It has recently been announced that a large part of the
increased revenue expected to be obtained from the proposed Mineral
Resource Rent Tax is to be directed towards an increase in the
superannuation guarantee levy.
On 24 March 2011 the Federal Government announced that all
recommendations of the policy transition group headed by Minister
Martin Ferguson have been accepted and the Government has gained
the support of the mining industry for the proposed Mineral
Resource Rent Tax.
In the subsequent press conference and later articles the
Government stated that a large part of the revenue from this tax
will be directed towards funding the planned superannuation changes
announced in May last year; including an increase in the
superannuation guarantee levy to 12% and exempting low income
earners from contribution tax. The Association of Superannuation
Funds of Australia in conjunction with these announcements has
urged the Government to implement the planned measures promptly
The primary impact of the Government's increased revenue
will be to enable Parliament to raise the superannuation guarantee
levy rate from 9 per cent to 12 per cent. This will result in a
further $108,000 in the retirement superannuation balance of an
average waged worker currently aged 30. It will also bring
Australia in line with other Organization for Economic Co-operation
and Development (OECD) countries in terms of the replacement rates
of income in retirement, as highlighted in the recent OECD 2011
Pensions at a Glance publication.
The second major change which can now be implemented because of
increased public revenue involves the application of concession
rates to those lower income earners who have their superannuation
contributions taxed. Under the Government's proposed plan, from
1 July 2012 the Government will provide a contribution of up to
$500 for workers with incomes up to $37,000, ensuring no tax will
be paid on superannuation guarantee contributions for those with
incomes up to that level in 2012-13.
Accordingly, all employers will need to monitor these changes
closely in order to implement any required payroll system upgrades,
review existing salary sacrifice agreements and establish
recalculated cash flow projections.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The income tax treatment of any property lease incentive will vary, depending on the nature of the inducement provided.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).