A seven-page document outlined the areas in which the Coalition would look to save money, suggesting that a “re-phasing” of the increase in the superannuation guarantee would lead to $1.6 billion in savings.
By not proceeding with Labor’s plans to save low-income earners from spending more than their marginal tax rate on super savings, the Coalition expects to save $3.7 billion over forward estimates.
Both super savings were listing as savings under the Mineral Resources Rent Tax (MRRT).
Australian Institute of Superannuation Trustees (AIST) president and Women in Super (WIS) chair, Cate Wood, said low income earners and women deserve a better deal in retirement.
Re-directing $5.3 billion away from the super system over the next few years – most of it away from low income earners – is a “false economy” because those extra super savings would reduce budgetary pressure on future governments to fund the Age Pension, Ms Wood argued.
“The more money that is re-directed away from the super system, the higher the cost to future governments to provide the age pension to an ageing population,” she said.
“We need the SG to rise to 12 per cent as quickly as possible if more Australians are to retire with adequate incomes. And we also need the very effective, well-targeted LISC scheme that, in addition to helping the low paid save for their retirement, corrects a tax anomaly whereby those earning less than $37,000 a year were paying more tax on their take home pay than their super.”
Ms Wood said it was pleasing the Coalition had included a SG component in its paid parental leave scheme but there is a greater need for policies to address the gender retirement savings gap and other inequalities in the super system.
“While a paid parental leave scheme with a super component is a very welcome addition to Australian workplaces, it doesn’t replace the need for measures to improve the retirement outcomes of the low-paid.
“More than a third of the female workforce qualify for LISC - many of whom are working part time on their return to work after having children .These women will miss out on an annual boost to their super of up to $500,” Ms Wood said.
In other measures, the Coalition planned to save $5.2 billion by scrapping 12,000 public sector jobs and $1.3 billion by cutting the humanitarian refugee intake.
Other savings the Coalition linked to the MRRT included $4.6 billion from abolishing the schoolchildren bonus and $2.9 billion from discontinuing the instant asset tax write-off and cancelling loss carry-back provisions.
A number of measures linked to scrapping the carbon tax included $5.1 billion from discontinuing business compensation measures.
The Coalition also proposed a new 1.5 per cent levy on company taxable income above $5 million to help finance its paid parental leave scheme, which it said was fully funded on an ongoing basis and results in a net benefit to the Budget of $1 billion.
Total savings in the Coalition document amounted to $31.6 billion over forward estimates, although the document did not reveal the calculations behind the savings.
