ISA critical of low income super changes
Industry Super Australia (ISA) has condemned the new Government's plan to axe the Low Income Super Contribution (LISC) as part of its repeal of the Mineral Resources Rent Tax (MRRT).
Last week, Treasurer Joe Hockey, Finance Minister Mathias Cormann and Industry Minister Ian McFarlane unveiled the framework to remove the MRRT, while re-committing to the increase of the superannuation guarantee from nine to 12 per cent by 2021.
But ISA, formerly Industry Super Network, said cutting the LISC rebate could rip an extra $30,000 from the retirement packages of low income earners and create further inequality.
"The government is seeking to balance short-term budget pressures against the need to build more adequate levels of retirement savings through SG increases," it said in a statement.
ISA was also critical of the delay in pushing the superannuation guarantee from nine to 12 per cent, which it said would create a shortfall of around $40 billion in super savings over the next seven years.
"To ensure long-term sustainability of our retirement incomes system and economic growth, it is vital there is no further delay in increasing the SG," it said.
Unlike ISA, the Financial Services Council (FSC) was generous in its appraisal of the new Government's plans.
"The Government has a clear mandate to repeal the MRRT whilst retaining the key policy of increasing super contributions to 12 per cent by 2021", said FSC chief executive officer John Brogden said last week.
The Government said rescinding the MRRT put more than $13 billion back into the budget.
AUTHOR
Staff Writer
Recommended for you
The Governance Institute has said ASIC’s governance arrangements are no longer “fit for purpose” in a time when financial markets are quickly innovating and cyber crime becomes a threat.
Compliance professionals working in financial services are facing burnout risk as higher workloads, coupled with the ever-changing regulation, place notable strain on staff.
The Senate economics legislation committee has recommended Schedule 1 of the Delivering Better Financial Outcomes legislation be passed as it is a “faithful implementation” of the recommendations.
Treasurer Jim Chalmers has handed down his third budget, outlining the government’s macroeconomic forecasts and changes to superannuation.
