According to Industry Super Australia (ISA), the Grattan Institute’s claims that workers overwhelmingly bear the burden of increases in compulsory superannuation through lower wage growth are unfounded, with members being worse off if the guarantee is not raised.
According to ISA chief executive Bernie Dean, “The Grattan Institute overestimates contributions, overestimates payouts, makes half the population live too long, and fails to reflect the distribution of retirement savings and the persistence of low balances.”
ISA said independent research by economist Jim Stanford showed no evidence of a one-to-one trade-off between super contributions and wage growth.
Mr Stanford found that there is no visible correlation between increasing in the superannuation guarantee rate and low wages, and no evidence to suggest that freezing the SG rate will increase wages by the same amount.
“This report is nothing new. Grattan came to this flawed conclusion last year and have now come back with cherry-picked information to support a preconceived fantasy view of the world that models part-time workers, the self-employed and women out of existence,” Mr Dean said.
ISA analysis showed that more than 8 million Australians could be worse off in retirement if the super rate is cut, losing more than $14.1 billion in super a year, or around $1,630 a year for the average person.
For an average 30-year-old couple working full-time, detailed modelling showed cutting the SG increase would deprive them of up to $200,000 in super by the time they retire.
“The only way to give Australians dignity, choice and control in their retirement is by the government raising compulsory superannuation,” Mr Dean said.
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