Gov’t super co-contribution strikes a chord

By Freya Purnell

The Government seems to have secured a win with its superannuation co-contribution scheme, with a recent Investment andFinancial Services Association (IFSA) poll revealing that 37 per cent of respondents deemed a co-contribution was likely to increase their personal super contributions in the next 12 months.

This figure rose to 52 per cent of respondents in the $40,000-$59,000 household income bracket, while nearly one in three people from low income households (less than $20,000) expect to increase personal super contributions as a result of the proposal.

IFSA chief executive Richard Gilbert also says the response of young people to the scheme was surprising, with half of those aged 16-24 saying that the proposal will increase their personal contributions. This was the strongest positive response from any age group.

“This group stands to be the biggest beneficiary over time and the finding seems to indicate that this group is appreciative of the Government’s co-contribution initiative,” Gilbert says.

Interestingly, 31 per cent of those from households with income greater than $100,000 per annum say they are also likely to increase their personal contributions.

Gilbert also says the findings support IFSA’s previous analysis which predicted 40 per cent of working Australians will make additional contributions if a co-contribution was offered.

For the poll, conducted by Eureka Strategic Research, 586 interviews were conducted via telephone with a representative sample of people working part-time or full-time. Respondents were read a brief description of the Government’s proposal to contribute $1.50 for each $1 of personal contributions that people earning up to $58,000 make to superannuation, and asked if it was likely to increase their personal contributions in the next 12 months.