Small businesses will end up paying for a federal government proposal to increase the compulsory superannuation guarantee, a business group says.
The Australian Chamber of Commerce and Industry (ACCI) told a Senate committee inquiring into Labor's Minerals Resource Rent Tax (MRRT) employers would bear completely the cost of the super change due to come into effect next year.
'It's carried by the employing business, 100 per cent of it,' ACCI chief executive Peter Anderson to a hearing in Canberra on Wednesday.
The government wants to lift the superannuation guarantee incrementally from nine per cent to 12 per cent, between July 1, 2013 and 2019-20, as part of the MRRT package.
The 30 per cent MRRT on the coal and iron ore profits of big miners has already been passed by the House of Representatives and is awaiting the approval of the Senate.
It's expected to raise $11.1 billion in revenue in its first three years, and some of the proceeds are to be used to support corporate tax cuts and the super guarantee increase.
Under the government's plan, some revenue from the mining tax will be used to boost the super accounts of low-paid workers.
Mr Anderson said the super changes would cost employers and small businesses $20 billion a year by 2020, and the cut in the company tax rate to 29 per cent, from 30 per cent, would not be enough to cover it.
As well, around 250,000 unincorporated companies and sole traders would not benefit from the tax cut.
ACTU assistant secretary Tim Lyons said unions had been calling for an increase in the super guarantee for 20 years and it would secure a decent retirement income for workers.
'It should have been done around 15 years ago,' he told the committee.
In terms of the cost to business, he said the timetable for lifting the rate to 12 per cent was extremely slow, with annual changes of a quarter of a per cent to half a per cent.
He also said an increase of 0.25 percentage points in wages 'is not the sort of number which caused difficulty in workplace wage negotiations'.
However, the ACCI's Mr Anderson called on MPs to defer passing the superannuation bill component of the MRRT legislation until a panel reviewing the Fair Work Act reports to the government later this year, arguing any increase should be linked to wage decisions.
He proposed amendments be made to the Fair Work Act that 'would provide a mechanism for some form of wage/superannuation trade-off through the wage arbitration system'.
The Australian Council of Social Service (ACOSS) also wants the Senate to defer the super bill.
ACOSS chief executive Cassandra Goldie said tax concessions in the superannuation system benefited higher-income earners.
'We would prefer to see a delay in the move from the nine to 12 per cent until we fix the tax concessions,' Dr Goldie told the Senate hearing on Wednesday.
Dr Goldie said ACOSS wanted to move the tax concessions towards lower- and middle-income earners.
