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Government committed to increasing super guarantee

Government committed to increasing super guarantee

At a recent speech commemorating the twentieth anniversary of the introduction of the superannuation guarantee regime, the Assistant Treasurer and Minister for Superannuation reaffirmed the Government’s commitment to increasing the minimum superannuation guarantee percentage from 9% to 12%.

Although it has yet to be legislated, the plan is to increase the super guarantee by 0.25% in 2013/14, and progressively increase it in small increments until it reaches 12% in the 2019/20 income year.

He stated that ”superannuation is as vital a pillar for our quality of life as Medicare or the minimum wage.”

He then went on to say ”after 12% is achieved, Governments need to step right back and stop the tinkering with the tax treatment of superannuation.”

He reminded people why the planned Minerals Rent Resource tax (MRRT) is so linked up to this reform, because the MRRT is expected to pay for the tax concessional treatment of the additional 3% Superannuation Guarantee (I.e., the fact that contributions are taxed at 15% instead of the marginal personal income tax rate).

He also touched on the fact that, whilst women live longer than men, their super balances are on average 30% lower.

”Currently, around 2.1 million women get no tax benefit from contributing to superannuation, due to the 15% superannuation contribution tax being at or below their income tax rate.”

The Government is therefore acting on the recommendation of the Henry Review to, form 1July 2012, effectively ensure that no tax is paid on the 9% superannuation contributions for most Australians earning up to $37,000 and that the money is instead directed into their superannuation (by means of a direct contribution from the Government of up to $500 annually into the superannuation accounts of eligible members from 1 July 2012).

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