First and foremost, Labor has announced that it will not overhaul a “tsunami” of changes to superannuation. This is good news as change only undermines confidence in the existing system.
Labor is the author of our current superannuation system though significant changes to it have also been made by different Liberal governments. It was the Gillard government that decided to increase the superannuation guarantee rate to 12% but this process was stalled because of the Global Financial Crisis.
Labor is committed to the current program to increase the rate of Super Guarantee up to 12% by 2025 but has stated that it intends to establish a pathway to increase that rate up to 15%.
Labor has stated that it wants to reform the super guarantee so that it applies to low-income contractors.
The Superannuation Guarantee already applies to many contractors. Any change to therefore increase the rate of payment to a contractor by 10.5% may be met with a corresponding reduction to their payments of 10.5% by their employers, as contractors do not have the protection of a minimum wage like other workers. This policy will likely require some consideration and detailed drafting to ensure that it is not abused.
In the 2019 election, one of the policies committed to by Labour was paying super on paid parental leave. This policy has since been effectively dropped. The party does still have the aim of reducing the gender gap currently existing in the superannuation system. At this point, it is unknown what the plan is to address this gender gap until the minister instructs Treasury to come up with a plan. It has also been announced that this may not be something that can be achieved in their first term.
Both Liberal & Labor had also announced that the age would be lowered for making downsizer contributions from the current age of 60 to be 55. This is seen as a measure to increase the supply of inner-city housing by encouraging the downsizing of retirees’ homes.
If you have any questions about how your superannuation could be impacted in the post-election policy-making process, you can speak with a licensed professional for further information.