The Government will make the superannuation system fairer by ensuring that low income individuals earning up to $37,000 a year effectively pay no tax on their superannuation contributions.
Most people pay 15% tax on their superannuation contributions.
“For too long, the superannuation system has not properly rewarded contributions from low income earners,” the Minister for Superannuation Bill Shorten said.
“The concessional tax treatment of superannuation is an important part of the compulsory savings. But Labor are now making sure that whatever you earn you get the benefits of concessional tax because we’re scrapping the tax altogether if you’re on a low income.”
“From today, the Gillard Government is giving a big helping hand to low income individuals prepare for life after work by helping them build their superannuation savings.”
“This is great news for Australia’s lowest paid workers, and for people who might be working part-time like working mums, students and mature aged Australians.”
“For example if you work a day or two and week and therefore earn up to $37,000 a year, you will now see the 15 percent tax you used to pay on your superannuation abolished. Less tax on your super contributions means more money steadily building up for a secure retirement.”
The measure, known as the Low Income Superannuation Contribution, is funded by the Minerals Resource Rent Tax and is one of the many ways the Gillard Government is spreading the benefits of the mining boom to working Australians. Tony Abbott has not ruled out a repeal of this measure should he win Government.
“As a result of this reform, the superannuation savings of low paid Australians will be boosted by almost $1 billion a year.”
“That’s $1 billion every year which instead of being taken in tax, is going straight into the nest eggs of everyday Australians to help them secure their retirement.”
“And of course it comes on top of Labor’s commitment to lift the universal superannuation rate from 9 to 12 percent in the years ahead.”
“Sadly the Liberal Party’s destructive negativity means that they haven’t ruled out taking $1 billion out of the pockets of Australia’s lowest paid workers and give it back to billionaires.”
The 3.6 million Australians who will benefit from this reform includes:
- Around 1.1 million workers in NSW
- Around 910,000 workers in Victoria
- Around 800,000 workers in Queensland
- Around 260,000 workers in South Australia
- Around 360,000 workers in WA
- Around 90,000 workers in Tasmania
- Around 30,000 workers in the NT
- Around 50,000 workers in the ACT
3.6 million people equates to 3 in every 10 workers.
Mr Shorten’s Media Contact: Sam Casey 0421 697 660
