Mining boom to pay for super revolution
By online political correspondent Emma Rodgers
Updated 56 minutes ago/ABC News
Treasurer Wayne Swan has described the announced changes as historic.
Millions of Australians are set to reap higher retirement savings, funded by a tax on miners, as the Federal Government makes major changes to the country's superannuation system.
The Federal Government today revealed in its much-anticipated response to the Henry tax review that it will lift compulsory superannuation contributions from 9 to 12 per cent by 2020.
The Government's move to increase compulsory superannuation goes against the Henry review recommendations, which instead preferred changing the rate of tax on compulsory contributions to make the system more equitable.
Key points of today's announcement include:
* Lifting compulsory superannuation from 9 to 12 per cent by 2019-20
* More Government payments for low-income workers into their superannuation
* Compulsory super payments for those over 70 and concessions on contributions for those over 50
* A reduction in company tax from 30 to 28 per cent by 2015
* Small business to benefit from company tax cut from 2012
* Other write-off concessions for small business
* Miners to be hit with a 40 per cent tax on above normal profits
* An infrastructure fund to be paid to the states each year to start at $700 million in 2012
Unveiling the Government's response, Treasurer Wayne Swan described the announced changes as historic.
"These are very big steps in a decade-long process of reform," he said.
"We've chosen to build everyone up rather than rearrange the tax concessions."
The country's mining boom will be used to help fund the superannuation overhaul with the resources sector to be slugged with a 40 per cent tax on profits.
Mr Swan warned the Opposition that if they blocked the tax on mining profits they would be blocking the increase in compulsory superannuation.
"This is only doable if it can be funded," he said.
"There are big gains to come from these reforms we have announced today."
Prime Minister Kevin Rudd said the superannuation increase would deliver more security for people as they age.
"This plan means that working families of the future will have to worry less about their retirement," he said. ...<cont>
Coalition punishes Labor to take poll lead
By Sabra Lane, staff
ABC online
Updated 8 hours 26 minutes ago
Opposition Leader Tony Abbott's support as preferred prime minister has risen to 32 per cent, while Prime Minister Kevin Rudd's has dropped to 50 per cent. (ABC/AAP)
The Coalition is in an election-winning poll position for the first time since 2006, with the latest Newspoll showing it leading Labor by 51 to 49 per cent on a two-party-preferred basis.
The Coalition's support jumped five points while Labor's dropped five. Opposition Leader Tony Abbott's support as preferred prime minister rose three points to 32 per cent, the highest support of any Liberal leader since former prime minister John Howard.
In just a fortnight Prime Minister Kevin Rudd's satisfaction rating has slumped 11 points from 50 to 39 per cent, while his preferred prime minister ranking has also been slashed by 6 points to 50 per cent, its lowest level since he took office in 2007.[/b]
The Newspoll survey was conducted last weekend for The Australian and comes after a frenetic fortnight which saw the Government postpone its emissions trading scheme, axe its insulation program, ditch more than 200 new childcare centres, and jack up the tobacco tax.
However it was taken too early to be a reflection of the Government's response to the Henry tax review. The next Newspoll will follow the announcement of the federal budget.[/b]
Newspoll chief executive Martin O'Shannassey says he has no doubt that the Government has had a very tough fortnight.
He says the result could be a rogue poll, but he thinks voters are sending Mr Rudd a message.
"It's possible that we have a rogue poll, although, funnily enough, while there's a chance of one in 20 that we get one over a certain percentage, the chance that we get one of such magnitude declines as well.
"In October 2009, the last time we talked down climate change or confidence in the Government was fading on climate change, we saw a sharp fall in the primary vote for the Government. Here it is again.
"What you look at is the first preferences, and it is very clear that Labor has taken quite a caning and the Coalition hasn't gained everything it can from that. I think that probably is the story of this poll," he said.
Reserve Bank lifts rates
ABC news/Updated 17 minutes ago
The rise will add about $48 a month to mortgage repayments on a $300,000 loan with a 25-year term. (ABC News: Giulio Saggin, file photo)
The Reserve Bank has lifted official interest rates by 0.25 percentage points for the sixth time in eight months.
The move takes the official cash rate target to 4.5 per cent and will add about $48 a month to mortgage repayments on a $300,000 loan with a 25-year term.
The Commonwealth Bank is the first of the big banks to announce it is lifting its rates following the RBA decision. The rise takes the bank's standard variable home loan rate to 7.36 per cent.
National Australia Bank later lifted its standard variable home loan interest rate by 0.25 per cent to 7.24 per cent effective from Friday.
Westpac also lifted its standard variable rate by 0.25 per cent and will sit at 7.51 per cent from Friday.
Reserve Bank governor Glenn Stevens has repeatedly stated Australia's economic growth is returning to around average levels and interest rates also need to return to about average.
Most economists expect that average level to be around 4.5 to 5 per cent, leaving many analysts forecasting a pause in rate rises after today's move.
Financial markets were not surprised by the move, with 18 out 24 market economists surveyed by Bloomberg expecting rates to rise by 0.25 percentage points and only six expecting rates to stay on hold at 4.25 per cent.
However, futures traders were only betting on a 56 per cent chance of rates rising around 9:00am (AEST), according to data from Bloomberg.
Mr Stevens said inflation has not fallen as much as forecast and is likely to be in the upper half of the RBA's 2 to 3 per cent target band.
However, for the first time, he also says interest rates for most borrowers are now back around average levels.
"The board expects that, as a result of today's decision, rates for most borrowers will be around average levels," he noted in his statement.
"This represents a significant adjustment from the very expansionary settings reached a year ago."
However Mr Stevens warned Australia's terms of trade are rising by more than expected and this year will probably regain the peak seen in 2008.
"This will add to incomes and foster a build-up in investment in the resources sector," he said.
"Under these conditions, output growth over the year ahead is likely to exceed that seen last year, even though the effects of earlier expansionary policy measures will be diminishing."
The Reserve Bank has previously said its aim in the short-term was to get rates back to average to match Australia's current level of economic growth.
The Australian dollar fell slightly after the announcement on speculation the Reserve Bank may now pause before its next rate rise. ...<cont>
)So, as I said, I spent much of yesterday googling the news.
All in all a very depressing day. If I were a noble Roman I would probably have opened my veins, or quaffed hemlock, or gone to pet the lions at the circus. Instead of which I tackled the Aussie political situation. The lions would have been kinder.
Don't mind me, it's not really depression, just a fit of the blues, and I'll bounce back pretty quickly. Redheads do.
)
