Raising the superannuation guarantee (SG) from 9 to 12 per cent is a 'vitally important plank' to Australia's plan to confront an economy and country in transition, Minister for financial services and superannuation Bill Shorten said yesterday.
"More personal retirement savings is a very big part of the answer of how to deliver an adequate and comfortable retirement but not break the bank in doing so," he said in a speech at the Centre for Investor Education Conference in Melbourne yesterday.
"Pure fiscal math dictates that the old age pension, indexed or not, simply cannot be the reasonable route to make up the personal retirement income adequacy shortfall," he said.
The endorsement of the SG increase comes after a number of industry associations called for legislation of the SG increase to 12 per cent in their submission to the Budget 2011/12.
They have been increasingly uncomfortable with the link between the super reforms and the implementation of the Minerals Rent Resource Tax (MRRT).
Last week, the Association of Superannuation Funds of Australia (ASFA) said the increase should not be linked to the MRRT, because the cost to tax revenue from increasing the rate of the SG was relatively small in terms of the overall Commonwealth budget.
But Shorten continued yesterday to link the SG increase to the MRRT.
"This is why the MRRT is so important to our nation's future: it pays for the cost of increased superannuation's concessional tax treatment," he said.
"Around a third of the proceeds of the MRRT will be used to increase incentives to save for retirement, including increasing the SG from 9 to 12 per cent," he said yesterday.
