Finance Work Calls to scrap lift in workers’ super payments in favour of wage rises

Calls to scrap lift in workers’ super payments in favour of wage rises

super guarantee wages
It's time for a real conversation on superannuation, Mathew Browning writes.
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Scott Morrison is under pressure to rule out calls from his own backbench to scrap a promised increase to the superannuation guarantee.

Critics argue it would be better for workers to get the money through wage increases now than in delayed increases to their super.

The super guarantee is at 9.5 per cent and due to rise to 10 per cent in 2021. On the current timeframe it will increase by half a percentage point every year after that until 2025, when it reaches 12 per cent.

Calls to reconsider the super guarantee have been fuelled by research from the Grattan Institute that argues increasing it could leave middle income earners worse off.

The Grattan Institute research is contested by the super industry, which argues increasing the superannuation guarantee payment to 12 per cent by 2025 will increase the retirement savings of the average worker by $69,000.

House economics committee chairman Tim Wilson said it was time for a national debate about giving workers the choice to spend their money and pay off debt now, rather than putting the cash into super.

“If it’s a choice between better wages now or higher super later, I would go with wage rises now,” he told The New Daily.

However, Mr Wilson said he did not yet support a mechanism to guarantee that if workers’ super did not rise by another 2.5 per cent then they would receive an equivalent amount in a pay rise.

The Liberal MP said he would have to consider the consequences of such a move. He noted that legislators had found a way to guarantee businesses paid compulsory super.

Labor’s treasury spokesman Jim Chalmers called on the Prime Minister to rule out the idea.

“It’s beyond hypocritical that the very same Coalition MPs who pretended to be champions of retirees now want to attack the retirement savings of Australian workers,” he said.

“Scott Morrison needs to come out today and pull his rebel backbenchers into line.

“The Liberals have already delayed Labor’s important reforms to increase the superannuation guarantee to 12 per cent so workers can enjoy a more dignified retirement.”

The New Daily is owned by Industry Super Holdings