The Federal Treasurer, Peter Costello, has ruled a future Coalition government out of raising the level of compulsory employer superannuation contributions despite mounting industry concerns about the adequacy of current superannuation savings.
Speaking on the John Laws radio program in Sydney this morning, Costello announced the Prime Minister, John Howard, would be unveiling the Coalition’s superannuation policy later in the election campaign, but said the policy would not involve an increase in the level of employer superannuation contributions.
“The Prime Minister intends to make some announcements later on in the campaign and I think they’ll be well received,” Costello says.
“But we certainly won’t be doing what the Labor Party is doing which is to put up superannuation contributions against small business. We’ve ruled that out.”
The announcement comes amidst growing calls for an increase in the level of compulsory superannuation contributions, which are due to rise to a maximum of 9 per cent next year, in order to ensure the adequacy of future retirement incomes.
Last week,Perpetualmanaging director Graham Bradley become the latest industry figure to weigh in to the debate, arguing after the group’s annual general meeting that compulsory contributions should be increased to 12 per cent over the next four years before being pushed even higher.
“I think both [major political parties] have to address the adequacy of the nine per cent levy being introduced in July next year,” he says.
“I am strongly of the view that figure should be as high as 15 per cent.”
The Association of Superannuation Funds of Australia (ASFA) has also recently released a survey that indicates that up to two thirds of voters in some marginal electorates are supportive of a progressive increase in superannuation contributions to 12 or 15 per cent.
Costello also used the appearance on the Law’s program to attack the Labor Party’s commitment to conducting a wide-ranging review of superannuation, despite having originally put forward the idea of a review himself last year.
Earlier this month, the Shadow Treasurer Simon Crean announced Labor would set up an inquiry into superannuation within 100 days of taking office to look at issues such as the tax treatment of superannuation and prudential regulation, as well as the adequacy of the current level of compulsory superannuation contributions.
“I’ll tell you why he’s having a review. Because he doesn’t want people to know what his policy is before the election,” Costello said.
“What he is under pressure to do from the ACTU is to push up the superannuation contribution so that employers will have to pay more money. He knows that would be unpopular with small business so what he says is I’ll have a review.”
