AIST explained to the Senate Economic Legislation Committee that LISC reflected changes in Australia’s work patterns, including an increase in part-time and casual employment.
The LISC scheme currently benefits 3.6 million Australians by providing up to $500 a year in superannuation for those earning less than $37,000, according to AIST.
AIST chief executive Tom Garcia said LISC “provides more equitable arrangements for over 30 per cent of the total Australian workforce and 50 per cent of the Australian female workforce.
“It also recognises the changing pattern of Australia’s workforce, where greater demands for more flexible work arrangements need to be reinforced with policies that recognise part-time (lower paid) work,” he said.
In a submission to the Senate committee, AIST stated the labour market has become significantly more flexible in the past 40 years, with over a quarter of Australian workers now in part-time employment.
Forty years ago this figure was only around one in ten.
Mr Garcia said many of these part-time workers are women and the former non-working parents in both single-parent families and dual-income families.
He said there will also likely be a significant increase in the number of older workers and a stronger demand for part-time or flexible working hours.
AIST also argued in its submission that the LISC scheme entitled low-income and part-time earners to a tax benefit on their compulsory super contributions, just like the other two thirds of working Australians.
Mr Garcia said LISC was one of the best policy measures since compulsory superannuation, as it is well targeted; it automatically benefits millions of workers and does not require voluntary contributions.
According to Mr Garcia, it benefited more than four times as many Australians compared with the government Co-Contribution scheme.
“Compulsory superannuation is the fundamental core to the retirement savings of millions of Australians, and the LISC would more equitably underpin the government’s commitment to Australia’s three-pillar retirement system, which includes commitment to a compulsory system of retirement savings through superannuation,” he concluded.
