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House of Assembly - Fifty-Second Parliament, Second Session (52-2)
2013-11-26 Daily Xml
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SUPERANNUATION BENEFITS

The Hon. J.D. HILL (Kaurna) (14:56): My question is to the Minister for Finance. What effect will the Abbott government's plan to scrap the low income superannuation contribution have on low paid workers in South Australia?

The Hon. M.F. O'BRIEN (Napier—Minister for Finance, Minister for Police, Minister for Correctional Services, Minister for Emergency Services, Minister for Road Safety) (14:56): Thank you, member for Kaurna. As members may be aware, the commonwealth government has announced its intention not to continue with the low income superannuation contribution. This government has gone to considerable effort in the past two years to establish a public sector scheme by which low paid public sector workers can benefit from the commonwealth's low income superannuation contribution scheme.

In January this year, Super SA Select was established in line with the principles of the federal government's Cooper review into superannuation which sets out the future direction of superannuation schemes in Australia. Public sector employees who earn less than $37,000 a year could join Super SA Select and receive up to $500 per annum in superannuation payments without impacting on their living wage.

I issued a media release on Thursday 10 January this year encouraging low paid public sector employees to join this new fund. The difference from the fund that we have and all other public sector employees have in that it is a constitutionally non-protected scheme, so that on the payment of pensions the pensions are taxed, unlike our scheme.

This was a first for government. This government brought in Super SA Select because we recognised that an estimated 28,000 Super SA members would have missed out on this commonwealth payment, including many young workers and those working on a casual or part-time basis, because the commonwealth payment only applies to members of taxed superannuation schemes.

These 28,000 low paid public sector workers are only a fraction of the total number of people who have been affected in South Australia by this cut. Supermarket cashiers, labourers and tradespeople working on our state's many construction projects, and cleaners in our schools and hospitals, will now be denied this superannuation benefit.

Interestingly, concurrent with this announcement, the federal government also announced that it was going to ditch the tax that was going to be paid on superannuation pensions in excess of $100,000 per annum, so low paid workers were being penalised while high income pensioners being paid a pension in excess of $100,000 a year were actually being returned to non-tax status.

So, on the one hand low income workers are being hit and on the other hand high income individuals are receiving a particular benefit. Now, this begs the question: where does the state opposition stand on this matter, because it does impact on a state government superannuation scheme, and what are they going to do about low paid workers in South Australia?

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