THE union movement has warned it will not enter upcoming bargaining rounds prepared to discount wage increases by rises in employers' superannuation contributions, contrary to what the federal government has said should happen.

Incoming ACTU secretary Dave Oliver threw down the gauntlet on April 12 on the ABC's Lateline program in relation to the newly-legislated increases in employer super contributions. Oliver promised that unions would approach bargaining with an expectation of achieving the same wage outcomes as they would otherwise, despite the extra super imposts on employers.

Under changes that became law in late March, employers' compulsory super contributions will rise from the current 9% to:

• 9.25% on 1 July 2013;
• 9.5% on 1 July 2014;
• 10%on 1 July 2015;
• 10.5% on 1 July 2016;
• 11% on 1 July 2017;
• 11.5% on 1 July 2018; and
• 12% on 1 July 2019.

Workplace Relations Minister Bill Shorten's position is that workers should defer wage rises in order to cover the cost of their increased super contributions.

Oliver said while he expects employers to want to factor in super increases when negotiating wage rises, unions were not going to concede a discount up-front.

This was a 'clear point of difference between us and the minister', Oliver said.

In light of the ACTU's comments, employers need to consider their approach to future employment arrangements, as most already do as part of the 'total employment' concept, but this will be made more difficult against a union backdrop of resistance to such an approach.

Minerals Resource Rent Tax won't foot the bill

The ACTU's statements follow a federal government misinformation campaign that has sought to imply the Minerals Resource Rent Tax (MRRT) that takes effect on 1 July this year will fund the increased super contributions. This is simply not the case.

While the MRRT legislation was tabled in a suite of bills that included the super legislation, at best it will pay for the tax concessional treatment of the extra 3% in super contributions on employees' behalf. Employers will still foot the bill for the increased contributions.

Employers and unions unite on concessional caps

AMMA and the Maritime Union of Australia have both recently highlighted to the government the unfairness of current and proposed concessional contribution caps on employees' superannuation savings.

Under changes proposed to take effect on 1 July 2012, the tax concessional treatment of super contributions will change for some Australian workers, acting as a disincentive for employees to contribute to their own retirement savings. The proposed changes have the potential to impact on some parts of AMMA's membership, particularly in the maritime industry.

At present, workers aged 50 years or over can contribute $50,000 a year to their super funds and receive tax concessional treatment of those amounts. Those amounts are comprised of employer contributions made on the employee's behalf and employees' own salary sacrifice contributions.

Employees aged under 50 under the current rules can contribute $25,000 each year to superannuation, including employer and salary sacrifice contributions, and receive favourable tax treatment on that amount.

The changes proposed to take effect from 1 July this year will see the level of concessional contributions change for those workers aged 50 or older who have more than $500,000 in retirement savings. For those workers, the concessional contribution cap will be halved to $25,000 a year.

For workers aged under 50 on 1 July 2012, nothing will change and their concessional contribution caps will remain at $25,000 a year regardless of how much they have in their super funds.

Up until the end of the 2008-09 year, workers aged 50 or older were able to contribute $100,000 a year in super, while those aged under 50 were able to contribute $50,000 on a tax concessional basis.

AMMA has written to Bill Shorten calling for the concessional caps to be raised to $50,000 a year for all workers aged under 50, and $100,000 a year for workers aged 50 or over as long as they have less than $1 million in superannuation savings.

For further updates, contact AMMA senior workplace policy adviser Lisa Matthews on (02) 9211 3566 or at [email protected].