Retirement
How the super freeze will hurt the economic recovery
Industry Super Australia has warned that infrastructure spending will be lost if the government withdraws from its previously legislated increase to the superannuation guarantee.
How the super freeze will hurt the economic recovery
Industry Super Australia has warned that infrastructure spending will be lost if the government withdraws from its previously legislated increase to the superannuation guarantee.
Nine industry funds are tipped to spend $33 billion in infrastructure spending, which could create up to half a million jobs between 2020 and 2023, assuming the superannuation funds have the funds due to an increase in the super guarantee.
“Everyone benefits from a strong industry super system,” said Industry Super Australia (ISA) chief economist Stephen Anthony.
“It is proven to strengthen the economy, create jobs and grow workers’ retirement nest eggs, this report highlights the valuable opportunities that lie ahead.”
Research by ISA includes forecasts based on the present legislated scenario of small, incremental increases in the super guarantee and calls for a more efficient super system and stable policy settings, including sticking to the rate rises, to unlock additional investment.
Improving government procurement processes to save taxpayers money and get major public projects going quicker is also a focus.
ISA chief executive Bernie Dean pointed to a strong superannuation system being a win-win for the economy and members.
“Our economic recovery and workers’ dignity in retirement both hinge on stable and optimal policy settings, including the promised super guarantee rise and preserving savings for retirement,” Mr Dean said.
“Industry fund members are deeply invested in Australia’s future, which is helping to rebuild their retirement savings, keep businesses in business and Australians in jobs.”
Calls to freeze the legislated increase to 12 per cent have intensified as Australia begins to recover from COVID-19, with Treasurer Josh Frydenberg flagging the possibility of a freeze or delay in response to concerns about post-recession wage growth.
“You’ve heard from no less an authority than the [governor] of the Reserve Bank of Australia who said that an increase to the superannuation guarantee will lead to less income,” Mr Frydenberg said.
“Less income leads to less spending. Less spending leads to less jobs. Don’t get me wrong. I’m all in favour of superannuation. I think it’s very important that people save for their retirement. But there is a trade-off, and the trade-off is between wages and saving for retirement.”
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