Retirement
Real wage growth stalled following super freeze
Promises of pay rises through freezing the superannuation guarantee have not happened, with Australians not receiving a real wage increase, according to a think tank.
Real wage growth stalled following super freeze
Promises of pay rises through freezing the superannuation guarantee have not happened, with Australians not receiving a real wage increase, according to a think tank.
According to results collated by think tank Per Capita, workers have lost thousands of dollars in income and savings as a result of the freeze of the super guarantee rate.
When the Coalition government legislated to stop the SG rate rising to 12 per cent in 2014, then prime minister Tony Abbott told Parliament that he could confirm “that money that would otherwise be squirrelled away in superannuation funds will instead be in the pockets of the workers of Australia”.
Per Capita’s analysis showed that, since the super freeze was implemented in 2014, a worker on the full-time median wage has lost $4,332.99 in superannuation.
Over the same period, the median wage rose from $1,000 to $1,066 per week, or from $52,000 to $55,432 per year. That’s a loss of $900.99 based on nominal wage growth.
However, if we adjust for inflation, and look at real wage growth, which reflects the actual spending power of workers in today’s economy, the median wage actually falls – and falls significantly. In 2014, the real median wage was $56,524 in today’s dollars, now it is just $55,432.
Emma Dawson, lead author of the report and Per Capita’s executive director, said, “On any objective measure, workers have suffered a significant loss in net income since the SG freeze. This is rightfully worker’s money, and they deserve to know exactly what they have lost.”
So much for lower super rates leading to higher take-home wages.
As a result of the SG freeze, the average worker has lost $4,332.99 in super over the last five years, and their take-home pay has gone backwards by $1,092.00 a year, giving them a net loss of $5,424.99.
“Instead of going into the pockets of workers, as the government promised it would, those lost super savings have been pocketed by employers,” Ms Dawson concluded.
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