Business calls for Super Bill to be split from mining tax

Analysis

Business calls for Super Bill to be split from mining tax

Legislating for superannuation increases along with the mining tax Bill will mean there is no incentive for unions to agree to trade-offs between wages and super payments, major business groups have warned.

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Legislating for superannuation increases along with the mining tax Bill will mean there is no incentive for unions to agree to trade-offs between wages and super payments, major business groups have warned.

The Australian Chamber of Commerce and Industry (ACCI) and the NSW Business Chamber have called on the Federal Government to split its superannuation levy Bill from the mining tax Bills, so there can be proper debate on the issue.

ACCI’s chief executive, Peter Anderson, said de-coupling these Bills ‘is now the only way to give the funding base for retirement incomes policy the attention it deserves, without it being marginalised on the coat-tails of a debate about how the resource industry should be taxed’.

Serious debate


Anderson said he had written to the government, Opposition and independent members of the House of Representatives today urgently calling for these Bills to be separated, so there can be a serious parliamentary debate about a viable and fair funding basis for retirement incomes.

This would mean the superannuation legislation would be stalled until a ‘fair and workable’ funding base could be found.
In part, the letter reads:
‘If the parliament enacts this levy increase, it will effectively kill off any chance of the move from 9% to 12% being funded as part of a wage-superannuation trade-off. Unions would have no incentive to discount future wage rises for an obligation imposed by the parliament on employers. The government’s planned funding basis would be seriously undermined.’
The Superannuation Levy Bill proposes seven increases between 2013 and 2019 to the employer funded superannuation levy, lifting it from 9% of payroll to 12%.

Not funded
 
‘It is not funded by the mining tax, and indirect tax changes to business taxation in the mining tax package go nowhere near providing a funding base for what will be a $20 billion annual increase in employer costs, once implemented,’ Anderson said.

‘A 1% cut in the corporate tax rate is a fraction of the higher employer levy, and more than 200,000 unincorporated employers would pay the levy but get no corporate tax cut. The accelerated small business asset write-off is good policy, but largely a timing change benefitting cash flow rather than a tax cut.’

NSW’s peak business organisation, NSW Business Chamber, has backed ACCI’s call.

Furphy

‘It is a Government furphy that the increase in superannuation from 9% to 12% will be funded by the Mining Tax, it will be funded by employers,’ said Chamber CEO Stephen Cartwright.

‘The business community wants a fair hearing on the impact of an increase in superannuation on the financial viability of Australian businesses — not to see it rammed through Parliament hidden under the shadow of the mining tax.’

‘The truth is the proposed increase in the superannuation guarantee levy is a $20 billion unfunded promise from the Federal Government, but the bill is being sent straight to employers across the country to pay.’

Disincentive
 
‘The proposed increase in the superannuation guarantee levy is another increase in the cost of running a business and a further disincentive to employing Australians.’

Cartwright said the Henry Review specifically looked at the issue of superannuation, and found that the current 9% was adequate; there was no justification for the rise in superannuation to 12%.

‘If the Government is serious about increasing the retirement savings of low income earners, there is significant scope for reform within the existing system before slugging employers with what will be an additional $20 billion a year when the increase is in full force,’ he said.
 
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