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Superannuation meeting



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THE TREASURER

53

PRESS RELEASE JOHN KERIN MP

STATEMENT BY THE TREASURER, JOHN KERIN, MP

SUPERANNUATION MEETING

Today the Minister for Industrial Relations, Peter Cook, the Minister Assisting the Prime Minister for the Status of Women, Wendy Fatin, and I met with representatives of the ACTU, major employer groups, the Superannuation Fund Industry, and

Ministers John Fahey (NSW), Keith de Lacy (Qld), and Bob Gregory (SA) representing all State Governments.

The meeting was called to discuss the Government's intention to implement the Superannuation Guarantee Levy and its integration with retirement incomes policy objectives. Our discussions were wide ranging and I thank all participants for their

contributions. The full agenda of retirement incomes policy issues were considered:

* Importance of Superannuation in fostering increased self-provision for Retirement and the long-term desirable level of Superannuation Cover

* Timetable for increasing Superannuation Cover

* Aspects of the Superannuation Guarantee Levy (SGL), including thresholds and exemptions

* The relationship between the Levy and Award Superannuation

* Education/Public Information on obligations under the SGL

* Form of Retirement Benefits (ie lump sums or annuities/pensions)

* Preservation Requirements: (a) adequacy of current requirements; and (b) discrepancy between the current preservation age and the pension age

* Scope for Compulsory Employee Contributions

* Effect of SGL on current tax concessions for Member Contributions

All participants expressed general support for an appropriate retirement incomes policy founded on a dual system comprising the age pension and a key role for increasing private provision through superannuation.

Agreement on the Government’s Budget proposals was not achieved, nor was this expected. The Government will be guided, however, by the views expressed at today's meeting it proceeds towards finalising the details of the

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I, together with other Ministers in appropriate circumstances, will continue to consult with relevant parties, including welfare, consumer and women's groups. My officials will also consult widely on the technical design details of the new measures.

Later this year I will release an information paper, setting out the final design details of the Levy, to provide the basis for broader community discussion. Legislation is expected to be introduced into Parliament in the 1992 Autumn sittings.

As I announced in the Budget, the Government will introduce a Superannuation Guarantee Levy commencing on 1 July 1992 to progress retirement incomes policy objectives. The Levy will underpin those objectives by providing:

* a major extension of superannuation coverage to employees not currently covered by award superannuation;

* an efficient method of encouraging employers to comply with their obligation to provide superannuation to employees; and

* an orderly mechanism by which the level of employer superannuation support can be increased over time, consistent with retirement incomes policy objectives and the economy’s capacity to pay.

The Government will legislate a prescribed level of superannuation support, which employers should provide for each of their employees.

From 1 July 1992, the prescribed level will be 5% of ordinary time earnings. The Government will gradually increase the level to 9% by 2000-01. Small businesses will be phased into the system, starting from a level of 3% from 1 July 1992, thereby moderating the immediate labour cost impact of the measure on small business.

Those employers that do not comply with the prescribed standard will be subject to a Superannuation Guarantee Levy, equivalent to the shortfall in their superannuation contributions plus an additional amount as a proxy for superannuation fund earnings. Those employers that provide superannuation support at or above

the prescribed standard will not be subject to the Levy.

26 September 1991

Further information: Simon Grose (06) 2777 900