Opposition treasury spokesman Joe Hockey’s comments on the coalition’s plan to scrap Labor’s increase in the superannuation guarantee sparked a war of words during the last sittings of federal parliament before the winter break.
In June, Investor Weekly revealed the coalition’s plan to throw cold water on the Gillard government’s promise to increase the superannuation guarantee from 9 per cent to 12 per cent should it win power at the next election.
In an exclusive interview with Investor Weekly, Hockey said: “The coalition has concern that this will be an impost on small business. The increase from 9 to 12 per cent will either have to be borne by small business or by employees.”
Despite Labor’s plan garnering support from the super industry, Hockey argued Labor’s promise could backfire, affecting the ability of small business to offer adequate wages and maintain jobs.
“At a time when cost-of-living pressures are paramount for Australian families, the coalition believes this will simply reduce take-home pay and eat into already small profits of Australian small business,” he said.
This drew a swift response from Assistant Treasurer Bill Shorten, who made a ministerial statement in parliament claiming coalition members were divided on the issue of increasing the super guarantee.
Shorten went on to claim Labor was making sure ordinary Australian voters received the same good deal on super that many elected politicians received.
“We want to make sure that superannuation goes up from 9 to 12 per cent, because we think it is important that when people retire after working for 40 years they have enough money to retire on,” he said.
“Let me also tell you why I think we are consistent and those opposite are not. Any member of parliament elected before 2004 gets what they call a defined benefit scheme. I wasn’t elected then, but very nice for those who have got it . if you were elected after 2004 you get 15 per cent super, which is a very generous deal. What I do not like is that those opposite would vote for Australians at large to get only 9 per cent.
“My view is that if it is good enough for us, it is good enough for the people. If it is good enough for members of parliament, we need to lift super.”
While there are many who would agree with the Assistant Treasurer’s measure of fairness, Hockey and opposition financial services and superannuation spokesman Mathias Cormann responded with a quick-fire joint media release highlighting the best way any government can help people save for their future is to ensure they have adequate take-home pay.
“Minister Shorten once again refused to explain why a 3 per cent cut in take-home pay for Australian families is a good thing at a time of increasing cost-of-living pressures,” Cormann said.
“Labor’s own Henry tax review specifically recommended against increasing compulsory super beyond the current 9 per cent limit. The Henry tax review stressed that the burden of any further increase beyond the current 9 per cent limit would impact most heavily on low and middle-income earners.”
Though the election date is technically two years away, campaigning will start in a little over 12 months.
With 1.2 million small business operators in Australia, many in the outlying suburban marginal seats, Labor will have to make a strong pitch to income earners on increasing the super guarantee to counter any small business backlash.
Brad Emery was press secretary to assistant treasurer Peter Dutton under the Howard government.
