Labor has seemingly dropped support for faster increases to the Superannuation Guarantee rate, in a week which also saw the adoption of savings from super changes in the 2016 Budget but not the policies.
The ALP has frequently criticised the Government for freezing the SG rate at 9.5% and slowing the increase to 12%. However Shadow Treasurer Chris Bowen has now indicated his party won’t have a policy of faster increases in the SG rate.
In a press conference the Shadow Treasurer was asked: “Another area of your super policy that isn’t clear on your list of positive policies. The Government froze the super guarantee at 9.5 per cent until I think it was 2018. After that, I presume it increases. At the time you were very vocal against that decision. I assume now you accept that, because we’ve had no policy?”
Mr Bowen responded: “We would have liked to have increased it faster. We would have liked to. The fiscal circumstances meant we prioritised our decisions. We really would have liked to have increased it faster. I think the difference, frankly, we know what Liberals do. They freeze it and when it gets time to implement it, they freeze it again and again, and you never actually see it increased. That’s what they do. They just never increase superannuation. They pretend they will in a couple of years’ time and when it gets to a couple of years’ time they say they can’t afford it. When it gets to the time to increase it under us, we will increase it. That is the difference.”
“You will increase it from 2018 then?”
“Yes, that’s right, the timetable,” answered Mr Bowen.
It should be noted that the Super Guarantee rate is not scheduled to increase in 2018. The currently legislated timetable has the rate remaining at the current 9.5% until 1 July 2021. A 12% SG Rate will not be reached until 1 July 2025. Before the timetable was amended by the current Government the 12% SG rate was set to be reached in July 2019.
The ALP platform says that the party will support faster increases to the SG rate “when prudent”.
Labor Shadow Minister for Finance, Tony Burke, when recently asked about the SG rate following a debate at the National Press Club said that “further announcements on where we would take that and how we might differ from what the Government is doing is something that we haven’t announced at this point of the campaign. Anything that we’d do would be based on what’s affordable”.
Minister for Finance Mathias Cormann, at the same event, said the Liberal party “remain committed to that same timetable” for Super Guarantee rate increases.
Labor leader Bill Shorten was asked in a press conference: “Why has Labor surrendered to at the government’s delay to the increase of the superannuation guarantee to 12% rather than choosing a faster path?”
“Oh, You’d never trust the Liberals to increase superannuation,” answered Mr Shorten.
“You know the history of superannuation? I won’t give it to you chapter and verse but just a couple of key facts. It was Labor working with unions and employers who forwent a three per cent wage rise and put that into compulsory super. The Liberals had nothing to say and opposed that. When it was introduced in 1992, the compulsory three per cent for all Australians, that was rejected. When it was moved to 9 per cent – sorry in ’92 – that was rejected by the Liberals. When we sought to move it and increase it to 12 per cent, the Liberals opposed it then and they’ve frozen the increases. If you’re worried about making sure we lift the levels of compulsory superannuation, vote Labor on Saturday,” he said.