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Senate will reject super surcharge cut unless government comes to the table.

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Senator John Cherry Australian Democrats Superannuation Spokesperson RD JUNE 23 , 2003 MEDIA RELEASE 03/449

Senate will reject Super Surcharge cut unless Government comes to the table The Federal Government’s superannuation package is set for a major rejection in the Senate today, with the rejection of the $525 million high-income earners surcharge reduction bill because of the Government’s refusal to negotiate on improving its low-income earners incentives.

Democrats’ Superannuation spokesperson Senator John Cherry said the Democrats would be moving against the surcharge cut “in full” because of the failure of the Government to come to the table and negotiate an amendment.

“By 2005, when the three-stage 4.5% surcharge reduction is fully operational, the Government will be giving away an extra $290 million in tax cuts to high-income earners, but only $115 million in tax incentives for low-income earners’ superannuation,” Senator Cherry said.

“That balance is fundamentally wrong and we can’t accept it. The Democrats offered a compromise of halving the tax cuts to high-income earners and using the savings to double the co-contributions for low-income earners.

“This offer has been rejected by the Government. As a result, its co-contribution will start phasing out at the very low salary of $20,000 compared with the $30,000-$40,000 range our proposal could have funded.

“Under our plan, up to one million additional low-income Australians earning up to average earnings would become eligible for the Government’s maximum $1,000 co-contribution for making voluntary payments into super.

“The Government’s intransigence is now denying superannuation tax relief for both high and low-income earners. But, we will not pass a tax package that provides almost three times the benefits for high-income earners. A more balanced package would have won Democrat support.

“The Democrats will be supporting the $355 million low-income earners superannuation co-contribution bill when it is debated in the Senate tomorrow, although the scheme is too limited in its scope and needs to be extended to a wider range of low-income earners,” Senator Cherry concluded.

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