Superannuation Minister Jane Hume says the superannuation guarantee (SG) will rise to 12 per cent of wages by 2025 as is currently legislated.

At an event run by Industry Super Australia on Wednesday, Senator Hume said the federal government has “no intention” of campaigning to block the rises at next year’s election, or of allowing workers to receive the final 2 percentage-point increase as cash wages instead of super contributions.

“It’s not government policy and we are not even interested in it as an idea,” Senator Hume said of the potential wages swap.

Also speaking at the event was shadow superannuation minister Stephen Jones.

Mr Jones criticised the Coalition’s record on super by drawing attention to decisions made by the Abbott, Turnbull and Morrison governments to freeze hikes to the SG despite the rises being legislated early last decade.

Transport boost

Mr Jones also said that superannuation was not being used to its full potential in funding new infrastructure.

Among other things, he said the federal government should set up a structure to facilitate the investment of superannuation savings into interstate transport links.

Mr Jones said “a leadership role is absolutely needed from the Commonwealth, particularly if you are looking at interstate transport links or energy generation where [the Commonwealth] is the market regulator”.

He said investment by super funds into all major ports except Darwin and a range of road, rail and energy projects demonstrated that there was appetite for such investments.

But Senator Hume rejected the idea as it relied too heavily on government.

“It sounds to me very much like big government, central planning type of stuff, as opposed to outsourcing the retirement savings of every Australian to individual private sector organisations which is exactly what superannuation funds are,” she said.

But Mr Jones responded that the Morrison government had already put forward such a proposal.

“What we want to do is exactly what Scott Morrison said he was going to do in the middle of the pandemic: Set up the National Recovery Commission.”

That plan would have seen superannuation funds pitch to the government for projects it had identified.

“But [Mr Morrison] then dropped it like a hot potato,” Mr Jones said.

Using the Commonwealth as a facilitator of important national projects by dealing with state governments could involve tax concessions in some instances, he said.

But the fact that much investment had happened already was an indicator that this would be unnecessary most of the time.

“You’ve got superannuation funds that are major owners of highways, railways, ports and airports today,” he said.

Senator Hume said the government had already acted to boost infrastructure investment by super funds.

“Look at the good work done by [former Treasurer] Joe Hockey with recycling assets,” she said.

Recycling involves privatising government assets and using the money to invest in new projects.

Senator Hume told the conference that superannuation savings had reached $3.4 trillion and had “more than doubled since the Coalition came to power in 2013”.

“That puts us in a position of extraordinary strength,” she said.

Increased self-reliance

Superannuation growth meant that payouts to retirees now greatly exceeded payments by the government for aged support, Mr Jones said.

Although the government spent almost $60 billion on the pension and related payments, superannuants took $110 billion out of their funds each year, he said.

Reforms under the Coalition had been about “improving the efficiency, the transparency and choice for all Australians who are compelled to quarantine $1 out of every $10 they earn for as long as 45 years”, Senator Hume said.

The reforms included measures under the Your Future Your Super legislation that will staple super funds to members for life unless they choose otherwise and will end wasteful multi-fund memberships.

They also heighten the focus of spending by funds as being in members’ best financial interests.

Another reform sees underperforming default super funds called out by regulator APRA and barred from accepting new members if they fail to meet performance benchmarks for two years in a row.

The package will boost members’ accounts by $17.9 billion over 10 years, Senator Hume said.

The New Daily is owned by Industry Super Holdings