Abbott facing backlash over Budget reply

by |

In his Budget reply speech, Opposition leader Tony Abbott announced that the Coalition would defer the increase in the Superannuation Guarantee (SG) if it wins government.

The SPAA has asked the Coalition to “think carefully about such a move”. SPAA head of technical and professional standards Graeme Colley referred to the Coalition’s commitment not to make any changes to super, and said “any decision that defers an increase in the SG simply reduces the adequacy of Australians’ retirement savings”.

He added that for many employers there would be no increase in costs as a higher SG will be funded from employees’ salaries and will actually reduce the amount of take home pay.

The Finance Sector Union said the delay was an attack on the retirement savings of all Australian workers. “Finance workers are already feeling insecure about their jobs. This latest blow to finance jobs is unhelpful to say the least,” said FSU national secretary Leon Carter.

Deloitte National Superannuation Leader Russell Mason said the announcement to delay the increase was understandable but disappointing and not in the best interests of working Australians.

“We understand that the Coalition is proposing to help alleviate the deficit by allowing fewer tax concessions, and it will save the Government $1.1billion in 2016-17 and $2.5 billion over the forward estimates, but in the longer term it is in the national interest to reach the 12% superannuation guarantee as soon as possible.”

Deloitte research predicted that the Australian superannuation system would grow to $3 trillion by 2020, $4.5tn by 2026 and more than $6tn by 2030. These figures were driven by the 9% to 12% rise in the SG, population growth, and the ageing population.

“The decisions to increase the Superannuation Guarantee to 12% and lift the qualifying age for the age pension to 67 years were all about helping Australians provide for their own retirement,” said Mason. “This is to be achieved by Australians saving more and working longer.”

Do you think the Coalition should keep the proposed increase, or defer it by two years to save the Budget?

More stories:

Opposition to "take an axe" to super savings

Budget 2013: What it means for planning firms

Capitalise on Budget tax changes