Confirmed rise to 12% super guarantee, Bill Shorten says vital to boosting nation’s savings, and funded by deferred wage rises

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The Gillard government’s superannuation reforms that passed the federal parliament this week will deliver big improvements in our nation’s retirement savings. For millions, it puts the golden goal of lifetime income security within reach. We know many Australians do not have enough money saved to comfortably retire. Increasing superannuation is also terrific for the Australian economy. By 2035, the national savings pool will have been boosted by $500 billion thanks to 12 per cent superannuation. This means more capital available for Australian enterprise and making us less reliant on overseas borrowing. The government does not claim that the mining tax literally pays for the increase to an individual’s superannuation. A core pillar of our retirement savings system is that, if we are going to make saving compulsory, we should also tax it concessionally. Taxing super concessionally (at 15 per cent) rather than at higher marginal tax rates comes at a significant cost to the budget. Treasury forecasts a cost to the budget of $240 million in 2013-14 and $500m in 2014-15, as we lift the rate towards 12 per cent. Revenue from the mining tax ensures the lift is affordable.  22 March 2012  by Bill Shorten, in The Australian, page 28

Workers’ pay rises will fund super boost, says Shorten
Workplace Relations Minister Bill Shorten has rejected union calls for employers to fund an increase in the superannuation guarantee, insisting workers will have to defer part of their annual pay rises for the next seven years to meet the cost. Rejecting complaints that lifting the superannuation guarantee from 9 per cent to 12 per cent would cost employers $20 billion a year, Mr Shorten has confirmed the money will come from “deferred wage increases” worked out between employers and employees during wage negotiations.   22 March 2012 by Matthew Franklin, Ewin Hannan, in The Australian, page 1

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