Retirement
Does Australia really need compulsory super?
Making superannuation opt-in rather than compulsory could have huge ramifications for everyday Australians, despite a NSW senator seeing the option as a win-win for low-income earners and the government.
Does Australia really need compulsory super?
Making superannuation opt-in rather than compulsory could have huge ramifications for everyday Australians, despite a NSW senator seeing the option as a win-win for low-income earners and the government.

In his maiden speech, newly elected NSW senator Andrew Bragg brought up the idea that superannuation should be an opt-in system rather than compulsory, citing the adoption of such a change being capable of bringing big savings to the government.
He remarked that “super should be made voluntary for Australians earning under $50,000”.
According to his option, “taxpayers could simply tick a box to get a refund when filing an annual tax return”.
Mr Bragg said he had commissioned modelling from Rice Warner actuaries in considering such a reform, “which estimates a saving to government of $1.8 billion in the first year alone”.

Helping Australians get their first home
The senator said that the removal of superannuation as a compulsory aspect of salary would make it easier for Australians to own their first home, with many currently priced out of the market.
“Super is making home ownership so much harder for lower-income Australians. The CIS found that the average deposit for a first home has doubled between 2000 and 2015. Since super started in 1992, every single age group has experienced lower levels of home ownership,” Mr Bragg highlighted.
Does the maths stack up?
Industry Super Australia analysis said that removal of the compulsory super contribution for a person on $50,000 a year, would simply contribute to a higher personal income tax bill.
It said this could see an individual paying an additional $1,710 a year in tax, which is an increase of nearly $1,000 on money that would otherwise be in their super account.
“Any claim that this would ‘save’ $1.8 billion conveniently ignores the fact that wages are taxed at a higher rate than superannuation – meaning this would actually cost low-income workers more in the long run,” Industry Super Australia said.
Industry Super Australia chief executive Bernie Dean commented that “this extreme plan will see low-income workers pay more tax only to end up with less money at retirement”.
“Taking away compulsory super for low-income earners would condemn some of our most vulnerable Australians to poverty in retirement,” continued Mr Dean.
Calling it a “flawed plan”, such a change would see low-income workers pay more tax for less money at retirement, Industry Super Australia said, while everyone will foot the bill as dependence on the pension increases.
About the author

About the author


Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more

Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more

Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more

Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more

Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more

Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more

Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more

Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more

Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more

Superannuation
SuperAPI co-founder criticises Labor's superannuation tax as 'sneaky tax on young people'
The co-founder of SuperAPI has labelled Labor's proposed tax on superannuation balances above $3 million as a "sneaky tax on young people, tomorrow" disguised as a policy targeting wealthy retirees ...Read more

Superannuation
Election policies could reshape Australia's superannuation landscape, expert warns
Competing superannuation policies from Australia's major political parties could have significant implications for investors and retirees, according to a financial expert. Read more

Superannuation
Industry leaders weigh in on concessional super tax as Budget confirms $55bn investment
Changes to the taxation of superannuation earnings and contributions have drawn mixed responses from financial and payroll sector leaders, as the Federal Budget confirms over $55 billion in ...Read more

Superannuation
Call for indexation on super tax cap as $3m threshold draws criticism
A senior executive in the superannuation technology sector has criticised the Federal Government for failing to index the proposed $3 million superannuation tax cap, arguing the measure will unfairly ...Read more

Superannuation
Rest members back calls for fairer superannuation rules ahead of Federal Budget
Rest has called on the Federal Government to implement superannuation reforms aimed at improving fairness across the system, after member survey results showed strong support for a range of proposed ...Read more

Superannuation
Rest welcomes progress on ‘Payday Super’ reform
Rest, one of Australia’s largest profit-to-member superannuation funds, has welcomed the Australian Government’s release of draft ‘Payday Super’ legislation, which aims to align Superannuation ...Read more

Superannuation
SuperAPI and Humanforce partner to improve superannuation compliance for one million Australians
Superannuation engagement platform SuperAPI has partnered with human capital management provider Humanforce to streamline payroll and superannuation contributions for more than one million Australian ...Read more