The Grattan Institute suggested that 80 per cent of the cost of increasing super is passed to workers through lower wage rises within the life of an enterprise agreement.

Grattan’s household finances program director, Brendan Coates, said after studying 80,000 federal workplace agreements, the longer-term impact on wages could be even higher.

“This trade-off between more superannuation in retirement but lower living standards while working isn’t worth it for most Australians,” Mr Coates said.

He argued: “This new empirical analysis reinforces that the planned increase in compulsory super, from 9.5 per cent now to 12 per cent in July 2025, should be abandoned. Most Australians are already saving enough for their retirement.”

The researcher continued to suggest that wages growth has slowed in recent years, but nominal wages are still growing by more than 2 per cent a year, so employers have plenty of scope to slow the pace of wages growth if compulsory super contributions are increased.

Mr Coates believes if employers aren’t willing to offer large pay increases today, it’s hard to imagine why they would pay for higher super.

In fact, if workers’ bargaining power has fallen, employers are even less likely to pay for higher compulsory super than in the past. 

The Grattan Institute previously published a paper suggesting workers would be worse off under a changing scheme, which prompted fierce response from industry experts.

Rice Warner has criticised research from a number of think tanks in the presentation of its data around retirees and pension access.

While the man behind compulsory superannuation, Paul Keating, said wage growth issues’ effect on super “is the great lie and boggy analysis”. 

However, Mr Coates said the combined findings suggest conventional wisdom that “higher super means lower wages” is right.

“Together, these findings demand a rethink of Australia’s retirement incomes system,” Mr Coates concluded.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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