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CEO’s REPORT
and unsettling recommendation that the SG remain at
its current level of 9 per cent.
Fortunately, the industry didn’t have to wait long for the
Government to reject the argument. On May 2nd - the
same day that the final Henry recommendations were
aired - the Government unveiled its landmark super reform
package, the central plank of which was a seven-year
timetable to lift the SG to 12 per cent by 2019, along
with a rebate for low income earners.
AIST, along with just about everybody else in the super
industry, was elated. But we also knew that with a looming
Federal Election, 12 per cent was far from guaranteed.
Indeed, with the cashed-up mining industry fiercely
opposed to the Government’s proposed Resource Super
Profits Tax, the super industry had a mighty challenge on
its hands.
Fiona Reynolds, CEO (FAIST)
The past year has seen AIST intensely involved in
helping shape the Government’s reform agenda.
Not since the introduction of compulsory super
have those working in superannuation had to
contemplate so many potential changes to the
super landscape.
TOWARDS 12 PER CENT
Of course the biggest change of all – and one that was
most welcome – concerned the Government’s proposal
to lift the Superannuation Guarantee to 12 per cent. While
this announcement in May came as a surprise to many,
AIST had already begun the year with a strident call for
12 per cent following the release of the Intergenerational
Report. This report highlighted the escalating costs of
Australia’s ageing population and contained the worrying
forecast that, even by 2050, most retirees would still be
heavily reliant on the age pension.
Not surprisingly, few Australian workers were happy with
this prospect. Public opinion polls conducted by AIST
suggested that not only were an overwhelming majority
of Australians in favour of lifting the SG to 12 per cent but
most were prepared to pay for this rise out of their wages.
But not everyone was convinced that 12 was a good
number. When the Henry Tax Review’s long-awaited
report was finally released, it included the controversial
AIST immediately sprang into action with a public
campaign. We called for bipartisan political support for
12 per cent, and we requested that the Coalition release
its super policy. We called on Tony Abbott to explain
how his party planned to tackle the nation’s retirement
funding challenge.
AIST was equally vocal in explaining to employer groups,
who claimed that 12 per cent would damage business
and cause an economic downturn, that they had nothing
to fear. We cited data that showed wages and profits
had actually flourished during previous years of rising
compulsory super contributions. The sky hadn’t fallen in.
Similarly, when the Minerals Council of Australia released a
spate of advertisements claiming that worker’s super was
at risk, AIST pulled no punches. We accused the miners
of misleading consumers and called on the Australian
Securities and Investments Commission to investigate.
One week later, during her maiden speech as the new
leader of the Labor Party, Julia Gillard called on the miners
to drop the offending advertisements.
Another win for AIST during the year was our success
in persuading the Government to re-think its proposed
reduction of the concessional caps for older workers.
As one of several measures to improve the equity and
fairness of our super system, the Government adopted
AIST’s recommendation to the Henry Review to retain
the concessional cap limit of $50,000 for older workers
with retirement balances of less than $500,000. AIST
has long-argued that older workers who missed out on a
working lifetime of compulsory super and whose balances
remained low should be encouraged to top up their super.
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