Working women, rural & regional Australians hardest hit by Abbott Government plan to stop Low Income Super Contribution

Industry Super Australia Media Release 14 June 2014:

Working Mums, rural and regional Australians the hardest to be hit by Government plans to drop the Low Income Super Contribution (LISC)

Industry Super Australia (ISA) has today released a new analysis that illustrates the enormous impact of scrapping the Low Income Super Contribution (LISC) across Australia.

The LISC rebates up to $500 into the super accounts of all Australians earning less than $37,000 whose marginal rate of tax is 15% or less.

It was previously known that 3.6 million Australians stand to lose up to $500 a year from the proposed abolition – equating to one in three workers or one in every two working women.  But the new analysis, based on ABS data, highlights where the pain is felt most profoundly.  It shows:

·     24 of the 25 worst affected electorates are in regional/rural Australia.

·     In regional areas, 40 per cent of employees are affected, with over 30 per cent in metropolitan areas.

·     In the worst effected electorates, almost one in two employees are affected compared to less than one in five in the least effected metropolitan electorates.

The ISA analysis shows the damage to super balances for those on modest incomes in every electorate in every state:

	People impacted	% of total impacted	% of total women impacted	Estimated value of lost LISC p.a.
NSW	1,096,277	34.4%	43.3%	$297m
Vic	935,784	36.4%	46.1%	$249m
QLD	744,286	35.7%	46.6%	$203m
SA	291,800	38.5%	49%	$79m
WA	353,613	31.4%	44.3%	$93m
Tas	92,426	41.3%	52%	$25m
NT / ACT	79,952	24.5%	29.6%	$21m

Crucially, the new Senate will have a chance to consider this legislation after the swearing in takes place in early July.

ISA Chief Executive David Whiteley said today that it was not sustainable to have a “two-tier” system, with only middle and high income earners attracting a tax break on their super contributions.

“Retention of the LISC is necessary for the integrity of compulsory super. The reality is that until every Australian receives a tax concession on their super contributions, no other changes to the taxation of super will be accepted by the community at large.”