Retirement
Superannuation guarantee estimated to save budget $17bn
Replacing the superannuation guarantee and means tested age pension with a more generous publicly funded age pension would see budget costs rise by $17.3 billion, according to a recent report.
Superannuation guarantee estimated to save budget $17bn
Replacing the superannuation guarantee and means tested age pension with a more generous publicly funded age pension would see budget costs rise by $17.3 billion, according to a recent report.
Recent analysis conducted by Rice Warner Actuaries has found that the superannuation guarantee will save the budget $17.3 billion this year, rising to $98.6 billion, in current dollars, by 2058.
The report, which was commissioned by Industry Super Australia, assessed various policy scenarios using a comprehensive group-based fiscal model that considered all relevant variables, including the impact of the super guarantee on the age pension, personal wealth, income and company taxes.
The analysis considered the full fiscal impact of effectively abandoning the super guarantee and all associated tax benefits and reverting to a more generous, but means tested, publicly funded pension that would deliver broadly equivalent retirement benefits.
In the scenario, the maximum rate of age pension was increased by 50 per cent to deliver the same outcome as the current age pension and the SG for a median wage earner.
In effect, Rice Warner said this replicates the path other countries have taken when they don’t have compulsory privately funded retirement schemes.
The report stated that replacing the SG with a higher age pension would result in a significant and immediate increase in age pension outlays that accelerates over time.
“By 2058, expenditure on the age pension [would be] doubled in real terms, demonstrating the importance of the SG in preventing a high fiscal cost as the population ages into the future,” the report said.
The report found that revoking the legislated 12 per cent SG rate and freezing it at 9.5 per cent would have a modest budget benefit in the short-term through higher taxation.
However, it found that the short-term budget benefit will be offset over time by lower superannuation earnings and increased age pension expenditure with a net negative budget impact evident after 25 years.
Industry Super Australia deputy chief executive Matt Linden said the findings of the report lay bare claims that super costs the budget more than it saves and strengthens the case for proceeding with the legislated rise in SG.
“It also shows compulsory super combined with a supplementary means tested pension is the most efficient pathway for governments to meet community expectations about retirement incomes,” said Mr Linden.
“Superannuation saves Australia from the budgetary, economic and social unrest evident in parts of Europe who have long struggled to grapple with unsustainable publicly funded pensions.”
RELATED ARTICLES
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Aware Super appoints Simon Warner as Chief Investment Officer
Aware Super has announced the appointment of Simon Warner as Chief Investment Officer, effective 1 December 2025, following a competitive global search to replace outgoing CIO Damian Graham, who ...Read more
Superannuation
Employment Hero pioneers real-time super payments with HeroClear integration
In a significant leap forward for Australia's payroll and superannuation systems, Employment Hero, in collaboration with Zepto and OZEDI, has successfully processed the country's first ...Read more
Superannuation
Rest launches Rest Pay to streamline superannuation payments and boost member outcomes
In a significant move aimed at enhancing compliance with upcoming superannuation regulations, Rest, one of Australia’s largest profit-to-member superannuation funds, has unveiled an innovative ...Read more
Superannuation
Rest appoints experienced governance expert to bolster superannuation fund
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Ed Waters as the new Company Secretary. Waters, who brings with him over 15 years of extensive ...Read more
Superannuation
Small businesses brace for cash flow challenges as Payday Super becomes law
With the new Payday Super legislation now enacted, small businesses across Australia are preparing for a significant shift in how they manage superannuation contributions. The law, which mandates a ...Read more
Superannuation
Rest launches Innovate RAP to support fairer super outcomes for First Nations members
In a significant move towards reconciliation and inclusivity, Rest, one of Australia's largest profit-to-member superannuation funds, has unveiled its Innovate Reconciliation Action Plan (RAP)Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Aware Super appoints Simon Warner as Chief Investment Officer
Aware Super has announced the appointment of Simon Warner as Chief Investment Officer, effective 1 December 2025, following a competitive global search to replace outgoing CIO Damian Graham, who ...Read more
