The Coalition has said it will delay the increase of the super guarantee from 9 per cent to 12 per cent if it wins the September federal election.
“The measured change we announced last night helps us fund income tax cuts and pension increases without a carbon tax, which will leave most people better off now,” said Senator Mathias Cormann, shadow assistant treasurer for the Coalition.
He said the Coalition has made a firm commitment not to make any unexpected detrimental changes to super in its first term of government if elected.
“We will stick to that commitment. No surprises and no excuses.
“The change we announced yesterday was a measured change to deal with the budget emergency we’re in after almost six years of budget mismanagement by Wayne Swan.”
Cormann said the party has promised not to rescind the increase in compulsory super to 12 per cent, but will be delaying the phase in to the full 12 per cent by two years.
If the Coalition’s strategy falls into place, the SG will reach 12 per cent by 2021, rather than the 2019 projection by the Labor government.
Cormann said the delay will allow workers to retain more of their money pre-retirement to help with their cost of living pressures now.
“To the extent that it is funded by business, this is a saving for business which helps them keep people in jobs at a time when Labor is predicting a rise in unemployment in their budget.
“And it helps us achieve a saving of $1.1 billion a year by 2016/17,” Cormann said.
Bill Shorten, minister for superannuation and financial services, has criticised the Coalition’s stance, saying superannuation should be a political no-go zone.
“…It should be a safe haven,” he said in a doorstop interview last week.
“It shouldn’t be subject to new taxes and the amount people have should increase.”
Shorten said the proposed two-year delay will cost a 30-year old in the workforce today earning average full-time weekly earnings $20,000 by the time they retire.
“What this means is that Australians at the age of 30 will be down $127,000 by the time they retire.”
The super industry has echoed Labor’s concerns, saying Australians saving for their retirement will suffer as a result of delays.