While the Federal Government’s superannuation co-contribution scheme is costing it millions in expenses, Assistant Treasurer Mal Brough is adamant the policy will not be shelved.

It will cost about $270 million in 2004/05 – almost 25% more than allowed for in the Federal Budget – and has already pumped $244 million into the super accounts of workers on low and middle incomes.

It awards up to $1500 for every $1000 put away by the member earning up to $28,000, with a lesser contribution for those earning up to $58,000.

Mr Brough says the scheme was been very popular, but he has ruled out cutting back the policy to reduce its impact on the budget.

Investment and Financial Services Association CEO Richard Gilbert told Sunrise Exchange News the scheme represents short-term costs for long-term gains.

“The superannuation co-contribution scheme has been a core promise for two election campaigns,” he said. “There’s no way the Assistant Treasurer could cut something that is working so effectively.”

Mr Gilbert says it is likely to be even more successful when it is extended to middle income earners in the coming years.