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.
About the author
About the author
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more