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Support for super increase craters

Lachlan Maddock
— 1 minute read

Just 41 per cent of economists surveyed by Finder believed that the compulsory superannuation guarantee should not be increased to 10 per cent next year.

More than half of experts (59 per cent) who weighed in on super for Finder’s survey believe that the super increase should be shelved due to its impact on wage growth, the fact that fees outstrip returns for low wage earners, and the belief that now “is not the time” due to the pandemic. 

Those in favour of the intended super increase believe it will boost stunted wages, allow people to start rebuilding what they withdrew during the pandemic and give the Australian savings system “a needed shot in the arm”.

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Former Opposition leader John Hewson said the decision “should not be taken lightly”. 

“Retirement incomes are a long-term strategic policy in national interest, not a short-term political plaything,” Mr Hewson said.

Mr Hewson has been a vocal supporter of the SG increase as political will builds for a delay, saying it was a “test of the government’s capacity to think strategically”. 

“This is not a political issue, it’s not about the need to exit the COVID recession – it’s about longer-term strategic challenges,” Mr Hewson told an ACTU summit on superannuation.

“It’s a challenge for good and responsible government, it’s got nothing to do with the other short-term challenges that can be used as an excuse. The government is now finding any argument not to [increase the SG]...if you step back you have to wonder if their aim is to kill off compulsory super altogether.”

But others have questioned why the increase should go ahead when it does little to improve retirement outcomes for some groups. 

“An increase in the [superannuation guarantee contribution] rate will not do anything to solve one of the major weaknesses...that it does not deliver adequate retirement incomes for a significant proportion of women,” said Saul Eslake, economist at Corinna Economic Advisory.

“How does making men contribute more solve that problem?” Mr Eslake said.

 

Support for super increase craters
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