Mining Your Retirement

With today’s repeal of the Mining Tax by the federal government comes bad news about your superannuation. How does that work? Well when Labor introduced the Mining Tax they attached a bunch of things to it to spend that tax revenue on, and one of those was attached to super increases.

Currently if you are an employee your boss has to whack 9.5% of what you earn into super on your behalf. That was to increase to 12% by 2019, or at least that was the plan before the 2013 election. Originally, Tony Abbott said there would be a two year delay before the next small increase in super (of just 0.25%). But today it has been announced that the delay in the increase will be pushed out until 2021. As I feared, the Abbott government would not stick to their two year delay and I still suspect that the eventual planned increase will not be honoured by them.

What this means for you is that there is a really strong chance that you will have to give more thought to putting more of your money into super. You’re better off doing that sooner rather than later and not relying on an increase that may never come. If you don’t whack more of your money into super, due to today’s repeal you will be worse off in retirement.

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