IS THAT LIKELY?
Yes, politicians have been fiddling with the
compulsory super rate since Paul Keating
introduced the superannuation guarantee
at 3% in 1992, with talk it would eventually
rise to 15%.
One of the federal government’s first
decisions after winning the May election
was to undertake a detailed review of
the retirement system. Yes, another one.
WHATW IF? Annette Sampson
Y
ou’re purchasing a new car, mobile
phone or appliance and the sales
assistant offers you an extended warranty.
The idea that you’ll get extra protection
for a longer period of time sounds good
in theory, but how much should you pay
and is it worthwhile?
The Australian Competition and
Consumer Commission (ACCC) says an
extended warranty is “where you chooseto pay extra to extend a manufacturer’s
warranty for a set period of time”. It also
says a manufacturer’s warranty is a war-
ranty against defects and “explains when
you are entitled to a repair, replacement,
refund or something else”.
Retailers can sell extended warranties
that not only increase the manufactur-
er’s warranty but offer extra benefits. On
the flipside, consumers should watch forProtect your purchase
THE CHALLENGE Darren Snyder
Make sure an extended warranty is worth the cost
The Productivity Commission had
recommended the review in December
when it released a report on super efficiency
and competitiveness, claiming members
could benefit by around $3.8 billion a year
by addressing the problems of multiple
accounts and underperforming funds.
The problem is that this has also led
to calls for the promised increase in
compulsory super to be further delayeduntil after this review. Given that it is also
likely to look at contributions rates, some
fear the rise may be scrapped altogether.
If you’re thinking it is taking a long time
to get to that promised 12%, you’d be right.
The Gillard government had legislated
a phased increase to 12% by this year.
But in 2014 the Abbott government froze
contributions at the current level of 9.5%
until 2021. Under the current timetableCompulsory
super contributions
were to change
Delays in lifting
the rate from 9.5%
could lead to a
poorer retirement
for many people