The House of Representatives yesterday passed the minerals resource rent tax (MRRT) package, which includes a measure to boost the superannuation guarantee (SG) to 12 per cent.
The passage of the bill to the upper house brings the increase of the SG from 9 per cent to 12 per cent a step closer, but the Senate has referred the package to the Senate Economics Legislation Committee, which is due to report back before 14 March 2012, making it highly unlikely the bill will become law this year.
The Australian Institute of Superannuation Trustees (AIST) welcomed the development.
"We are now an important step closer to directly addressing the retirement savings gap and reducing the tax burden on future generations of working Australians who will face the challenge of having to support our rapidly ageing population," AIST chief executive Fiona Reynolds said.
The bill's passage to the Senate came as a relief as the fierce debate around the final form of the MRRT had detracted from the importance of implementing the SG increase, the Association of Superannuation Funds of Australia (ASFA) said.
"It is imperative the Senate now follows the lead of the House of Representatives and passes this legislation," ASFA chief executive Pauline Vamos said.
The linkage of the SG increase to the mining tax has caused concern because of increasing criticism from the opposition and mining companies about the viability of the measures.
Fortescue Metals has been among the most outspoken opponents of the mining tax, questioning the estimated revenue the tax will generate.
In an interview with Investor Weekly, Fortescue chief financial officer Stephen Pearce said the revenue generated by the tax would be far less than the $11 billion predicted by the government.
The government, Pearce said, made the wrong assumptions because it underestimated the value of the mining rights, leading to lower government estimates of the deductions large miners could claim.
In addition, the period over which these deductions can be claimed is shorter than assumed, due to a number of issues including inaccurate figures on the lifespan of mines, leading to even larger deductions.
"These two factors combined will obliterate the MRRT payable by the majors over that period," Pearce said.
But he could not say how much the MRRT was likely to generate.
"It is difficult to estimate what the revenue will be because the government hasn't released any details about their modelling," he said.
Earlier this week, ASFA vented its frustration about the direction the debate was taking and called on politicians to support the SG increase, regardless of the mining tax legislation.
"The [SG] policy stands alone; it is the government's decision to link it to the mining tax," Vamos said.
"In our view, the long-term economic viability is there both from the revenue-saving governance point of view and from its role in driving economic growth," she said.
"We are concerned that all our representatives in Canberra are not thinking about good long-term policy."
Financial Services and Superannuation Minister Bill Shorten said in an address to the House of Representatives on Tuesday that the government remained committed to the increase.
"We are the party who want to increase compulsory savings. We have done it before and we will do it again," Shorten said.
