Increasing the superannuation guarantee (SG) to 12 per cent by 2025 would boost the economy by $12 billion and boost employment and wages over time, according to new research commissioned by Industry Super Australia.
Former prime minister Malcolm Turnbull hit out at a range of Coalition MPs, including Andrew Bragg, Tim Wilson and Jason Falinski, who had called for the SG to be capped and for superannuation to be made accessible for housing deposits.
There was “resentment among some quarters of the Coalition of industry super because it’s seen as being too close to the unions,” Mr Turnbull said, as he launched the research from ACIL Allen with Industry Super Australia chair Greg Combet.
“But if we cut to the chase, politicians and public servants have 15.4 per cent super contributions that were determined a long time ago because it was felt that that was an appropriate level to provide sufficient savings for retirement.”
It was therefore “somewhat patronising for people who benefit from 15.4 per cent to say working people should settle for 9.5 per cent,” Mr Turnbull said.
He acknowledged that the Coalition MPs pushing for a super cap were “former colleagues for whom I have respect and affection but that doesn’t mean they’re always right”.
Accessing superannuation for housing “is one of the craziest ideas ever,” Mr Turnbull said.
It’s not super or wages
The research challenged the view that a rising SG would cut wages over the long term, meaning workers would have to choose between higher wages now or spending more decades into the future in retirement.
Mr Combet told the launch “increasing the super guarantee rate would boost our economy by $12 billion by 2040 creating 10,000 jobs in the process”.
That would occur through extra investment created by the boost to superannuation savings of $9.4 billion by 2040 if the SG rises go ahead as scheduled.
Legislation which has passed Parliament will see the SG rise from its current rate of 9.5 per cent to 12 per cent in 0.5-percentage-point annual increments until July 2025.
However, Treasurer Josh Frydenberg has recently admitted that he and PM Scott Morrison were considering blocking those rises because of the pandemic’s hit to the economy.
Mr Combet said claims that a rise in the SG would come out of wages had been proved wrong by the research and that stagnant wages growth in recent years had not been influenced by super increases.
“The super guarantee has only risen 0.5 per cent since 2002 – that’s 19 years ago – and yet by the nature of the conversation we’ve been having you’d think it was going up every year,” Mr Combet said.