Monday 1st July 2013
Superannuation experts have blasted Tony Abbott’s assault on the retirement incomes of low and middle-income earners.
Chief executive officer of the Financial Services Council, John Brogden – a former Liberal leader in New South Wales – called Mr Abbott’s policy to “defer” 12% super “a bitter disappointment and a blow to the retirement savings of Australians.”
“This short-term decision will reduce retirement savings by $46 billion over the next 10 years,” Mr Brogden said. “It will also push the increased cost of an aging population onto future generations.
“There is a very strong public policy and economic rationale for raising the Superannuation Guarantee to 12%.”
He called on the Coalition to re-commit to increasing the Superannuation Guarantee to 12% after the proposed two-year deferral.
Trish Power, publisher of the consumer advice website SuperGuide, and author of several books on superannuation, called the Liberals’ decision to scrap the low-income superannuation contribution scheme (LISC) “unwise and unfair”.
She said the LISC was designed to end a situation where low-income earners were penalised by having to pay a higher superannuation tax than their income tax.
“The LISC is a long overdue and fair super policy that is a no-brainer from the perspective of retirement income policy,” she said.
David Whiteley, chief executive of the Industry Super Network, urged the Coalition to reconsider its plans, which represented “an enormous cost to individuals’ retirement incomes and the economy” he said.
Mr Whiteley said the increase in the super guarantee had been widely debated and received broad consensus in the community as critical to ensuring adequate retirement savings for an ageing population.
“It is estimated that within 20 years, people will need to support themselves for an average of 30 years in retirement.”
He said if the superannuation guarantee did not increase, taxpayers would have to foot the bill.