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Low income super payments exceed expectation.

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Australian Democrats Press Releases

Senator John Cherry Democrats Senator for Queensland Australian Democrats spokesperson for Superannuation

Dated: 17 May 2005

Press Release Number: 05/257 Portfolio: Superannuation

Low Income Super Payments Exceed Expectation

Low income earners superannuation co-contribution exceeded its original projection by more than 25 per cent, vindicating the Democrats push to expand the scheme. Democrats superannuation spokesperson Senator John Cherry, who persuaded the Government to widen the scheme and double its funding, said he was delighted that the publics pick up rate exceeded expectations.

The release of the third quarter data for 2003/4 shows the number of low income earners claiming the co-contribution has risen to 547,140 and in total the amount paid rose to $291 million. That is 25 per cent ahead of the Government forecast of $230 million and treble the original funding before the Democrats insisted on enhancing the co-contribution, he said.

The figures show that Government programs which encourage low-income earners to save for their retirement can be hugely successful. It also demonstrates the folly of the ALP in suggesting that the program would not work.

Given Australia has a negative household savings rate, schemes which clearly encourage low and middle income earners to save more, deserves support.

"Unfortunately the only superannuation news in the Federal Budget was the removal of the superannuation surcharge. This only helps about 4% of taxpayers who earn over $100,000 a year, but costs the Government a massive $2.5 billion over four years.

$2.5 billion over four years is a huge amount of revenue that would preferably be used to encourage all Australians to save for their retirement. It could have been used to extend the co-contribution to middle income earners or reduce the contribution tax rate of 15%, boosting the superannuation savings of more Australians," Senator Cherry concluded.