Superannuation Guarantee increase
The ACTU welcomed the announcement by government that it intends to increase the SG rate from 9 per cent to 12 per cent.
This is the first increase in the SG rate for nearly twenty years and will make a significant contribution to helping millions of working Australians secure a more adequate retirement income. For example, it is estimated that when the proposals are enacted the increase will deliver an extra $108,000 in retirement for a 30 year old worker earning average full-time wages.
Unions and many in the super industry have been campaigning long and hard for a higher rate. Given that Secretary to the Treasury, Dr Ken Henry, stated last year that he regarded 9 per cent as sufficient, unions should take some pride in having played a key role in convincing the government that an increase was essential.
The ACTU and our affiliates will continue to campaign and bargain for higher super contributions
In its response to the Henry Tax Review the government also announced that those workers earning $37,000 or less will automatically receive a new government contribution of up to $500 per year. This will effectively serve to return the tax payable on SG contributions may by low-income earners. While this is a welcome development it remains the case that many on high incomes will continue to receive very generous tax concessions.
The ACTU hopes to see more action to reduce the inequities in tax concessions in the near future.
Financial advice reforms
It is estimated that there are around 4 million Australians currently paying for financial advice they do not receive.
The ACTU therefore welcomed the government’s announcement that it intends to ban commissions, introduce a requirement that financial planners act in the best interests of their clients, and require that consumers must actively ‘opt in’ to financial planning services on an annual basis.
Consumers will be able to have confidence that the advice they receive is from professionals who are focused on serving their particular interests, rather than a sales force acting in the interests of big financial institutions.