Claims by a group of Liberal party MPs that the superannuation guarantee (SG) should be held at 9.5 per cent to allow workers to get a pay rise “fly in the face of all available evidence”, the opposition say.
The group of government MPs that included Andrew Hastie (chairman of the house intelligence and security committee), Jason Falinski (MP for the Sydney seat of Mackellar) and Queensland senators Amanda Stoker and Gerard Rennick have urged Prime Minister Scott Morrison to hold off on legislated increases in the SG to raise it from 9.5 per cent to 12 per cent by 2025.
Instead they want to see wages rise 2.5 per cent without explaining a mechanism to make that happen.
No evidence of wage rises
Opposition spokesman for financial services Stephen Jones said there was nothing to show that a freezing of the SG rise would flow through to increased wages.
“There has been no increase in the SG since 2014 and, despite that, we have seen the flattest period of wage growth in our recent history.
“Under legislated changes the SG will rise in five 0.5 per cent increments from 2021 to 2025, and that is less what the government expects wages to go up in 2021,” he said.
The government expects wages to rise by 2.4 per cent in 2020, 2.5 per cent in 2021 and 3.5 per cent in 2022.
Politicians earn big super payments
The calls were particularly galling coming from politicians who “are some of the best-paid people in the community and receive higher superannuation payments than the average worker”, Mr Jones said.
Politicians receive among the highest superannuation payments and will still receive more than the average worker if the SG does rise to 12 per cent by 2025.
Workers getting a good deal in superannuation
The base pay for a politician is $211,250 and their 15 per cent superannuation payment is worked out on 80 per cent of that pay, or $167,250. That means a backbencher would earn the superannuation contribution limit of $25,000 a year.
The nation’s 127,718 Commonwealth public servants do even better, receiving 15.4 per cent in the SG.
Other workers doing better out of super than the majority on 9.5 per cent are 121,718 university teachers who earn 17 per cent, 80,000 Australian Defence Force members who draw 16.4 per cent, and many maritime workers who earn at least 11.75 per cent.
Victorian fire fighters who will soon be combined in a new organisation, Fire Rescue Victoria, also do well. They are members of a rare defined-benefit fund that allows them to choose the amount they would like to contribute.
The cost of no change
For the vast majority of workers who get the legislated super guarantee of 9.5 per cent of their salary, the results of holding back the SG at current levels would be expensive.
Their retirements at the age of 67 would be between $56,393 and $108,178 for younger people, according to calculations by Industry Super Australia.
Mr Jones said the losses could be as high as $250,000 for highly paid couples.
Senator Jane Hume, the Assistant Minister for Superannuation, Financial Services and Financial Technology said the government would not concede to the pressure from those in the party wanting to hold the SG rate at current levels.
“It has been legislated and there are no plans to change that,” she told The New Daily.
“Josh [Treasurer Frydenberg] was very clear on that.”
The New Daily is owned by Industry Super Holdings