The federal government's proposed increase in the superannuation guarantee will be paid out of wages, rather than company profits, Treasury secretary Ken Henry says.
As part of its response to the Henry tax review, the government proposes that the super guarantee will rise to 12 per cent from nine per cent in incremental stages.
Business lobby groups have argued that this increase will cost business more than $20 billion a year when fully implemented.
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But Dr Henry said analysis by Treasury and the tax panel show that previous increases to the super guarantee have come out of wages rather than company profits.
"Not that wages have fallen, obviously, because wages don't tend to fall," he told a Senate estimates hearing on Thursday.
"The analysis we have seen is pretty consistent on this point that the superannuation guarantee is regarded by employers and employees as a different way of receiving an increase in wages."
An increase in the super guarantee is linked to the implementation of the 40 per cent resource super profits tax.
Dr Henry said the tax panel, which he headed, recognised that increasing superannuation balances was one sensible way of recycling revenue from resources taxation.
The corporate tax will also be cut under the tax package to 28 per cent from 30 per cent.
"A cut in the company tax rate is one way, a sensible way of both supporting growth, supporting investment, but also importantly supporting ... higher productivity and higher real wages," Dr Henry said.
