The pledge from Opposition Leader Anthony Albanese has promised Labor will keep in line with already legislated rises to superannuation contributions, scheduled to rise from its current rate of 9.5 per cent to 12 per cent within the next few years.
The Morrison government has already signalled that it may freeze the rate, rather than pursuing the planned increase to 10 per cent in July. The recent Retirement Income Review added fuel to the fire when it confirmed higher super would come out of workers’ wages.
Stephen Jones, shadow assistant treasurer and shadow minister for financial services and superannuation called the potential Coalition reversal out of the super guarantee (SG) rise hypocritical, given federal politicians receive super contributions at a rate of 15.4 per cent of their salaries.
“The government’s dodgy sums to justify a super cut assume annualised wages growth of 4 per cent, something it has never achieved in seven years in power (during which it has presided over the worst wages performance in economic history,” Mr Jones said.
But others have stepped up, to position themselves against the Labor purview.
Financial professional association Chartered Accountants Australia and New Zealand (CA ANZ) has signalled its support for a deferral of the SG rise, in light of the current economic situation.
Tony Negline, superannuation leader at CA ANZ commented there had been the first domestic recession in 29 years, highest unemployment in two decades, record stagnancy in wage growth and heightened uncertainty.
“The thing about a game-changer like a global pandemic is that it changes the game, which is why we need to call a time-out and look at the current state of play,” Mr Negline said.
“The reason we paused our policy is jobs. Super is a percentage of a salary and you need a job to get a salary. The priority right now should be keeping people who have them in jobs, and helping the unemployed get new ones.
“To say that we need to increase the super rate right now while we are still navigating out of this pandemic is to focus on the very pointy end of Maslow’s hierarchy of needs, while everyone else is in survival mode.”
He added accountants would be well aware from working with businesses, that after being financially slammed, they could cop the tough choice of keeping an employee, giving a pay rise, or hire a new one.
But the body has expressed concerns with other factors, such as the COVID early release scheme, which allows Australians to withdraw $36 billion and calls to allow early access to savings to place towards first home ownership.
“Our super system needs protection. Some are putting it to the sword and it needs a shield. But what we can’t do is make it more generous right now,” Mr Negline said.
“We need to be making it easier, not harder, to boost the economy for businesses to invest and for jobs to be created. Let’s park the super increase priority to when the vaccine is rolled out and when the employment and GDP numbers look a little less like a horror show.”
Sarah Simpkins
Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth.
Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio.
You can contact her on [email protected].
