From the 1 July 2013 the Government will be increasing the current guaranteed superannuation from 9% to 12%. Australian workers will benefit from the scheme as a result of recommendations made in the Henry [Tax] Review which will see the guaranteed Superannuation contribution rise annually from 1 July 2013 through to 2019-2020.
In the face of an aging Australian population, the push for the increase to superannuation has been to heighten national savings in effect increasing future retirement incomes. Approximately 8.4 million employees are anticipated to benefit from the scheme after an initial cost of $2.4 billion in order to implement the scheme.
The move by the Government to amend super payments in Australia has been green lighted as an alternative reducing tax breaks as this measure will directly stimulate private savings. Approximations made by the Government see the reforms to create superannuation savings in excess of $85 billion over the next decade.
What does this mean for businesses?
Understandably this will impact employers. To limit the impact of the changes the Government has seen to stagger the rises in compulsory superannuation contributions over several years.
Treasure Wayne Swan has been quoted as saying that these changes are the largest since the introduction of compulsory superannuation in 1992. Arguably negotiations between employer and employees will be effected as a result the Government has seen to postpone the introduction of the reform for three years until 2013 in order to allow both parties time to accommodate to the projected changes. It arguably stands to see whether these changes will benefit the future of Australia and limit individuals bargaining power.
Only time will tell whether the costs associated with the amendments to the superannuation scheme will have the intended outcome for future Australians and retirees. Yet, it is arguably a preliminary solution to improve Australian savings in the future and certainly further recommendations made by the Henry Review including the removal of tax on super contributions would be further steps towards building Australian private savings.
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