There is a growing realisation throughout Australian society of the importance of retirement planning and saving for the years ahead. Australians increasingly recognise that they are likely to live longer and that the difference between a basic standard of living in retirement and a comfortable one is largely in the hands of each of us. The traditional Australian value of self reliance when applied to retirement planning can both immeasurably improve an individual';s personal circumstances and vitally contribute to Australia';s ongoing national prosperity.
Superannuation is at the heart of the retirement plans of millions of Australians. While the Howard Government';s low interest rate environment has made home ownership far more achievable and capital gains tax has been reduced to encourage other investments, superannuation remains a crucial element in planning for a comfortable and secure retirement.
The Coalition is absolutely committed to a safe, easily understood and fair superannuation system producing high yields for its members. We will pursue this goal whilst avoiding endless changes which have been an often unwelcome feature of the operation of the system over the last 20 years.
We are also committed to encouraging the development of a culture of saving and investment from the earliest age possible.
Superannuation and financial self reliance in retirement should be the right of every Australian. A Better Superannuation System will provide greater incentives for voluntary contributions; remove inequities in the system; improve the security of superannuation benefits; broaden the availability of superannuation to many more Australians; and promote the value of lifelong saving to the generations ahead.
A Better Superannuation System commits the Coalition to: assisting couples by allowing spouses to split their superannuation contributions – which is particularly important for families where one spouse is working in the home or is receiving a low income; encouraging early savings for children by allowing superannuation contributions up to $1,000 per annum to be made on behalf of children who do not otherwise have superannuation; assisting those who are self employed by increasing the current tax deduction limits for superannuation contributions; assisting those on low incomes by replacing the current $100 rebate with a co-contribution whereby the Government will match personal superannuation contributions up to a limit of $1,000 per annum; reducing the superannuation and termination payments surcharge rates by a tenth of their current level each year over the next three years (a maximum 1.5 percentage points each year); allowing the First Child Tax Refund to be contributed by the parent to their superannuation fund; recognising those who wish to continue working beyond 70 by increasing from 70 to 75 the age up to which working members of superannuation funds can make personal superannuation contributions; providing members of superannuation funds with greater control over which fund their superannuation benefits are in by providing choice of superannuation and portability; increasing fairness for employees by requiring contributions to be made by employers on behalf of their employees at least quarterly; protecting members of superannuation funds by improving prudential regulation of superannuation following consultation with the community; and allowing non-residents who have permanently departed Australia to access their superannuation benefits subject to withholding of tax concessions provided to the benefits.The Coalition will work to ensure superannuation and retirement income policy ensures that today's Australians have better and more financially secure retirements than at any other time in Australia's history.
Impact on the Forward Estimates
2002-03
2003-04
2004-05
2005-06
Total
Splitting of super contributions
0.0
3.0
4.0
4.0
11.0 Super contributions for children
4.0
8.2
12.6
17.4
42.2 Higher deduction limit for self employed
0.0
10.0
10.0
10.0
30.0 Low income earners co-contribution
0.0
96.0
116.0
125.0
337.0 Phased reduction in super surcharge
0.0
50.0
120.0
200.0
370.0 Allowing First Child Tax Refund to be contributed to superannuation
0.1
0.4
0.8
1.4
2.7 Continuing contributions beyond age 70
0.7
1.4
2.1
2.9
7.1 Reduce tax rate on excessive ETPs
0.0
5.0
5.0
5.0
15.0 Quarterly Super Guarantee contributions
10.6
-25.8
3.4
2.4
-9.4 Allow non-residents who permanently depart Australia access their super
-70.0
-110.0
-75.0
-70.0
-325.0
Total
-54.6
38.2
198.9
298.1
480.6