The federal government is currently debating whether to see through the legislated super increase, with the super funds themselves backing the planned hike and arguing that by scrapping the planned lift, the government would be hurting the economy.
An ACIL Allen study, commissioned by Industry Super Australia (ISA), showed that the Australian economy will grow by $12 billion off the back of the super lift, with wages growth also tipped, including the creation of more than 10,000 new jobs.
ISA chairman Greg Combet said the report dispelled the myth that once money went into super, it simply “disappears into a blackhole without making any contribution to the broader economy”.
“We know that’s not the case and the pool of patient capital has a positive and lasting impact on employment, wages and economic growth,” he said.
The study also found that the billions available in extra capital will expand the economy, leading to a demand for more labour – which in turn fuels wage growth.
According to ISA, even assuming the same conservative pass-through rate that the Grattan Institute and the Retirement Income Review use, the report showed that while job creation and wage growth slightly slowed initially, they are quickly turned around by this wave of economic growth generated from the increased investment.
“The consequences of cutting super are crystal clear – it leads to permanently slashed wages, jobs lost, and the economy crimped all while adding to the aged pension and leaving Australians far worse off in retirement,” Mr Combet said.
Former Prime Minister Malcolm Turnbull has thrust his support behind the campaign, arguing for the superannuation guarantee lift.
“Australia’s superannuation system is the envy of the world,” he said on Friday.
“The legislated increase to 12 per cent should be maintained, not just to deliver a more secure retirement for millions of Australians, but to build stronger economic growth and higher wages,” he concluded.
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