Retirement
Why it’s the right idea but wrong time to lift the SG
As Australia surfaces from its first economic recession in almost three decades, the focus should be on creating new jobs instead of lifting the superannuation guarantee, an accounting body has said.
Why it’s the right idea but wrong time to lift the SG
As Australia surfaces from its first economic recession in almost three decades, the focus should be on creating new jobs instead of lifting the superannuation guarantee, an accounting body has said.
With rumours continuing to swirl that the Morrison government will pause the planned compulsory super guarantee hike, Chartered Accountants Australia have released a statement defending the PM, opining that the pause is not a backflip, nor a broken promise, but an economic plan that makes sense.
Noting that while it is the right idea to lift the superannuation guarantee at some point, the current timing is wrong, the CA judged.
“The thing about a game changer like a global pandemic is that it changes the game, which is why we need to call a timeout and look at the current state of play,” CA ANZ’s superannuation leader, Tony Negline, said.
Mr Negline opined that the Australian economy needs to hold the rate of superannuation until Australia has decreased its 6.6 per cent unemployment rate.
“Super is a percentage of a salary, and you need a job to get a salary,” Mr Negline noted.
“The priority right now should be keeping people who have them in jobs, and helping the unemployed get new ones."
Mr Negline cited recent research and the Retirement Income Review, which found that increases in employer superannuation contributions often mean employee salary and wages increase at a slower rate.
“To say that we need to increase the super rate right now while we are still navigating out of this pandemic is to focus on the very pointy end of Maslow’s hierarchy of needs, while everyone else is in survival mode,” he said.
Labor commits to lifting the SG
While the Liberal Party has not said whether or not it will commit to the legislated increase, the leader of the opposition, Anthony Albanese, said if his government is elected, he will go ahead with superannuation guarantee lift.
In a statement to media, Mr Albanese committed to protecting the workforce from industrial relation changes as well as holding the rate of superannuation at 12 per cent.
“Anthony Albanese’s pledge today to back in already-legislated rises in superannuation contributions to 12 per cent means wage earners can have the confidence to plan for a dignified retirement,” a statement reads.
“Scott Morrison, who promised to raise superannuation contributions to 12 per cent at the last election but broke his word and is now planning to repeal his own legislation.”
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