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Business groups up in arms over super levy rise

Friday, 25 November 2011 | By Michelle Hammond
A leading business group says it’s appalled by the Federal Government’s lack of consultation on lifting compulsory superannuation by 3% from 2013-14, claiming the increase will cost jobs.

 

The Australian Chamber of Commerce and Industry estimates the incremental rise in the super guarantee, from 9% to 12% from 2013-14, will cost business $20 billion a year.

 

Twenty-six representatives from leading employer bodies have signed a resolution of protest against the legislation, which passed the Lower House as part of Labor’s mining tax package.

 

Employer representatives expressed alarm that a majority of lower House MPs chose to impose the employer-funded super levy under the guise of debate on the mining tax.

 

They were also unimpressed at the lack of engagement with employers.

 

“In hiding this levy rise inside the mining tax bills, the government has denied employers due process,” ACCI chief executive Peter Anderson said in a statement.

 

“Employer representatives have always been up for a sensible discussion with government about how retirement incomes can be equitably funded... But this levy rise is unfair and unfunded.”

 

Anderson said “in one foul swoop”, the government and the parliament have killed off any chance of a wage-superannuation trade-off to fund the levy rise to 12%.

 

“No trade union will discount wage demands for higher super once the parliament forces the business to pay. Costs like these... [will result in] fewer jobs,” he said.

 

Anderson’s comments are backed up by Peter Strong, executive director of the Council of Small Business of Australia, who believes the small business sector will bear the brunt of the levy rise.

 

“A small business person will lose income so another person, an employee, can gain retirement funds... Big business can wear this. Small business will really pay – through the nose,” he says.

 

“We don’t have a lot of control over our prices... It’s only 3% but in today’s environment, that’s enough to push people over the wall.”

 

“[The government should] stops us collecting super in the first place and put it into the tax system. It becomes an easier process to manage once you do that.”

Meanwhile, unions have vowed they will not moderate future pay claims to help employers meet the cost of the levy rise.

 

The move comes after Assistant Treasurer Bill Shorten said employers would cover the cost by using “part of the inevitable wage increases they’d have given” over the next seven years.

 

This led to a backlash from the unions, which say they will resist employers’ attempts to pay for the levy rise using money that would otherwise fund pay rises.

 

“We will continue to bargain to get the best increase in wages that we can,” said Joe de Bruyn, national secretary of the Shop, Distributive and Allied Employees’ Association.

 

“This increase is eminently affordable. But that won’t stop employers from complaining about it.”