The Government's effort to abolish the superannuation surcharge hit a snag in the Senate today - The Australian Labor Party.
It demonstrates that Labor is not interested in tax reform or policy changes to improve savings.
Voting with the minor parties in the Senate to block the abolition of the superannuation surcharge, Labor again chose politics over delivering real savings to Australian workers.
"Removing the surcharge will significantly boost the incentives for around 600,000 Australians to contribute to superannuation and will improve their superannuation savings by $2.5 billion over the next four years," Assistant Treasurer, Mal Brough, said.
"Australians and industry groups applauded the Government for moving to completely abolish the surcharge. They should hold the Labor Party to account for voting to keep an unnecessary tax in place which discourages saving for retirement.
The Superannuation Laws Amendment (Abolition of Surcharge) Bill 2005 will give effect to the Treasurer's budget announcement to abolish the surcharge from 1 July 2005.
The abolition of the surcharge will boost the superannuation savings of affected individuals, provide incentives for individuals to make additional voluntary superannuation savings, and simplify the operation of the superannuation system.
The surcharge was introduced in 1996 as one of a number of measures to put fiscal policy on a sustainable basis following Labor's legacy of a budget deficit and $96 billion debt.
"The Government's commitment to scrap the surcharge will be honoured. The Labor Party has simply delayed the inevitable, just as it did with the tax cuts.
The Bill complements the significant boost to superannuation savings announced last year. The Government expanded the co-contribution scheme to significantly enhance the incentives for low and middle income employees to contribute to superannuation, at a cost of $2.3 billion over four years.