Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Superannuation



Download PDFDownload PDF

NO. 68u TREASURER

EMBARGO IMMEDIATE RELEASE

STATEMENT BY THE TREASURER THE SUPERANNUATION

PRESS RELEASE

HON JOHN HOWARD, MP

The Government has recently taken decisions in relation to the two

parts of the final report of the National Superannuation Committee

of Inquiry.

The first part of the Committee’s final report contained a

recommendation for a scheme of national superannuation for Australia.

The second part argued that there were shortcomings in the operation

of occupational superannuation in terms of such matters as the security

of benefit entitlements and the ultimate provision of income in

retirement.

The Government has decided not to introduce the scheme of national

superannuation recommended by the majority of the Committee.

This type of scheme would involve the compulsory payment of a national

superannuation contribution. In effect, this would be an additional

tax on personal income. The levy proposed by the majority involved

a 5 per cent surcharge on that part of income above 30 per cent of

average weekly earnings. Such a surcharge would impose a very heavy

burden on.middle and lower income workers.

For example, a worker on the minimum wage would have his effective tax

burden increased by almost 20 per cent. The Government is particularly

concerned about the impact of such a tax change on families where the

responsibility of raising children already imposes heavy costs.

ϊ 2

The scheme would also involve a major compulsory transfer of resources

away from those in the workforce to the aged and including the aged

on higher incomes. ,

The Government believes that it is essential that social welfare

planning be undertaken on a co-ordinated basis and that available

resources should be directed primarily to assist those people who are

most in need of assistance including in particular other dependent

sections of the community such as invalids, single parents, the sick

and the unemployed.

The needs of these groups should be looked at in the same context as

the needs of the aged. The major transfer of resources to the aged

implied in a national superannuation scheme of the type recommended

could substantially impede the Government's ability to meet other

social welfare priorities.

In addition, the Government believes that the freedom of choice

individuals currently enjoy in arranging their own affairs in respect

of income in retirement should be retained.

For many people already making what they feel are worthwhile investments

for retirement, whether in the form of insurance, savings or assets, the

imposition of a compulsory contribution to a national scheme might

not be welcome, and for very good reason.

As regards occupational superannuation, the Government has

initiated arrangements for a Task Force to be established to

consider the role of occupational superannuation in providing

for retirement and whether there is a need to revise or impose

new standards for schemes. If existing standards are regarded as

inappropriate the Task Force will make appropriate recommendations,

bearing in mind the views expressed by the National Superannuation

Committee of Inquiry. It will examine the question of union involvement

in superannuation schemes.

The Task Force will seek the advice and assistance of representatives

of the superannuation and insurance industry and other interested

parties. More information will be made available to interested

parties.

The Task Force will be chaired by an officer of my Department

and will include officials drawn from the Departments of Finance,

Prime Minister and Cabinet, Social Security and Industrial Relations,

the Taxation Office and the Social Welfare Policy Secretariat.

Canberra ACT 12 Jul 1979