Opposition's Reckless $5 Billion Super Policy a Poorly Targeted, Job Killing, Administrative Nightmare

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has called the latest Budget attack by the Leader of the Opposition a poorly targeted piece of policy-on-the-run that would likely stifle job creation.

Minister Sherry was responding to the latest calls by Opposition leader Malcolm Turnbull for the Government to be made to pay all or part of small business superannuation guarantee obligations for a period.

"Two months ago, Mr Turnbull floated this policy direction for superannuation. Since then he's been beavering away on a few more details."

"What he's now come up with is just as bad as his original $43 billion, then $21.5 billion plans. With the goalposts moved again, his latest attempt will still rip a $5 billion hole in the Budget and deliver none of the benefits he's claiming."

"This policy is a poorly targeted, job killing, administrative nightmare," said Minister Sherry.

"It is yet another example of the Opposition using the global recession for its own opportunistic reasons."

Policy on the run

"The Opposition has had three attempts at this policy – first, $43 billion on a single policy whilst opposing the Government's $42 billion stimulus package, then a downgrade to a $21.5 billion measure. Now we have take-three."

"Even with the $5 billion price tag, the Liberal's ever-shrinking super policy, is a shocking example of Budget irresponsibility," said Minister Sherry.

"This policy is also an administrative nightmare for super funds which will end up costing the members more money at a time when their returns are suffering due to the global financial crisis. The fact is such a measure will take at least six months to flow to anyone, when what we need is decisive action that makes an impact now," Minister Sherry said.

Poorly targeted

"This policy is a poorly targeted measure, at best. It is totally unclear how it would stimulate the economy, particularly in a targeted and immediate manner, which is what we need right now and is unlikely any benefits would be passed on as lower prices to consumers."

"This plan also treats high-income earners no differently from those on low or middle range incomes. By comparison, the Rudd Government is acting now to provide the greatest assistance to those most at risk," said Minister Sherry.

Job destroying

"This is a truly dangerous policy that if ever implemented would cost Australia jobs".

"If you apply the policy to businesses with 20 or less staff, you would of course think twice about hiring a few extra workers if you had only 18 or 19 employees."

"You'd have to weigh up whether you would employ more staff and lose the Government payment. I am sure many businesses would decide not to add new workers – the last thing we need during these tough times", said Minister Sherry.

Administrative nightmare

"This would also be an administrative nightmare to implement. Under Mr Turnbull's plan, because of its sheer complexity, it is almost impossible that any Government payment of superannuation could occur before 2010."

"Our economy needs a stimulus right now and we're acting decisively to deliver that."

CANBERRA
April 2, 2009

Preliminary Treasury Costings