Labor would increase super guarantee rate “when prudent”

Labor party policy, superannuation guarantee rate, 9.5%, 12%Labor Party superannuation policy is likely to include a faster increase to a superannuation guarantee rate of 12% rate, “when prudent.”

The ALP will debate the party platform at the National Conference in July. The ‘Consultation Draft of the National Platform‘ says that “Labor, as the party of universal, compulsory superannuation, will continue to put in place reforms to protect and to grow superannuation, to ensure the superannuation system meets an objective of providing a comfortable retirement for all Australians.”

This will include, when prudent, ending the Coalition’s freeze of the Superannuation Guarantee at 9.5 per cent, and fast-tracking the Superannuation Guarantee increase to 12 per cent, which will provide millions of Australians with higher retirement incomes.

Update: the 47th ALP National Conference included a commitment in the National Platform to end the freeze on increases to the Superannuation Guarantee and fast-track an increase to a 12% “when prudent.”

The superannuation guarantee (SG) rate was scheduled to reach 12% for the 2019/20 financial year, increasing by 0.5% per year from 2014/15. Instead the current Government has paused the rate at 9.5% until 2020/21, with a 12% SG rate only being reached in 2025/26.

“When last in office, Labor put in place reforms to ensure the long term sustainability and fairness of Australia’s retirement income system, by increasing the pension age to 67, increasing the Superannuation Guarantee from 9 to 12 per cent, forcing superannuation funds to offer low-cost MySuper accounts, and introducing the only superannuation tax concession for low income earners through the Low Income Superannuation Contribution (LISC). The Coalition has sought to either abolish or frustrate these important reforms.”

Opposition Leader Bill Shorten announced that the recently proposed changes to tax pension phase income in super funds and lower the threshold for Division 293 tax would be the “final and the only changes Labor will make to the tax treatment of superannuation.”

However the Labor Party platform may leave open the option of other changes, saying “the current system of superannuation tax concessions has seen more than 35 per cent of the value of tax concessions accrue to the top 10 per cent of income earners. Labor will put in place reforms to address this imbalance, ensuring Australia has a sustainable and fair retirement income system.”

“Labor believes in pursuing policy settings in superannuation and financial services that equitably maximise retirement incomes and take pressure off the aged pension system.”

The Labor Party policy platform is set to be debated at the 47th ALP National Conference, to be held over three days from Friday the 24th of July 2015.

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