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Democrats must come to the party on super.

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27 June 2003


Despite the Senate's rejection of the proposed reduction in the superannuation surcharge, the Government remains committed to its revitalised approach to superannuation, Minister for Revenue and Assistant Treasurer, Senator Helen Coonan said today.

"Both the surcharge reduction and the co-contribution legislation are fundamental to the Government's push to make superannuation more attractive for a wide range of Australians.

"The surcharge reduction removes the disincentive facing those able to save for their retirement and the co-contribution will help boost the superannuation savings of lower income earners.

Despite assertions by the Democrats' spokesman on Superannuation, Senator John Cherry, the Government did indeed come to the party on our offer of a compromise with the Democrats to assist the passage of both the surcharge reduction and co-contribution Bills.

The Government offered to amend the surcharge reduction to a 1 per cent decrease per year for three years as opposed to the original 1.5 per cent.

It was also prepared to increase the upper threshold for people to receive co-contributions from $32,500 per year to $40,000. The increase in the income threshold would increase the number of co-contribution recipients by 190,000 in the first year.

The compromise offered weighed the benefit of the reforms in the favour of lower income earners in a 60-40 split.

"Senator Cherry has admitted there is a need for `amelioration' of the surcharge but the Democrats have so far refused the Government's compromise.

"This decision by the Democrats effectively relegates both Bills to the steadily increasing pile of legislation being blocked by the Senate," Senator Coonan said.

"The Government offered a fair and balanced compromise which delivers the policy intent underlying the Bills and addresses concerns expressed by the Democrats that the overall benefits of the package needed to be re-balanced in favour of lower income earners.

"I call on the Democrats to accept this offer and allow the benefits of the Government's superannuation reform to flow to those who need it most and those who are providing for their future."

© Commonwealth of Australia 2000