New research from the Association of Superannuation Funds of Australia (ASFA) shows that Australians overwhelmingly support superannuation increasing to 12 per cent despite wage growth fears.
A survey of 1,375 Australians has found that the vast majority believe that the superannuation guarantee should increase to 12 per cent as scheduled. Only 12 per cent believed that it should stay at 9.5 per cent, while 13 per cent were undecided.
“Without question, Australians value their superannuation and they clearly support measures aimed at helping them to build the nest egg necessary to fund a dignified retirement in this country,” said ASFA chief executive Martin Fahy.
“Australia’s superannuation system enables Australians to retire with dignity. With the legislated increase of the superannuation guarantee to 12 per cent, and as the superannuation system matures, we expect to see a greater proportion of retirees relying less on the age pension and more on their superannuation.”
The research would appear to fly in the face of assumptions made by the Morrison government about the importance of wage growth to Australians in the wake of the COVID-19 crisis, which has been used as a central justification in proposals to cut the legislated increase. RBA governor Philip Lowe has also noted that an increase would likely hit wage growth.
“It will certainly have a negative effect on wages growth,” Governor Lowe said in August.
“If this increase goes ahead I would expect wage growth to be even lower than it otherwise would be. There will be an offset in terms of current income. Some people say that’s perfectly fine because people will have a higher future income…So there’s a trade-off here. Do we want people to have the income now or do we want them to have it later on?”
While some 42 per cent of respondents said that they would prefer to live on super and savings alone in retirement, only a third of respondents were confident that they would have enough to achieve a comfortable lifestyle during retirement. Confidence was lowest among women and those over 50.
Respondents also approved of funds being active on ESG issues, with 64 per cent of respondents approving on funds taking action on climate change and corporate governance, while only 20 per cent disapproved. Opinions were slightly more mixed on gender diversity, with 58 per cent approving versus 26 per cent disapproving.