The Federal Government has been urged to use the May Budget to reaffirm and bring forward the increase in the superannuation guarantee from 9 per cent to 12 per cent.
The call is contained in the pre-Budget submission filed by the Association of Superannuation Funds of Australia (ASFA), which said research conducted in October last year had confirmed that superannuation and retirement incomes adequacy were “top of mind” topics for most Australians.
It said the public’s attention had been drawn to the issue of retirement incomes adequacy by both the Henry Tax Review and the Cooper Review into superannuation.
The submission said ASFA believed the Government should also use the Budget to announce the setting of a goal for the level of retirement incomes capable of delivering Australians at least a modest standard of living.
However, ASFA has made clear that it believes the Government should break the connection between the delivery of a higher superannuation guarantee and the implementation of a Minerals Resource Rent Tax (MRRT) and that it should not be the subject of the proposed tax forum to be held later this year.
It argues there is no purpose in subjecting the higher superannuation guarantee to a tax forum because it is both affordable and supported by the great bulk of the community.
On the question of the MRRT, ASFA argued there was no reason to link the measure to the provision of a higher superannuation guarantee.
“The cost to tax revenue from increasing the rate of the superannuation guarantee is relatively small in terms of the overall Commonwealth Budget,” the submission said.
“As well, an unintended consequence of linking the two might be to make the MRRT package even more complex than it already is,” ASFA argued.
