The Federal Government has pronounced that its co-contribution superannuation scheme could deliver 10 to 30 times the benefit to low income earners over the Opposition’s proposal of cutting the contributions tax.
According to Assistant Treasurer and Minister for Revenue Mal Brough, Labor’s “unfounded” proposal to cut the 15 per cent tax by 2 per cent “provides little benefit to low and middle income earners whose contributions are too small to make a tax cut meaningful.”
“The government’s co-contribution scheme offers ‘battlers’ extra incentive to save, provides a bigger boost to their retirement savings, and is better for national saving,” Brough says.
The scheme could give consumers “more bang for their superannuation buck” by adding $106,000 to the superannuation balance of a person earning $25,000 a year over a 30-year working life, Brough says.
“That’s an 86 per cent improvement on that person’s projected super balance, where only the minimum superannuation guarantee contributions are made.”
He says the scheme could add $51,000 to the super balance of someone earning $36,000 a year over a 30 year working life – a 28 per cent improvement.
Under Labor’s policy only $3,000 would be added to the real superannuation balance of a person earning $25,000 and a $4,500 at $36,000, he says.
Meanwhile, Shadow Minister for Retirement Incomes and Savings Nick Sherry describes research released this week by Association of Superannuation Funds of Australia (ASFA) as a “deafening no” by the public to the Government’s superannuation policy.
“The survey reveals only 3 per cent of people agree with the Howard Government’s plan to have people work until 70 years of age,” he says.
“It also reveals that since 2001 there has been a huge drop in the number of people hoping to retire by age 65, and most people of retirement age feel either disappointment or anxiety and agitation.”
