Latham unveils Labor super policy

The Federal Opposition has sought to take control of the superannuation debate by renewing its promise to reduce the contributions tax to 13 per cent at the same time as establishing a minimum retirement income target of 65 per cent at age 65.

The Federal Opposition leader Mark Latham says the Australian Labor Party is determined to provide additional incentives for superannuation and will cut the contributions tax and hold down fees and charges.

“Labor is committed to reducing the contributions tax by 2 per cent, from the current 15 per cent, to 13 per cent over four years,” he says.

Latham says the full funding details will be outlined by Labor after the May budget and prior to the next election.

On the centre-piece of his announcement, the 65 per cent at age 65, the Opposition leader says that the target does not represent a guarantee of income but a national goal to guide superannuation policy.

Latham says that 65 per cent of gross pre-retirement income has been widely acknowledged by leading retirement experts and industry organisations as the appropriate level of income necessary to maintain a decent living standard in retirement.

“After 30 to 35 years work, lower income earners will be able to reach 65 at 65 comfortably through a combination of the superannuation guarantee, the age pension and the current limited co-contribution,” he says.

“However as we move up the income scales, people will need to make super contributions above the compulsory 9 per cent to reach the goal of 65 at 65,” Latham says.