Australians have “overwhelmingly rejected” an attempt to slow or freeze increases in the Superannuation Guarantee, says Industry Super Australia.
A survey, released by Industry Super Australia, found 87% supported the Super Guarantee rate rising from 9.5%, with some preferring either 10%, 12% or 15%.
The Super Guarantee rate is currently scheduled, in legislation, to increase to 10% in 2021, and then slowly increase until it reaches 12% in 2025.
The survey was conducted in early July – before the most recent public debate about the Super Guarantee rate. Reports were that a group of Coalition backbenchers were agitating for increases to the Super Guarantee to be stopped, leading to senior Ministers ruling out any changes to the Super Guarantee.
“Australians have overwhelmingly rejected a push to wind back the super guarantee. These results should send a clear message to the Government to keep their hands off Australians’ super,” said Industry Super Australia Chief Executive Bernie Dean.
“Australians are rightly concerned about their retirement and whether they will be able to make ends meet. Freezing the super guarantee will force Australians to work longer, and increase the burden on the pension.”
“Any attempt to wind back the scheduled increase or undermine compulsory contributions would fly in the face of community sentiment.”
The survey found that the more people expected to have in superannuation at retirement the more likely they were to think the SG rate should increase. Of the people who expected to have $500,000 or more in super (16% of the people who responded), only 7% thought the SG rate should stay at 9.5%, with the others thinking it should reach either 10%, 12% or 15% by 2025. But for people who expected to have between $50,000 and $199,000 (26% of those who answered), 13% thought the rate should stay at 9.5%. 24% of those expecting less than $50,000 in super thought the SG rate should stay at 9.5%.
The survey also found that 54% thought that increasing Super Guarantee was at least some form of increase in a period of slow wages growth. While 43% thought that increasing super contributions would make it less likely they would receive a pay increase.
55% said that if increases to the SG rate were frozen then they would be worried about having to rely on the age pension. 54% said they would have to work longer to have enough money to retire if super contributions didn’t increase.
66% of respondents said that “everyone will foot the bill” if super contributions don’t increase, due to increased pressure on the age pension.
Only 32% agreed with the idea that low income earners should be able to opt-out of Super Guarantee – something recently floated by a Coalition backbencher. 32% also agreed with letting high income earners opt-out because they “will have enough money in retirement”.
Only 19% expected to be able to live comfortably off their super, with 32% expecting to “get by” with a combination of superannuation and the age pension. 24% thought they would “struggle to get by” and 25% were unsure.
Industry Super Australia calculates that freezing the SG rate at 9.5% would cost a 30 year old male currently earning $85,000 a year $147,000 by the time they retired – which is a loss of almost $5,500 a year of income in retirement.
“Australians will either need to work longer to make up that shortfall, or increase their reliance on the pension – at a cost to every taxpayer. It is easy to see the damage a freeze will do to people’s quality of life in retirement,” said Industry Super Australia.
These findings are similar to those released by the Association of Superannuation Funds of Australia (ASFA) in early June. That survey found 79.9% supported gradually increasing the SG rate to 12% by 2025.
The Industry Super Australia survey was conducted by UMR, and involved 1,099 Australians aged 18 years or older.