Prime Minister Scott Morrison has flagged the possibility of freezing the legislated super guarantee increase amid concern that it would hit jobs and growth.
Following RBA governor Philip Lowe’s comments that higher superannuation would hit wage growth, Prime Minister Morrison said that COVID-19 would mean reassessing the legislated increase to the super guarantee.
“On the issue of the superannuation guarantee we’re very aware of those issues and, you’d also be aware of the statements that I and the [Finance Minister] and the [Treasurer] have made during the course of the election campaign as well,” Mr Morrison told media.
“There’s been a rather significant event since then, but nevertheless they are matters we are aware of and they have to be considered in the balance of all the other things the government is doing in this space.”
A freeze to the super guarantee would see Mr Morrison reneging on a key election promise. While both Mr Morrison and Finance Minister Mathias Cormann categorically ruled out any changes to the timetable for the legislated increase, a number of backbench MPs – including Tim Wilson, James Paterson, and Andrew Bragg – have called for the increase to be frozen in the face of the economic havoc that COVID-19 has created.
But Mr Morrison’s comments have been met with fury from the Labor Party, with shadow finance minister Stephen Jones warning Mr Morrison’s “broken promise” would impact retirement incomes for thousands of Australians.
“If Scott Morrison goes back on his commitment to the long-promised, legislated, and overdue superannuation guarantee increases it will be an attack on workers and their standard of living in retirement,” Mr Jones said.
“The last time the Liberals and Nationals froze the [superannuation guarantee], wages growth didn’t pick up, we got record low wages growth instead. Scott Morrison and Josh Frydenberg have repeatedly and emphatically ruled out any changes to the legislated [superannuation guarantee].”
Superannuation policy has become increasingly politicised during the COVID-19 crisis, with ideological battlelines drawn up over both the early release scheme and the case for freezing the guarantee. Governor Lowe’s comments last week – along with new research from the Grattan Institute – appear to have sparked a new stage in the fight over super, despite the governor himself saying he did not want to be drawn into political debate over the trade-off between low wages and increased retirement income.