Incentives, not compulsion, the best path for superannuation: Cormann
Shadow Minister for Superannuation Mathias Cormann has reaffirmed that the Coalition will not repeal the increase in the superannuation guarantee (SG) from 9 to 12 per cent, despite its in-principle opposition.
Rather than raise the SG, the Opposition preferred to increase the retirement savings of Australians by providing incentives for voluntary contributions, Cormann said.
"We have been concerned about the Government's moves to dramatically cut the concessional superannuation contribution rates, which has severely restricted people's capacity and enthusiasm for making additional voluntary contributions," he said.
To explain the Opposition's position, he pointed to the Henry Review, which recommended that the SG remain at 9 per cent. He added that the Henry Review found an increase in the SG would hurt low and middle-income earners by reducing their pre-retirement quality of life.
With the increase in the SG projected to cost $3.6 billion once fully phased in, Cormann said the Government would be unable to fund it with the Minerals Resource Rent Tax, which he said was expected to raise $3 billion.
The Opposition would also improve competition in the superannuation industry, Cormann said.
"If the current Government has not acted to implement an open and transparent process for the selection of default funds, we will act on that very swiftly upon coming into Government," he said.
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