The peak body for industry funds has opposed proposals from an unnamed industry group to allow low-income earners to opt out of compulsory superannuation, arguing it would leave around two million Australians in the workforce worse off in retirement.
The Australian Institute of Superannuation Trustees (AIST) was responding to media reports that reported on a pre-budget submission from the unnamed industry group, which proposed that those earning less than $37,000 a year could effectively receive a 9.5 per cent pay rise if they were to take home their super.
The AIST argued that allowing low-income workers to opt out of super would have a negative impact on part-time workers and women who currently retire with about half the super of men.
Executive manager, policy, David Haynes, said the move would impede the ability of future generations of taxpayers to fund the Age Pension, and would affect the long-term fiscal sustainability of the retirement income system.
"Super is not the solution to plugging Budget holes or lifting wages. It's about improving retirement outcomes for all Australians that include those on low incomes," Haynes said.
"It doesn't matter if you are a full age pensioner, a part pensioner or a self-funded retiree, every extra dollar of super makes a difference."
Senior cabinet ministers wanted Federal Treasure, Scott Morrison, to consider the idea of low income earners opting out of super, according to media reports.