The passing of the Minerals Resource Rent Tax legislation through the Senate late on Monday night, which ensured the superannuation guarantee (SG) will lift from nine to 12 per cent, has been hailed by the super industry as historic. Speaking at the Conference of Major Superannuation Funds in Brisbane, where leading representatives of some of the country’s largest super funds also welcomed the move, chief executive of the Australian Institute of Superannuation Trustees (AIST), Fiona Reynolds, described the outcome as a significant step towards ensuring that everyone in the Australian community had enough money in retirement.
“This measure is long overdue but a very welcome one and one that AIST has long called for,” Reynolds said. “It’s nearly 10 years since super contributions were last increased and yet we’ve known for many years that 9 per cent is simply not enough for a comfortable retirement.”
Bill Shorten, Minister for Superannuation, has pushed for an increase in the SG since being appointed to the portfolio in 2010.
Reynolds also pointed out that the reform ensures the system will be more equitable for low-income earners due to the low income tax rebate.
According to the Association of Superannuation Funds of Australia, estimates show the rebate, which will come into effect for contributions made from 1 July this year, will beneficially impact 3.5 million Australians, with the majority of recipients being women in casual and part-time work.
“These reforms are good for the economy, affordable, equitable and necessary,” chief executive of ASFA, Pauline Vamos, said.
According to a report by Allen Consulting Group, commissioned by ASFA, an increase in the SG to 12 per cent will lead to a 0.33 per cent increase in real gross domestic product by 2025 compared to the no-reform scenario.
