General

Pay Equity

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A recommendation to the Federal Government by the Taskforce on Reducing Regulatory Burdens on Business has serious implications for the low paid.
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The taskforce has recommended that the government raise the threshold for the Superannuation Guarantee (SG) from the current $450 a month to $800 a month. If implemented this move would drastically reduce superannuation savings for part-time and casual employees. It is estimated that two-thirds of the half a million workers currently earning between $450 and $800 a month are women.

In 1992 when the SG legislation was introduced, the $450 a month threshold was established and employers did not have to make superannuation contributions for employees earning less than that amount.

The regulation taskforce has argued that by increasing this threshold to $800 per month it would represent an increase proportional to the increase in the average wage since 1992. This argument is contrary to that run by those (including the QNU) who have been lobbying for some years for the abolition of the threshold concept altogether, because it disadvantages part time and casual workers.

It is becoming increasingly common for those part-time and casual workers to hold down multiple positions with different employers, so it is possible that someone working the equivalent of a full time position with multiple employers may not qualify for employer SG contributions if they currently earn less than $450 per month with that employer.

The peak superannuation body, the Association of Superannuation Funds of Australia (ASFA), has slammed this recommendation.

ASFA chief executive officer Philippa Smith said that under the proposal women and part-time workers would suffer most.

"Basically it's a concern to a broad sweep of people on lower incomes and we already know that those people and women particularly have not saved enough for retirement."

The Taskforce provided its report to government at the end of January 2006. Its mandate was to look at strategies to reduce the regulatory burden on business. Its wide ranging report canvassed regulations impacting on business including areas such as health, aged care, occupational health and safety, private health insurance, labour market regulation, consumer related regulation, environmental and building regulation, financial and corporate regulation, taxation, superannuation and trade related regulation.

The Treasurer released the report in April 2006 along with the government's interim response addressing 86 of the 178 recommendations of the taskforce. That response did not address recommendation 5.49 relating to increasing the SG threshold (which can be found at page 126 of the report). The government intends providing a final response to the Taskforce's report by the end of July 2006.

The full report can be found at: http://www.regulationtaskforce.gov.au . The government's initial response can be accessed at: http://www.pm.gov.au/news/media_releases/media_Release1869.html .
Source: Regulation Taskforce and ASFA website and "Workers Online" article

© 2001 Community & Public Sector Union - State Public Services Federation (CPSU-SPSF) - National Office

http://www.cpsu-spsf.asn.au/latest_news/general/20060615_super.html
Last Modified: 15 Jun 2006