Govt defends cost of super changes

The superannuation changes announced in the Federal Budget, including the lifting of the super guarantee to 12 per cent, will cost the Government $2.4 billion over the next four years, according to the Minister for Financial Services, Chris Bowen,

In a ministerial statement delivered to the Parliament this week, Bowen said those who suggested the changes to superannuation wouldn’t cost the Government any money did not understand the facts or, worse still, chose to wilfully misrepresent those facts.

“Increasing the superannuation guarantee, refunding the tax paid on superannuation for low income earners and raising concessional contributions for those aged 50 or over with lower superannuation savings reduces the tax burden on working Australians,” he said. “As such, these measures will cost around $2.4 billion over the next four years.”

Bowen also claimed that it was the level of Australia’s superannuation savings that had helped the country weather the global financial crisis.

“In the 2009 financial year, at a time when liquidity was being rapidly withdrawn from markets around the world, Australia remained an attractive place to raise capital,” he said. “Australian listed companies raised $90 billion of equity. Investor support, including from Australian institutional investors, helped to restore the capital base of companies that together employ over 1.6 million Australians.”

“To put this in context, at the height of the financial and liquidity crisis, a greater proportion of the total market capitalisation of listed companies was raised in Australian than in any other major economy,” Bowen said.