Income test changes to create two class employee system:oppn
18 Mar 2009 1:31 PM
CANBERRA, March 18 AAP - Labor's proposed changes to income tests for federal government assistance would punish employees who individually negotiate superannuation salary sacrifice arrangements with their employers, the opposition says.
The draft law before the lower house expands the income tests used in determining eligibility for a range of government financial assistance programs, including family assistance payments and means-tested tax benefits.
The income tests would be expanded to include certain salary-sacrificed contributions to superannuation, total net investment losses and adjusted fringe benefits.
Income that is part of superannuation salary sacrifice arrangements negotiated by employees with their employers would be included in the income tests.
But, according to the opposition, income that is salary sacrificed under arrangements negotiated by third parties, such as unions, will be excluded.
Opposition superannuation spokesman Chris Pearce said the anomaly would create two classes of employees.
"The concern is that employees who choose to negotiate their own arrangements will, as a result of this bill, be treated if you like as second-class citizens," he told parliament.
"This is not an equity measure, as Australians who choose to salary sacrifice in their super because of an individual decision are going to effectively be punished.
"On the other hand, contributions made to employee super accounts because of a third party, let's say through a union representative agreement, they'll be afforded an inequitable advantage."
Opposition frontbencher Tony Smith urged the government to move an amendment to address the coalition's concerns or the opposition would move to amend the bill in the Senate.
The coalition does not oppose the two other measures contained in the bill that provide a 20 per cent reduction for small business in their Pay As You Go (PAYG) tax installments and amends various laws relating to the temporary resident unclaimed superannuation regime.
Debate on the Tax Laws Amendment (2009 Measures No. 1) continues.
