Nick Sherry (Tasmania, Australian Labor Party, Assistant Treasurer) Share this | Hansard source

As part of the package of tax reforms that were announced last week to make the tax system fairer and simpler, there will be a number of significant improvements to the Australian superannuation system. Firstly, there will be a gradual increase in the superannuation guarantee from nine to 12 per cent starting on 1 July 2013. Secondly, there will be a new superannuation concession of up to $500 for some 3.5 million low-income earners who currently receive no tax concession on their compulsory superannuation contributions. In fact, there is a group of people who, because of the compulsory nature of superannuation, pay a 15 per cent contributions tax when some of them pay effectively no income tax, and this is manifestly unfair. Thirdly, we will be extending the $50,000 superannuation contribution cap for those over 50 with balances below half a million dollars from 1 July 2012.

The increase in the superannuation guarantee will benefit 8.4 million Australians. It will mean an 18-year-old entering the workforce will have an extra $200,000 in retirement income. For someone now aged 30 they will have an extra $108,000 and for a person aged 40 they will have some $57,000 extra at retirement. These measures will also boost the total pool of superannuation savings by some $85 billion over 10 years. The superannuation industry and the financial sector have strongly supported these improvements in the individual retirement savings of Australians. (Time expired)