If the Coalition continues to reject the Government’s proposal to raise the superannuation guarantee (SG) from 9 to 12 per cent, it should outline how it plans to tackle the funding challenges of Australia’s ageing population, according to the Australian Institute of Superannuation Trustees (AIST).
“It’s not good enough for the Coalition to simply quote selected comments from the Henry Tax Review, when Dr Henry himself warned that the Review should be considered in its entirety,” said AIST chief executive Fiona Reynolds (pictured).
Reynolds questioned how future generations of taxpayers would be able to fund the needs of Australia’s rapidly ageing population.
“If the Coalition has the solution to these demographic challenges, then let’s hear it,” she said.
AIST modelling shows that the vast majority of taxpayers would have less super and experience a drop in take-home pay under Henry Review recommendations compared to the Government’s super reform package, which includes a super rebate for low-income earners, Reynolds said.
Henry recommendations also include the need for complex data matching requirements on behalf the Australian Taxation Office, she added.
An increase in the SG would not overly harm employers and history has shown businesses were not unduly affected by past SG increases, which were far greater and less gradual, she said.
The first 0.25 per cent rise would not take effect until 2013 and would amount to $3 per week for the average wage earner, Reynolds said.
“It’s hard to argue that such a rise will be a huge impost on either wage costs or take-home pay, particularly when real wages are expected to have increased by more than 6 per cent by 2013-14,” she said.
