Pauline Vamos: There’s a good percentageof employers who don’t have thefacilities to provide salary sacrificeTony Cole: They can still make avoluntary contribution if they wantto. And if they don’t want to, then thatmeans they’d spend it and what we’retalking about is roughly $4 billion aquarter that would flow to consumption.Trevor Thompson: Perhaps if Icould share a view. It seems to us thatit’s taken about 25 years to build someconfidence in the system.
To disturbthat by switching the contribution levelsto something that is going to be potentiallydistorted by super policy seems toraise a whole heap of questions. I thinkall policy levers should be considered,not necessarily all utilised. The proposalopens up a whole lot of issues around,why wouldn’t we be spending less, say,using the same arguments they’re usingfor super, on health care, on defence orany other thing, there’s a whole agendathere…Nicholas Gruen: It’s a financialthing, that’s why we don’t say ‘let’s havefewer obstetric deliveries’, okay. Wedidn’t think of that because we didn’t think it made sense.
But super is a largefinancial facility, and that’s what we’regoing through, a financial crisis.Colin Tate: Aside from the selfinterest in the superannuation industrywhich is evident in the businesswe have, I can see your policy ideas asquite clever, to take it from somewherethat doesn’t actually take it out ofgovernment coffers, and doesn’t directly even take it out of an employer or anemployee’s direct cash flow.
However, not that I’ve ever agreedwith much John Howard’s ever said, butI actually agree with what he said theother day that for an employer, if theyknocked off the 6 per cent payroll tax itwould actually give my business an immediatebenefit to keep jobs for the nextsix to twelve months. I don’t see this SGproposal directly saving one job in mycompany whatsoever.Nicholas Gruen: That’s becauseyou’re an employer. And if you were aconsumer you would see that you wouldspend more money.
Rod Glover: The timing of our proposallast November was in the context of three different objectives. One wasthe government was thinking abouthow it might stimulate the economy,stimulate consumption. Secondly, aview that many of us have that the 9 percent is not adequate long term. Andthirdly, the government at that stagewere desperately trying to hold on to aBudget surplus. One of the features ofthe proposal that is different to changing tax rates or to directly spendingmoney is reducing SG from 9 to 6 actually produces a budget saving because of the different tax treatment of the 3 percent being super as opposed to the 3 percent being treated as wages or salaries.