Over $1.6 billion raised from superannuation in the 2018 Budget goes to the bottom line instead of being used to fix issues like unpaid super and the super gender gap.
Industry Super Australia said the Government had missed an opportunity to tackle these issues by failing to re-invest the “windfall” $1.615 billion raised by 2018 Budget superannuation changes.
This “surprising” amount is raised by three superannuation changes – opt-in insurance for young people and low balance accounts, transferring inactive accounts to the ATO and a crackdown on tax deductions for personal super contributions.
“The Government is right to prioritise the erosion of small super balances – particularly for younger workers. A number of industry superfunds have already taken steps to change insurance coverage for younger members,” said Matthew Linden, Industry Super Australia’s Director of Public Affairs.
“However, it is disappointing the surprisingly large budget savings from the measures are not being used to fix unpaid superannuation or close the gender super gap.”
“Rather than pocket the $1.6bn in savings it should have been be used to abolish the $450 super threshold, pay super on parental leave, and align the payment of super and wages.”
“These simple policy steps alone would ensure millions of Australians who are missing out on super entitlements receive them – particularly women.”
Mr Linden warned that the opt-in insurance changes created a “material possibility” of higher insurance premiums for other members. He also warned care was needed so that transferring more inactive super to the ATO wouldn’t adversely affect other members. Other superannuation organisations have made similar warnings about the 2018 Budget changes.
The Australian Institute of Superannuation Trustees (AIST) also said that more needed to be done to address the superannuation gender gap.
AIST has been calling for an annual $1,000 additional super contribution for members receiving the LISTO, and the removal of the $450 monthly threshold for receiving Super Guarantee.
“While Budget measures to help pensioners access their home equity and expand the Pension work bonus are welcome, this doesn’t address the problem of most Australian women retiring with inadequate super balances and being almost entirely reliant on an age pension that is very low by international standards,” said AIST CEO Eva Scheerlinck.