The Hon. Bronwyn Bishop MP, Shadow Minister for Seniors introduced legislation which would have allowed those over 70-years of age and still working to continue their entitlement to the super guarantee. YOURLifeChoices asked Bronwyn Bishop about the driving factors behind this bill and other proposed changes to superannuation legislation.
Since these questions were asked of Bronwyn Bishop, the Labor Party has stopped a vote on the Superannuation Guarantee legislation citing a technicality.
Q. Why have you introduced this bill?
The Coalition took to the 2010 Federal election the promise that, if elected we would abolish the Superannuation Guarantee Age Limit of 75 from 1 July 2013 and to enable all employees over 70 to receive their superannuation entitlement like every other worker. In the new parliament I introduced a Private Members Bill to honour this commitment to the Australian people.
Having an age limit on the Superannuation Guarantee unfairly discriminates against mature age workers. Under the Coalition’s plan, any worker, no matter their age, will be guaranteed to receive superannuation contributions from their employer.
•tabolishing the limit would be equitable and eliminate age discrimination
•tabolition would encourage older workers to remain in the workforce at a time when the ageing of the population is increasing pressures on the labour supply and the Budget
•tthe retention of older workers in the workforce would boost the economy compared with a situation where they retired, and
•tolder workers possess skills which would otherwise be not utilised.
Q. How will this be funded? How much will it cost?
This is not a bill that requires funding. Rather the bill simply allows those over the age of 70 the right to be paid superannuation by their employer and to remove the provision that currently all superannuation payments for people between 70 and 75 are tax deductible. I am proposing an amendment to the tax act to similarly allow tax deductibility for those over 75 in the hands of the employer. Accordingly many pension payments would be eliminated or deferred resulting in savings to the Commonwealth.
Q. How many Australians over 70 does this currently affect? – Also, what percentage of this part of the population?
Whilst this is currently a small percentage of the population (April 2011, 0.9%, being 98,000, Source: Labour Force, Australia, Detailed – Electronic Delivery, Apr 2011, 6291.0.55.001), those Australians who wish to remain in the workforce, no matter how small the percentage, should retain the right to do so. There is a large cohort of Baby Boomers who want to remain in the paid workforce, they enjoy working, and the Coalition believes that they should not be discriminated against on the basis of age. Australia needs mature age skilled workers to remain in the paid workforce.
Q. Would it not be better to push for an immediate increase in the percentage (ie increase on current 9%) for those, say, aged 60 and over? As this might benefit a more relevant working group?
No. The aim of the legislation is to remove discrimination and have mature age workers treated equitably.
Q. Currently the coalition does not support the mining super tax to raise SGC from 9% to 12%. Is this position likely to change or does coalition believe this amount should stay at 9% across all age groups?
The Coalition supports superannuation and the current superannuation guarantee of 9%. However there has to be a limit to any compulsion enforced by government.
As Minister Shorten has admitted himself, workers would ultimately have to pay for an increase in the superannuation guarantee to 12% via a reduction in their take-home pay. Australian workers should have the option for example to save for their retirement by paying off their mortgage rather than being forced to put more of their own money into superannuation.
The government’s own Henry tax review incidentally agreed that the compulsory superannuation guarantee of 9% struck the right balance between pre and post-retirement income.
The Coalition as a matter of principle prefers to encourage voluntary contributions to superannuation and saving more generally rather than to forcibly divert even more of Australians’ incomes into superannuation accounts.
We are currently reviewing the policies that we took to the last federal election and examining ways to encourage voluntary saving.
Q. Given the Federal Government proposed cap on super contributions for those over 50 with a super fund balance of over $500,000, (back to $25,000 from July 1 2012), does the coalition agree with this proposal – or is it a lost opportunity to support those at an age and stage when they may be able to afford to contribute higher amounts to ensure self-funding in later years/retirement?
Labor’s decision to halve concessional contribution caps was wrong;
We are in favour of providing tax incentives encouraging people to make additional voluntary contributions to their super savings; in particular people who have reached a stage in their life where they have more discretionary income and are increasingly focused on their retirement needs;
Our intention would be to make those concessional contribution caps more generous again in the future;
However, given the state of the Budget after four years of Labor with four successive deficits and $107 billion in government net debt, we will make specific decisions about if and when we can go ahead with this closer to the next election when we know what the state of the Budget is at that time and we have a better handle on what the Budget can afford.
YOURLifeChoices would like to thank The Hon. Bronwyn Bishop for her response. We will also seek a response from The Hon. Nicola Roxon, Minister for Health and Ageing.
Do you want to have your say? Are either of our main political parties really interested in Australia’s ageing population and seniors?
Are either of our main political parties really interested in Australia’s ageing population and seniors? Read The Hon Bronwyn Bishop’s responses to YOURLifeChoices questions and have your say.