The union movement will push for a rise in the superannuation guarantee (SG) to 15 per cent by 2030 at the Australian Labor Party National Conference in Adelaide this weekend.
The motion will first call for pushing the SG up to 12 per cent by 2023, two years ahead of the current target of 2025. And parliamentary party leader Bill Shorten has not ruled out backing the move.
The unions will also call for a controversial ban on for-profit superannuation funds in the wake of the scandals uncovered by financial services royal commission. However, that is unlikely to receive support at the conference, with shadow Treasurer Chris Bowen saying he was “not interested in advantaging one sector of super over the other”.
The Transport Workers Union, along with the militant Construction, Forestry, Mining and Energy Union, will put a motion to the conference aimed at reversing the Abbott government’s decision to delay raising the SG to 12 per cent until 2025. A Labor government had earlier planned to reach 12 per cent by 2019.
A TWU spokeswoman said the wording would be as follows:
“Labor will protect and grow superannuation to provide a comfortable retirement for all Australians. This will include … fast-tracking the Superannuation Guarantee increase to 12 per cent, to provide millions of Australians with higher retirement incomes.”
The SG increases would be set at 0.75 per cent a year from the time Labor got to power, the motion will say. That would push the SG to 12 per cent by 2023, two years before the current target.
15 per cent the next target
The motion will also call for legislating for the SG to be pushed to 15 per cent by 2030. If accepted by the party, that would be a significant reform as both Labor and the Coalition government are currently only committed to the SG reaching 12 per cent.
Labor shadow Financial Services minister Clare O’Neil was supportive of the planned motions, but did not commit the parliamentary party to directly support them.
“Our movement built superannuation, we are proud of it and many people at National Conference will be engaged in a conversation about how to improve it – that’s a good thing and that’s a healthy political party in action.”
“We’re looking forward to discussing superannuation policy at national conference,” Ms O’Neil said.
The prospect of a quicker than planned SG rise to 12 per cent was welcomed by the superannuation industry. A spokesman for Industry Super Australia told The New Daily the group was “very supportive of the move”.
“The current rate of increase is too low and we think it should be accelerated.”
Martin Fahy, CEO of the Association of Superannuation Funds of Australia, said “ASFA has long advocated for moving the Superannuation Guarantee to 12 per cent and we support any initiatives to get there as quickly as possible”.
An Australian Council of Trade Unions spokesman said the group supported speeding up the SG increases.
However, employer groups were against the move, with Scott Barklamb, workplace relations director at the Australian Chamber of Commerce and Industry, warning “against bringing forward scheduled increases in superannuation contributions” which currently are not scheduled to rise till mid 2021.
“Australian business cannot see any case to change approach midstream, departing from the timetable for increases adopted by our Parliament in 2014,” he said.
Innes Willox, CEO AI Group, said: “If wage rates, prices and productivity were to remain unchanged, raising the SG in stages would lift the costs of employment and slow investment and the pace of jobs creation.”
Peter Strong, CEO of small business group COSBOA, said “the community will pay for it if there is no commensurate productivity rise.”
Assistant Treasurer Stuart Robert said the Coalition did not want to change the SG policy. “The Morrison Government is committed to increasing the Superannuation Guarantee to 12 per cent by 2025. It is important that people have certainty around how much their compulsory superannuation contributions will be into the future so they can plan accordingly.”
A rise in the SG to 12 per cent would see superannuation costs for employers rise $2.8 billion in current dollars.
The New Daily is owned by Industry Super Holdings