House of Representatives

Superannuation (Surcharge Rate Reduction) Amendment Bill 2003

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Peter Costello, MP)

General outline and financial impact

Superannuation surcharge

This measure will reduce the superannuation surcharge rates by 1/10th of their current levels each year over a 3 year period.

Date of effect: This measure will take effect from 1 July 2002.

Proposal announced: This measure was foreshadowed in the Government's election policy statement A Better Superannuation System released on 5 November 2001. In line with this statement, the implementation of this measure was announced in the 2002-2003 Federal Budget.

Financial impact: This measure is expected to result in a revenue cost of $65 million in 2003-2004, $170 million in 2004-2005 and $290 million in 2005-2006.

Compliance cost impact: Some public sector superannuation schemes may have additional reporting obligations as a result of the surcharge rate reduction.

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