Tuesday, June 09, 2009

Australia's new Superannuation Minister had a vision

To impoverish some of us by locking away 15 per cent of each salary in super

Then he took it "off the agenda"

For now

Australia's newest Cabinet Minister has taken an increase in compulsory superannuation contributions "off the agenda" just a day after appearing to put it on.>

Former Assistant Treasurer Chris Bowen who will today join Cabinet as the Minister for Superannuation, Financial Services and Human Services was quoted yesterday as saying that "in an ideal world" the compulsory super levy would climb from 9 per cent to 15 per cent as had been proposed by the former Prime Minister and Treasurer Paul Keating.

But he later told The Age that such an increase was "not on the agenda".

"I am not persuing it, it is not on the agenda at this stage," he said.

"In an ideal world John Howard would have kept the increases going to 15 per cent of salary...

...but we are in a far from ideal world now."

"Australia's has many challenges to get through including the global financial crisis, and trying to find an extra 6 per cent for super is not the right thing at this time."

The previous Superannuation Minister, Nick Sherry was agnostic on the question of whether or not the levy should increase.

The retirement incomes report of the Henry Review, released with the Budget in May found that the present rate of 9 per cent would in time be enough to give most Australians "a substantial replacement of their income, well above that provided by the age pension".

It said that while lower-income earners would still have to rely on the pension, any increase in the 9 per cent compulsory contribution rate would run the risk of damaging their working incomes.

"That's obviously something I would need to take into account," said Mr Bowen. "But I am not pursuing it. I've got enough on my agenda without it."

"Nick Sherry has set up a very good agenda for reforms which should cut the cost of superannuation and save money - that's the agenda I am looking forward to progressing."

The new Cabinet minister is keen to use the end of the global crisis to develop Australia as an Asian financial services hub. "We have good regulation and a stable political system," he said. "I don't want to pick winners, but I do want to get impediments out of the way."

One impediment is any remaining laws that discriminate against so-called Islamic banking, the provision of financial services without charging interest.

"Great Britain has the eighth-larges Islamic finance market in the world, and it is not an Islamic nation."

"The majority of Muslims in the world live in Asia; Singapore and Malaysia are trying to target this market. I don't pretend that we will be the world leader in this, of course we won't, but if we want to be seriously regarded as a financial services hub, that's the sort of thing we want to be certain our regulations can provide."