Workers lose promised super after Abbott cans mining tax
WORKERS across the country will lose seven years of promised superannuation increases after the Abbott government struck a last-minute deal to repeal the mining tax on Tuesday.
The deal with the Palmer United Party and Australian Motoring Enthusiasts would essentially deliver both an immediate repeal of the tax but keep spending measures until after the next election.
It would see the spending measures associated with the tax retained, including the income support bonus and Schoolkids bonus until December 2016 and the low-income super contribution kept until June 2017.
But the Schoolkids Bonus would also become means-tested, so only those families earning $100,000 a year or less would get the payments.
Sealed only minutes before Finance Minister Mathias Cormann moved to gag debate in the Senate to pass the changes; it sparked accusations by Labor of a "stealth attack" on the Senate.
Opposition Leader in the Senate Penny Wong described it as a "dirty deal", which the government was using to "put their hand in your pocket" and take "seven years of superannuation increases".
The new legislation, which passed the Senate on Tuesday, will strip promised Labor increases to compulsory superannuation contributions from employers to workers until 2021.
Currently set at 9.5% of an employee's income, the compulsory super contributions was last year expected to rise to 12% from 2019.
But the government's last-minute changes to the mining tax repeal bills, which include the changes to superannuation, would keep it at 9.5% until 1 July 2021.
The contribution rate would then rise to 10% and by 0.5% each year from July 2022 until it reached 12%, delaying the promised 12% rate until 2026.
Industry Super Australia chief executive David Whiteley said the changes were "short-sighted" which would hit all Australians super accounts to the tune of "tens of thousands of dollars".
The ISA estimated the changes would see a 25-year-old "average income earner" lose about $100,000 in super contributions across their working life.
PUP leader Clive Palmer said he had agreed to the government's proposal, as it would give people more money in their pockets sooner, rather than putting it away in super.
Senator Cormann said after the next election, it would "be up to the next parliament" to decide what would happen to the bonuses and super contributions.
Treasurer Joe Hockey confirmed the retained bonuses would have a "negative impact" on the budget, despite some savings from the mining tax repeal.
"This is not our preferred option, but it's the only option we have on the table," he said.
"If people think this is going to have a long-term impact on their superannuation, blame Labor. This is their fault."
- APN NEWSDESK