Newly-elected NSW Liberal Senator and former Financial Services Council (FSC) policy executive, Andrew Bragg has called for the superannuation guarantee (SG) to be made voluntary for people earning less than $50,000.
Bragg used his maiden speech in the Senate to claim that the superannuation system was not working for Australians and that the industry had not made a case for even bigger super.
“I would change direction,” he said. “Superannuation should be made voluntary for Australians earning under $50,000.”
In doing so, Bragg pointed to Grattan Institute analysis which claimed that Australians were spending $23 billion a year on energy costs, but $30 billion a year on superannuation fees.
“Superannuation is a classic case of vested interests triumphing over the national interest,” he said. “Fees are too high and there is not enough competition.”
Senator Bragg will be delivering a keynote address at Super Review’s Future of Superannuation event in Melbourne, next month.
Comments
Senator Bragg needs a reality check. No one earning less than $50k year would make any voluntary contributions so what happens to these people when they reach retirement age. They will need to live off the pension, putting even more strain on the federal budgets and on collecting more tax to pay for it from working people. The idea around super was to eventually remove the pension, so people are self funded............sometimes people in politics, who should be far more educated on these matters, surprise me with their unconsidered opinions. Increase the super contribution to 12 per cent so people can self fund their retirement and increase concessional caps so people can put more money into their retirement!
Agree - stupid suggestion by this newbie senator.
The stupidity of politicians is astounding. The reason superannuation exists is it forces people to save for retirement, without it they simply won't. I'm also sick and tired of hearing from idiots like Senator Bragg talking about the fees paid in super. Is Senator Bragg suggestion that anyone associated with the superannuation industry has to work for free? Why not doctors, lawyers, accountants , even politicians.
That is the whole point. They will spend their whole life paying of their mortgage, so why make them wait until their 60, to pay it off out of their ridiculously small amount of super. Also, under the FOFA red tape, low income earners cannot afford to deal with financial advisers, so best for them to direct their super payments towards their mortgage each year instead. It is a cruel fantasy spread by the Union Super funds that low income people need super. After their house is paid for, they will collecting the full aged pension anyhow. So super for low income earners is next to pointless.
Well said KP. As a former Executive of the FSC Senator Bragg has let himself and the people he is meant to serve down. Perhaps he’s just grabbing for a headline? I’ll be sure to try and ask him if he will let me at next month’s Future of Superannuation event in Melbourne
Advantages of Bragg's ATO annual refund proposal in lieu of super for low income earners, include:
1. ATO returns will be completed much faster (just like this year)
2. Engagement levels & consolidation of multiple SGC super funds will surge to all time highs
3. Paying off the home mortgage faster will save low income earners hundreds of thousands in unnecessary interest bill imposts
4. Increase real wages now, boosting the economy
5. Rapacious admin & investment fees imposed on fund members by Union Super Funds will be slashed
6. Reducing home mortgage debt faster can help members reduce insurance cover, saving on premium costs
7. Fund members over 60 are doing home mortgage repayment from their super now, so why make them wait so long?
8. When the home mortgage is repaid, fund members can dramatically boost their concessional contributions if they wish.
9. There is no reduction to the SGC contributions level regime
10. The ATO can keep a full record of all contributions for lifetime RBL caps.
I'm inclined to agree. They pay more in Contributions Tax than if it was received in the hand up to around $50k as it is, I'd prefer to see a tiered Contributions Tax system that caps out at 15% rather than starts at 15%.
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