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Nationals and Palmer party urged to keep low-income super scheme going Nationals and Palmer party urged to keep low-income super scheme going
(2 months later)
The Nationals and the Palmer United party are under pressure to block the repeal of a scheme that boosts low earners’ superannuation because it will hit workers in regional and rural Australia the hardest.The Nationals and the Palmer United party are under pressure to block the repeal of a scheme that boosts low earners’ superannuation because it will hit workers in regional and rural Australia the hardest.
Retaining the policy would deny the government $3.8bn in budget savings.Retaining the policy would deny the government $3.8bn in budget savings.
Industry superannuation funds will begin a lobbying campaign this week aimed at saving the low-income superannuation contribution scheme, armed with research showing that 24 of the 25 electorates hardest hit by its abolition are rural or regional and that 42% of employees in Clive Palmer’s Queensland regional electorate will be affected, losing about $7m a year.Industry superannuation funds will begin a lobbying campaign this week aimed at saving the low-income superannuation contribution scheme, armed with research showing that 24 of the 25 electorates hardest hit by its abolition are rural or regional and that 42% of employees in Clive Palmer’s Queensland regional electorate will be affected, losing about $7m a year.
Labor and the Greens oppose the repeal, as do the independent senator Nick Xenophon and the DLP senator John Madigan, which leaves its future in the hands of the other crossbenchers, including the Palmer United party’s four-senator voting bloc.Labor and the Greens oppose the repeal, as do the independent senator Nick Xenophon and the DLP senator John Madigan, which leaves its future in the hands of the other crossbenchers, including the Palmer United party’s four-senator voting bloc.
The scheme pays $500 into the super accounts of workers earning less than $37,000 a year and was recommended by the Henry tax review to compensate for the fact that the 15% tax rate on super contributions represents a large concession to high-income earners on higher personal tax rates but virtually no concession to those on the lowest wages.The scheme pays $500 into the super accounts of workers earning less than $37,000 a year and was recommended by the Henry tax review to compensate for the fact that the 15% tax rate on super contributions represents a large concession to high-income earners on higher personal tax rates but virtually no concession to those on the lowest wages.
It was linked by the former Labor government to forecast revenue from the mining resource rent tax and the Coalition went to the election promising to abolish it on the grounds that it was also abolishing the mining tax.It was linked by the former Labor government to forecast revenue from the mining resource rent tax and the Coalition went to the election promising to abolish it on the grounds that it was also abolishing the mining tax.
Its abolition, for all payments due after 1 July 2013, was included in the 2013 mid-year economic outlook, with estimated savings over the next four years of $3.8bn.Its abolition, for all payments due after 1 July 2013, was included in the 2013 mid-year economic outlook, with estimated savings over the next four years of $3.8bn.
“We hope to convince enough senators that abolishing this contribution is unfair. It is not a handout. Everyone earning over $37,000 gets at least $500 in tax concessions so it’s just an issue of basic fairness. It’s the tax concession that everyone else gets,” said David Whiteley, chief executive of Industry Super Australia.“We hope to convince enough senators that abolishing this contribution is unfair. It is not a handout. Everyone earning over $37,000 gets at least $500 in tax concessions so it’s just an issue of basic fairness. It’s the tax concession that everyone else gets,” said David Whiteley, chief executive of Industry Super Australia.
“People are being told to take greater responsibility for their retirement incomes, but this reduces their capacity to do that.”“People are being told to take greater responsibility for their retirement incomes, but this reduces their capacity to do that.”
Industry Super has calculated the abolition of the contribution could mean a low-income earner retired with about $20,000 less in their superannuation account.Industry Super has calculated the abolition of the contribution could mean a low-income earner retired with about $20,000 less in their superannuation account.
More than 3.6m Australians receive the payment, including 2 million women who are more likely to be paid less or to work part-time.More than 3.6m Australians receive the payment, including 2 million women who are more likely to be paid less or to work part-time.
And 24 out of the 25 worst affected seats are in regional and rural areas, most held by the National and Liberal parties.And 24 out of the 25 worst affected seats are in regional and rural areas, most held by the National and Liberal parties.
Industry Super research shows that those receiving the money in NSW include 48% of all employees in the Nationals-held seats of Cowper, held by the assistant employment minister, Luke Hartsuyker, and Page, held by new MP Kevin Hogan. This includes just over 56% of female workers in those electorates. In the Victorian seat of Mallee, held by the Nationals' Andrew Broad, 47% of workers will be hit, and in Queensland the Wide Bay seat of the Nationals' leader, Warren Truss, is the hardest hit, with 46% of workers set to lose the payment. Industry Super research shows that those receiving the money in NSW include 48% of all employees in the Nationals-held seats of Cowper, held by the assistant employment minister, Luke Hartsuyker, and Page, held by new MP Kevin Hogan. This includes just over 56% of female workers in those electorates. In the Victorian seat of Mallee, held by the Nationals' Andrew Broad, 47% of workers will be hit, and in Queensland the Wide Bay seat of the Nationals' leader, Warren Truss, is the hardest hit, with 46% of workers set to lose the payment.
Clive Palmer’s coastal seat of Fairfax has 42% of workers affected including 53% of female employees. A spokesperson for his Palmer United party said it had not yet made a decision on the issue.Clive Palmer’s coastal seat of Fairfax has 42% of workers affected including 53% of female employees. A spokesperson for his Palmer United party said it had not yet made a decision on the issue.
Madigan previously sought to amend the mining tax repeal bills so that the super contribution was considered separately, with a view to trying to save it. Xenophon said he also backed keeping the policy because “it is a good equity measure and getting rid of it just exacerbates the inequities in the lurks available to high-income earners”. Madigan previously sought to amend the mining tax repeal bills so that the super contribution was considered separately, with a view to trying to save it. Xenophon said he also backed keeping the policy because “it is a good equity measure and getting rid of it just exacerbates the inequities in the lurks available to high-income earners”.
The mining tax and carbon tax repeals and related policies such as the repeal of the low-income super contribution will be the first things considered by the new Senate.The mining tax and carbon tax repeals and related policies such as the repeal of the low-income super contribution will be the first things considered by the new Senate.