Industry superannuation groups have pointed to comments by newly-elected NSW Liberal Party Senator, Andrew Bragg as further evidence of the Government’s doubtful intentions with respect to delivering the time-table for increasing the superannuation guarantee to 12 per cent.
Both the Australian Institute of Superannuation Trustees (AIST) and Industry Super Australia (ISA) have expressed concern about the Government’s intentions with AIST chief executive, Eva Scheerlinck being particularly critical of Bragg’s suggestion that the superannuation guarantee should be optional for workers earning less than $50,000.
Scheerlinck said taking super away from low income earners would consign them to years of poverty in retirement and was a step backwards to the days when superannuation was a privilege granted only to company execs and career public servants.
Industry Super Australia chief executive, Bernie Dean said that taking away compulsory superannuation for low income earners would not only undermine the very premise of Australia’s superannuation system, it would see vulnerable workers pay more taxes for less money at retirement.
“Any claim that this would save $1.8 billion conveniently ignores the fact that wages are taxed at a higher rate than superannuation – meaning this would actually cost low income workers more in the long run,” he said.
Scheerlinck said calls to effectively remove low income earners from the super system had nothing to do with helping the less well-off and everything to do with saving the Government money.
“Well-paid Coalition MPs who receive super contributions of at least 15.4 per cent need to step out of their bubble and ask people what it is like to live on the Age Pension without any extra savings,” she said.
Ms Scheerlinck said the legislated increase in the Superannuation Guarantee rate from 9.5 per cent to 12 per cent would improve the retirement outcomes for all working Australians and that any changes to the timetable would only serve to further undermine confidence in the superannuation system.
“The current debate and uncertainty surrounding the legislated timetable for increasing the Superannuation Guarantee rate is unhelpful for Australians trying to make retirement plans and only serves to undermine confidence in a superannuation system that is routinely rated as one of the best pension systems in the world,” she said.
“We need strong leadership from the Morrison Government to rule out further changes to the legislated timetable for increasing the Superannuation Guarantee rate and make it clear that superannuation is for everyone, not just the well-off,” Ms Scheerlinck said.