Two weeks ago, the mining tax was scrapped after the federal government made a deal with Senate crossbenchers. The deal involved the mining tax being scrapped in exchange for delays to increasing mandatory super contributions.
This means that the increase to mandatory super contributions from 9.5 to 12 percent will be delayed until 2021. The original plan, which was introduced through legislation passed by the Labor government, was to have mandatory super contributions gradually increase to 12 percent by 2019. With this deal, super contributions will not reach 12 percent until 2025.
For employers, these delays provide the opportunity to offer their employees’ higher wages if they wish to do so, as the money that would be going into the increased mandatory super contributions, now remains with their businesses.
Another part of the deal involves keeping the low-income superannuation contribution, which was expected to be axed, in place until the end of the 2016/17 financial year.