ACCIAustralia Chamber of Commerce and Industry

Peter Anderson thank you for your time. What is your major concern about the increase in the Superannuation Levy?

 

Well the superannuation levy increase is a very large one: a 3% additional payroll tax. Basically, is going to be funded by Australia’s employers, not by the mining tax and so despite the fact that the Government is saying that we need the mining tax to lift people’s superannuation, the fine print of the legislation tells us otherwise. Hundreds of thousands of employers, most of whom are small and medium businesses will be paying a higher superannuation levy on seven occasions over the course of the next eight years.

 

There is a cut in the company tax rate of 1% to help them with that and also an instant asset right off provision for small business?

 

These nowhere near compensate for the superannuation levy rise. The company tax cut is only about 10% of the total cost of the superannuation levy. The small business asset right-off is an accelerated depreciated arrangement. It’s good policy, but it’s really a cash flow issue, it doesn’t provide a tax saving at the end of the period. There’s 200,000 small and medium employers who are not incorporated companies, who have to pay the superannuation levy anyway so they don’t get any corporate tax cut.

 

Will this lead to lower wages for employees over time?

 

Well the Government says that it hopes that this will be a wage superannuation trade off but again when you look at the reality that is a forlorn hope. As soon as the Government asks the parliament to legislate an employer obligation from 9% of payroll to 12%, no union in their right mind in Australia is going to offset their wage claims for an obligation employers already have been told by the parliament they have to carry. So the idea that this will be part of a wage trade off paid as lower wages but higher superannuation is regrettably not going to emerge. 

 

So in your view it is just simply going to be a hit to the bottom line of a lot of companies and unincorporated businesses but you accept though that we do need to increase out retirement savings? We’re all getting older, the population is aging, and we’re going to need to ease the strain on the pension from the Governments point of view.

 

Well I do, but you can’t just cost shift from the Government sector to the private sector, and you certainly can’t without a full and considered debate about how you equitably fund retirement incomes in Australia. By tagging this superannuation proposal on the coat tails on the mining tax legislation, it’s been hidden, away from sight; it hasn’t been subject to the full parliamentary debate it deserves. If any Government in Australia was going to say that they would lift payroll tax by 3% there would be a big public debate. That’s essentially what’s happening here by stealth. 

 

You were saying split the Bills, does that mean that on the actual mining tax, you’re supportive or happy to see that go through?

 

We think that the tax arrangements for the mining industry have to be debated and resolved within the mining and resource industries and are differences of opinion between larger miners and smaller miners on that.

 

You’re not actively up there opposing it?

 

We haven’t actively campaigned against the passage of the legislation because you really need to allow those taxation arrangements to be resolved by the industry that is particularly affected. But when it comes to the fact that the mining tax is said to fund higher superannuation but in truth is not going to fund higher superannuation but rather hundreds of thousands of employers small and medium businesses in the suburbs and in the country towns are going to do so, then it’s an issue for which we have to stand up. The Government should allow a full and independent parliamentary debate on that issue not just tag it along with the mining tax. 

 

Tony Abbott is voting against this but he’s made clear that if he wins the election and forms Government he’ll keep that superannuation levy increase. Are you disappointed with that?

 

I am, it’s a mistake, because there’s no funding basis that either the Opposition or the Government have put forward to how this will ultimately be funded. Six of the seven increases that the Government wants the parliament to legislate are scheduled to occur after the date of the next federal election, if this parliament runs its full term. So there’s very good reason why the Opposition could quite respectably have said we will keep in place those increases that have come into effect if we do get into Government, but we’ll have a fresh look at how to find a funding basis if we need to introduce those further increases.

 

Finally can I ask you on industrial relations, the Qantas dispute, now headed for arbitration by Fair Work Australia the independent empire, are you comfortable with that outcome?

 

I just think we have to let that process happen. What I’m not comfortable with, is unions trying to make claims either in a bargaining process or in an arbitral process which go to issues of management responsibilities and corporate structures. Companies do need, the scope to exercise the responsibility to ensure that they are able to meet the competitive pressures of the modern global economy, Qantas and any other company in a global supply chain needs to be given that space. Whether it’s arbitration or whether its bargaining, that needs to be the underlying principle.