ABC Online...
Australian workers will be "demonstrably worse off" under the Federal Government's deal to scrap the mining tax, the superannuation industry says.
The Government announced yesterday
it had reached an agreement with the Palmer United Party (PUP) to get rid of the controversial tax, whereby the schoolkids bonus would be retained until after the next election and super increases put on hold until 2021.
Treasurer Joe Hockey said the deal - which will cost the budget $6.5 billion - was not the Government's "preferred option" but was still a "damn good deal" for the Australian people.
However, Industry Super Australia chief executive David Whiteley said the freeze was not good news for Australians.
"Let's be clear — this is not a change which was expected and it is not a positive change for superannuation savings," he told ABC News Breakfast.
"A 25-year-old on average earnings over their working life could retire with $100,000 less.
"Modelling also shows that somebody earning less than $37,000 — and that is 3.5 million people in this country, 2 million of which are women — over their working life could be between $20,000 and $25,000 worse off because of the removal of the low income earners super contribution."
Mr Whiteley rejected the argument put forward by the Government that the freeze will allow employers to fund more wage rises for their workers.
"I'm not sure how many workers will be finding out they have a pay rise from their boss this morning. I'm not sure that is what we will see," he said.
"What we will see is people have less going into their super and what we will see from 2018, when people get their statements and they earn less than $37,000, there won't be a $500 tax rebate.
"People will be demonstrably worse off with these changes."
Super sting in the tail of tax repeal
Is the mining tax deal good politics for the government in the long term? Michael Cooney writes.
The Association of Superannuation Fund's chief executive officer, Pauline Vamos, said she was stunned by the announcement.
"We cannot have these constant changes to the superannuation system," she said.
"We need to set a goal for the system, we need to make sure the community understands that goal and we need to ensure somebody external to the Government and to Treasury on measuring, that we're actually keeping to that goal."
Chris Richardson from Deloitte Access Economics said the overall savings from the deal would help the Coalition bring the budget back into the black.
"These changes will actually help a bit because by slowing down the shift to higher superannuation in Australia, basically you're taking money out of something that's taxed at a pretty low rate - superannuation - and leaving it in wages and in profits, and those are taxed at a higher rate," he said.
Dave R.
