AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY 2007 ANNUAL REPORT & BUSINESS REVIEW
ECONOMICS & TAXATION REPORT moving the fund towards being an instrument for governments to “pick winners”, which has mostly failed in the past. Any government funding of broadband should occur through normal budgetary processes. ALP Spending Cuts On 2 March, the ALP indicated that it would make over $3bn in spending cuts in Government through the following changes: q saving $394m by “scrapping” WorkChoices; q cutting $350m from advertising;
consolidation plan should be given more time to operate before examining the option of automatic consolidation. In adopting these motions, Council considered that: q increases in the employer superannuation contribution would cause a large increase in employer costs and cut jobs. There is substantial evidence to suggest that an increase in compulsory employer contributions will not be offset by wage moderation; q there should not be a particular retirement goal, as individuals should be encouraged to determine their own retirement goal;
q saving $395m on the use of consultants;
q a universal retirement income forecast will be expensive, controversial and hard to implement; and
q folding Invest Australia functions into Austrade to save $70.5m;
q ACCI opposed the right to request salary sacrifice as this should be negotiated at the workplace level.
q abolishing the Prime Minister’s Community Business Partnerships to save $6.3m;
Better Superannuation Reforms
q deferring the Access Card to save $302m; q abolishing the WorkChoices Employer Adviser Program to save $12.5m; q abolishing the Inspector-General of Taxation to save $6.6m; q limiting Family Tax Benefit Part B to those earning below $250,000 to save $22.5m;
The Government implemented significant reforms to superannuation, called Better Superannuation, from 1 July 2007. There were a number of key issues in relation to these changes that were relevant to employers, including: q how the caps on contributions would be implemented; q deductibility for employers for contributions; q quotation of Tax File Numbers on contributions; and
q redirecting ATO funding to compliance activities to “produce larger compliance dividend” to raise $480m;
q the treatment of Eligible Termination Payments.
q reducing ASIC funding by $129.8m; and q cancelling the sale of Medibank Private, saving $12m.
ACCI provided comments on the legislation and supported the release of the final legislation. ACCI was involved in consultations on this legislation.
Later during the year, ACCI was able to establish that the ALP was committed to keeping the functions of the InspectorGeneral, but would absorb these functions into an existing body such as the Tax Ombudsman.
ACCI had several meetings with the Office of the Assistant Treasurer, the Tax Office, the Association of Superannuation Funds of Australia and ACCI members to discuss the reforms and how they affect employers.
Council:
ACCI participated in meetings with the ATO to discuss communications relating to Better Super, particularly focusing on communications with employers. Issues discussed included the draft booklet being sent to employers, use of employer associations to communicate with business, and concerns over requirements for employers to pass on tax file numbers to the ATO.
q strongly opposes any increase in the compulsory 9 per cent employer superannuation contribution;
ACCI provided comments on the ATO’s communications documents for business.
q welcomes the ALP’s policy on the Government’s superannuation reforms;
Regulation of the Superannuation Industry
SUPERANNUATION ACCI Council Resolution on Superannuation In November 2006, ACCI’s General Council passed the following motion:
q does not adopt a position on whether there should be a retirement income goal; q opposes proposals for there to be a universal retirement income forecast. Forecasts should be allowed but not mandated; q opposes proposals that employers should be required to implement salary sacrifice into superannuation if requested to by employees; and
ACCI made a submission to an Inquiry into the regulation of the super industry by the Parliamentary Joint Committee on Corporations and Financial Services in September 2006. The submission argued that: q the current regulation of trustees should continue. Uniform capital requirements should not apply to trustees, as the super funds themselves are already subject to adequate regulation. Trustees should not be required to
q argues that the Government’s superannuation (CONTINUED ON PAGE 14)
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