The Australian Institute of Superannuation Trustees (AIST) has called for the Government to confirm a commitment to increasing the Superannuation Guarantee rate to 12%.
The Coalition delayed increases to the SG rate, so it would reach 12% from mid-2025 instead of the previously legislated mid-2019. However recent comments by senior members of the Government suggest this could be further delayed or paused.
AIST CEO Ms Eva Scheerlinck said it was “worrying” that the Government appeared to be backing away from its own legislated timetable for increases to the Super Guarantee rate.
“Leaving the super rate at 9.5 per cent would not deliver an adequate retirement income for most working Australians,” Ms Scheerlinck said.
“Lifting super to 12 per cent addresses the challenges of Australians living longer in retirement and ensures that our retirement income system is sustainable in the face of a rapidly ageing population.”
Minister for Revenue and Financial Services Kelly O’Dwyer suggested in a speech yesterday that the superannuation industry called for more super contributions out of self-interest:
The superannuation industry is often very quick to point out that the only way that people can achieve higher incomes in retirement is by compelling an ever increasing amount of wages to be sacrificed into superannuation. But they would say that wouldn’t they?
Minister O’Dwyer also said the Super Guarantee has a “detrimental impact ” on wages, a claim which AIST disputes as being without evidence.
“Many low-income earners receive the minimum wage which is set by the Fair Work Commission Expert Panel. There is no evidence the employers of these individuals have lifted wages in response to delays in the SG timetable,” said Ms Scheerlinck.
Ms Scheerlinck said stopping increases to the SG rate would leave future taxpayers vulnerable to ballooning age pension costs.
“Australia’s compulsory retirement savings system is the envy of other countries, who are now battling to support unfunded pensions.”
“Lifting the super rate to 12 per cent is about taking the responsible steps now for the long-term benefit of Australia.”