An increase in compulsory superannuation contributions is a step closer after legislation passed Parliament’s lower house in the early hours of 23 November 2011. The Superannuation Guarantee (Administration) Amendment Bill 2011 increases the superannuation guarantee (SG) rate from nine per cent to 12 per cent. A related piece of legislation, the Minerals Resource Rent Tax (MRRT) 2011 also passed by a narrow margin.  Revenue raised from the MRRT will cover the shortfall in Government revenue arising from the higher SG.

The Senate will now debate the SG Bill.  Minister for Financial Services and Superannuation, Bill Shorten, is confident the SG legislation will pass the Senate.  The Bill abolishes the age limit for people contributing to superannuation; and it abolishes contributions tax for anyone earning less than $37,000 a year.  The increase in the SG will be phased in over seven steps, starting in the 2013-14 financial year. It will not reach 12 per cent until 2019-20.