's dollars. For a person earning $36,000, the improvement is 28 per cent or $51,000 in today's dollars.
“These two measures are about providing incentives for Australian workers to contribute to their superannuation savings and removing a disincentive for those that can afford to put away for their retirement to do so.
“By voting against the co-contribution measure Labor has pinned its colours to the mast and shown it is not interested in helping low and middle income earners and instead would desert its heartland for a cash-grab.
“I congratulate the four independent Senators for supporting the Government’s efforts to deliver significant and far-reaching reforms that will ultimately boost the retirement savings of Australian workers.
“Every dollar helps to boost retirement savings even if it is $10, $20 or $100 over the course of the year, the Government will give your super savings a helping hand.
“Having enough superannuation is vital to being able to live comfortably in retirement, especially in an age where people are living longer. I urge all eligible people to look into taking up the super co-contribution.”