Liberal MPs are urging Prime Minister Scott Morrison to dump or delay an increase in the super guarantee to 12 per cent, just weeks after a federal election when there was no discussion of the move.

As the Treasurer prepares to launch a major inquiry into retirement incomes, backbenchers are also canvassing plans to allow workers to pay down mortgage debt rather than stash more cash in super.

On Monday, former Nationals leader Barnaby Joyce backed the debate, warning some small businesses faced a choice between paying more super and sacking staff.

“I think there is some merit in the argument that you don’t want to be taking money out of the economy when you’re trying to stimulate it,” Mr Joyce told Sunrise.

“When you run a business, you just have to find it. There’s no magic to this and if you find it sometimes you find it by putting off an employee.”

Treasurer @JoshFrydenberg is reportedly facing backbench pressure to dump an increase to the superannuation guarantee. #auspol pic.twitter.com/G0Jl45j8oO

— Sunrise (@sunriseon7) July 21, 2019

Some Liberal MPs have suggested that rather than increase the super guarantee from 9.5 per cent to 12 per cent, workers would be better off with a pay rise in their pocket now.

But to date no Coalition MPs have proposed a mechanism to ensure workers get a 2.5 per cent wage rise instead of companies simply pocketed the money if the super guarantee is delayed.

On Monday, however, Mr Morrison refused to budge on the issue.

“There’s no change to the government’s policy.” he said in question time in the House of Representatives.

The Australian newspaper reported on Monday that Liberal MPs 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 are urging debate on the topic.

Mr Hastie said it was a big concern that more Australians were retiring without paying off the family home.

“I’d rather have people have more of their own money to pay down their existing debt such as their mortgage and ease the cost of living now,” he said.

The Abbott government previously delayed Labor’s original timetable to increase the super guarantee by 12 per cent by two years, pushing the date out to 2025.

Labor frontbencher Joel Fitzgibbon said workers had no guarantee that wage rises would follow if the increase was further delayed.

“That’s a great leap of faith isn’t it? Company profits at the moment are very, very high and that is in large part because this government has presided over flat wages. Companies have been taking that and putting that in their pockets,” he said.

“Now this government … its response to flat wages is to take away 2.5 per cent that the Parliament has already legislated. It’s extraordinary.”

Mr Joyce interrupted to say what was being debated was another delay to the super guarantee.

“There is no decrease envisaged. What we are arguing about is a timing difference on the increase no-one is talking about a decrease,” he said.

Three scenarios showing how a 12 per cent super guarantee affects balances.

Labor MP Andrew Leigh said there was “always an excuse the Liberals have for not backing universal superannuation”.

“They didn’t like the universal superannuation scheme as a whole when it was introduced,” he said.

“John Howard promised he’d stick with the legislated pattern of increase in 1996, then broke that promise and froze the contributions.

“Tony Abbott pulled behind trick in 2013, promising that the pattern of increase to superannuation contributions would go on but then freezing it. 

“High-income workers enjoy more substantial contributions to universal superannuation – indeed, these Liberal parliamentarians who are arguing for less superannuation for low-income workers themselves have 15 per cent of their salary put into superannuation. Fifteen per cent is good enough for them. I’m not sure why they ought to be denying increases to lower-income workers.”

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