“The ACTU is very concerned about the whole equity issue and have constantly been hammering the living daylights out of poor Bill about the concessional tax system, about, you know, we do believe that it should be a progressive tax system, particularly on contributions, and that’s something that we are very, very, concerned about,” Kearney says.

She says the ACTU is sanguine about the impact on business of raising the SG.

“Is 12 per cent enough? Well, the trade union movement has always argued for 15 per cent from the very beginning – and I admit that there probably wasn’t a great deal of science around that – at the very beginning, when Keating was discussing that 15 per cent was the perfect figure,” she says.

“But, since then of course, there has been a great deal of work done. There’s been a lot of modelling and a lot of analysis and whilst we think we would like to move to 15 per cent – and I know that there’s probably some, a lot more people here who can talk to that, with a lot more clarity, than me – we do believe that 12 per cent is a good first step, and we’re very willing, to support that.

“Through the enterprise bargaining process of course, we’d have a lot of people who are already at 15 per cent – one in four businesses already pay 10 per cent. So, there are a lot of people that have already achieved that without the sky falling in for the business, and without it being an economic disaster, so, whilst I don’t think we’ll have Utopia, I think we have a pretty good sustainable system.”

Gruen says that the flat taxation of superannuation creates inequities.

“The great achievement of the previous Labor Government was to establish the system – the great flaw was the idea that it should be done under a flat tax,” he says.

“And one of the things that we’ve got ourselves into in super is a sort of trench war. And the trench war involves a bunch of people who say, adequacy is very important and therefore we should protect the tax concessions, go from 9 to 12 per cent and so on.

“The way in which we should be taking the heritage of Bill Kelty and Paul Keating is [that] equity should be addressed, but so should comprehensiveness, and I think we should grow the size of the contribution – make it more equitable, make it more comprehensive, and then you’ve got something that I think people would really react well to.”

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