Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

In terms of the new Labor government’s approach to budget, we are going to take a fiscally conservative and responsible approach. We intend to increase the surplus for the next financial year from one per cent of gross domestic product to 1.5 per cent. We intend to be fiscally rigorous and conservative—that is an election commitment that we gave, and we intend to take that approach.

In terms of superannuation issues, superannuation is an important add-on to the age pension; it is part of the second most important component of retirement incomes in this country. There is a three-tiered approach to retirement incomes. Australia is recognised by the World Bank as being a leading-edge country when it comes to its approach to retirement incomes. The first tier is the age pension, which I note the Labor government indexed to MTAWE—male total average weekly earnings. The second tier is compulsory superannuation—the nine per cent superannuation guarantee—which covers employees in this country and which the current Liberal opposition opposed vehemently when they were in opposition 20 years ago. The Liberal Party opposed the compulsory contribution—the nine per cent superannuation guarantee—which is an essential fairness measure to add to the retirement incomes of Australians. So it is a bit rich for Senator Coonan to come in here lecturing us about her hypothetical and imaginative changes that may be in the budget. It is a bit rich for her to give us a lecture when all those years ago her party opposed the most fundamental reform to the expansion of superannuation—the nine per cent superannuation guarantee.

Then we have what is known as the third tier to retirement savings in this country, which is additional voluntary contributions over and above the compulsory nine per cent minimum, which applies to employees. The third tier—the voluntary contributions—come about as a range of incentives that are included in our system. One of those incentives is salary sacrifice: the ability for those employees who are able to do so through their employer to divert some of their income into the form of higher contributions to superannuation. Then there is the co-contribution. The co-contribution currently provides up to $1.50 for one dollar of contribution. It is voluntary. It starts to reduce at an income of approximately $29,000 and phases out by an income of approximately $59,000.