Super changes mean more money for you

Kevin Rudd has agreed to increase employer super contributions to 12%  a big win for nurses and Australian workers.

The Rudd Government’s decision to accept the recommendation of the Henry Tax Review to increase employer superannuation contributions to 12% from the current 9% is a big win for Australian workers.

The increase will be phased in over several years to ensure there is minimal impact on workers’ take-home pay.

The ACTU said unions will still need to bargain hard to lift the superannuation contributions up to our long-term goal of 15%.

Low-paid workers especially stand to benefit from the new super win.

In addition to the increased employer contributions, workers on less than $37,000 a year will receive a Government contribution of up to $500 a year. This effectively means they will pay no tax on their super.

The superannuation savings of 3.5 million low-income earners will be boosted by $830 million.

ACTU modelling shows that together these two measures will deliver an extra $108,000 in retirement for a 30-year-old worker earning average full-time wages.

NSWNA Secretary Brett Holmes said many employees in aged care will have a boost to their retirement incomes.

‘We expect a large number of AiNs in aged care will benefit from the changes,’ he said.

A big win for industry super funds

Garry Weaven, the chair of Industry Funds Management, said the new changes will lead to a more transparent, fairer and better superannuation industry.

‘The milestone has been achieved because the industry funds themselves have demonstrated commitment to a better way of superannuation provision,’ he said. ‘It’s a model that puts net benefits to members at the centre rather than the rights of service providers to make profits for their shareholders.’

There are other changes in the Henry Review, accepted by the Government, which aim to improve fairness by giving concessions to those with the biggest need to increase their retirement savings.

Individuals aged 50 or over with total superannuation balances of less than $500,000 will be able to make up to $50,000 in superannuation concessional contributions.

Brett Holmes said this will allow individuals to ‘catch up’ on their superannuation at a stage in their lives when many are able to do so.

‘It will particularly benefit women, including nurses, who have had periods outside the workforce,’ he said.

Mining profits to be used for the national wellbeing

Another key recommendation in the Henry review that has been accepted by the Federal Government is the introduction of a Resource Super Profits Tax. The ACTU and key mining unions have endorsed the introduction of this tax. It will apply to mining companies that are making super-normal profits. Mining unions say it will not threaten jobs or mining exploration and the proceeds will help to even out Australian economic development across regions and industries.

‘It will ensure that all Australians benefit from the resources boom – not just highly profitable mining companies,’ said ACTU Secretary Jeff Lawrence.

Super gains for workers won in the Henry Tax Review

  • An increase in the employer superannuation contribution from 9% to 12%
  • A boost in the super of low-income earners by $500 a year
  • An extension of the $50,000 concessional contributions cap for over 50s