10 Dec The Mining Tax repeal and its effect on Super
The announcement of the mining tax being repealed after the government passed a deal with millionaire miner Clive Palmer’s Palmer United Party (PUP), will have a significant impact on the future of super contributions. As a result of this legislation, plans of a steady superannuation guarantee increase to 12% have been halted at 9.5% up to 2021. At that point it will increase 0.5% every year until 2025.Experts suggest this new ruling will have a profound effect on retirement savings, especially for people between 25 and 40. Industry Super Australia estimates it will cost these individuals over $100,000 over the course of their life. Also, small businesses in Australia will be severely impacted by the mining tax repeal. 2 million small businesses will see certain measures abolished immediately. These include the ceasing of loss-carry back provisions, reducing the instant asset write-off threshold and axing the accelerated vehicle depreciation. To receive the support required of the PUP, the government has chosen to maintain 3 out of the 8 spending measures which are directly attached to the mining tax. This includes the school kid’s bonus, the income support bonus and the low-income super contribution. To further secure support, PUP set up to committees which will explore the possibility of establishing ways to better fund natural disasters and boost national trade and investment.