We’ve tried to stay away from ‘Yes, at the end of the day you’re going to have 3 per cent less in your salary’, particularly to low income people. So I’m just after some insights from the Minister, you’ve got the good political brain, on how to deal with some of these issues. Minister Bowen: Sure. Firstly, I agree. I think the superannuation reforms we announced on May 2 have been popular in the community, because I think they now understand superannuation, and look at their balances and think, “Well, it could be better”. And like you, in dealing with the issue of “Does it come out of our small businesses, or does it come out of our salaries?”, I pointed to history. Between ’92 and 2002, real labour costs went down, and there was a trade-off. Now, the small business lobby says a couple of things. They say, “Well, there was centralised wage bargaining then, and there isn’t now”. I don’t accept that that’s relevant, frankly.
There’s still enterprise bargaining, and if anything there’s more of a focus on costs. So, I think the majority of people do recognise it as a tradeoff and are happy about that, and accept that. And that a combination of it happening over time, gradually – and we can have a long talk about how gradually it’s happening but we spend a lot of time thinking about how gradually we should do it, and again internally and within government there are all sorts of options both ways about doing it more quickly and even more gradually than we determine. But we think we got it about right. And the degree of complaint from the small business lobby tells you that, yes, it is necessary to do it gradually, and the fact that I’ve been able to point very clearly to the fact that we’re doing it gradually, and we’re doing it more gradually than the original SG came in, shows that there’s plenty of time for it to be built into wage negotiations. Also it’s linked to the corporate tax reduction. Yes, only incorporated companies get it, but there’s 720,000 small businesses that are incorporated, and that’s worth bearing in mind.
So I think the key is talking about the long-term benefits of superannuation and we are not doing something new here, we are learning from history, and everybody benefits. And it’s not a tax on small business, it’s just clearly not. Fiona Reynolds: I’m not worried about the gradualism – that was in line with policy anyway. But how serious do you think that the Opposition are about not supporting any SG increase? Minister Bowen: I think they’re deadly serious. Tony Abbott has an ideological objection to superannuation. He says all tax concessions for superannuation should be abolished. So I think they will oppose it down to the last vote in the Parliament, and they will run a campaign in the small business community to oppose it, and they will make it one of their key planks. I think it is deadly serious. Tony Cole: What about the cross benches? Minister Bowen: Well, there’s a long way to go with them, and obviously it depends on whether it gets put before the parliament before or after the election as to which cross benches are there.