Key superannuation bodies have criticised the Government’s Budget decision to extend the time it will take for the superannuation guarantee to reach 12 per cent.
The Australian Institute of Superannuation Trustees' (AIST's) chief executive, Tom Garcia, said it was disappointing and concerning that the superannuation guarantee rate would be frozen for four years and would only reach the targeted 12 per cent in 2022/23.
He said the measure had effectively added another year to the timeline and represented a second change in 12 months.
“We are very disappointed that the Government has decided to push out the 12 per cent timeline further than originally planned. This will only make it harder for people to build up their super savings and have a dignified retirement,” Garcia said.
He claimed that plans to lift the age pension eligibility age to 70 could also significantly increase old age poverty among future generations of Australians unless there were appropriate measures to ensure older workers who were unable to work longer were not penalised.
“Changes to the age pension announced in tonight’s Budget will hit low income workers and poorest retirees the most,” he said citing AIST research highlighting that a significant minority of Australians (up to 40 per cent) retire involuntarily, with ill health and a lack of suitable jobs being major contributing factors.
“If we are to ensure our retirement system is both equitable and sustainable for the long term, we need a full and comprehensive review of the retirement income system rather than a quick fix, piecemeal approach that simply targets the most vulnerable,” Garcia said.
“We need to put everything on the table not just the age pension and access to superannuation."
