Shadow treasurer Jim Chalmers has foreshadowed that the government will scrap the legislated increases of the superannuation guarantee from 9.5 per cent to 12 per cent by 2025, as it pursues “a dangerous ideology”.
Addressing an Association of Superannuation Funds of Australia (ASFA) conference earlier this week, Mr Chalmers explained that the government was trying to frame the need to scrap the increase as a way to boost wages, but that was clearly not the case.
“Attacks on super are as deliberate and calculated as their [the government’s] attacks on wages,” Mr Chalmers said. “We are dealing with a Liberal Party that is going down a spiral of dangerous ideology and extreme partisan envy, taking workers’ wages and super with it.
“No governing party which genuinely believes in super would undermine it so frequently. No party governing in the interests of ordinary Australian working families would do so much damage to retirement incomes.”
Mr Chalmers said trying to paint a picture of workers having to choose between higher wages or an increase in the superannuation guarantee ignored the fact that wages growth and retirement incomes had both been inadequate for many Australians for too long.
He also pointed out that the recent freeze to increases in the superannuation guarantee had contributed little to wages growth.
“In the six years before the government froze the super guarantee in 2014, wages grew at about 3.3 per cent, but in the six years since, wages growth has averaged barely 2 per cent,” Mr Chalmers said. “The last super freeze didn’t spur wages growth.
“Under this government, now in its eighth year, wages have hovered around record lows – the longest period of sustained low wages growth in Australia’s history. Meanwhile, too many people are retiring without sufficient savings to live on.
“If wages had not been so weak since the 2014 super freeze, then the average 30-year-old could have an extra $40,000 in super when they retired.”
Read more: Calls to tax retirees’ super income
Mr Chalmers referenced former finance minister Matthias Cormann’s comments that low wages growth was a deliberate design feature of the government’s economic architecture, and showed their true intentions were not about achieving higher wages.
“The Morrison government should stop pretending another super freeze is about higher wages instead of higher super, when the truth is they want neither and they have form on both,” Mr Chalmers said.
“Instead of developing a plan to boost wages and retirement incomes at the same time, the government wants to undermine both, by framing it as a simple but fundamentally false choice.”
Read more: Super funds go to war with the government
Last week, actuarial firm Rice Warner released a report detailing how not proceeding with the planned superannuation increases would lead to Age Pension costs blowing out by $33 billion over coming decades.
Minister for superannuation Jane Hume recently called on retirees not to plan on more government support, but instead manage their own money more efficiently and access the capital in their home in order to ensure a more comfortable retirement.
The government’s Your Future, Your Super changes were also introduced into parliament on Wednesday.
These changes aim to reduce waste in the system by having super accounts follow employees when they move between jobs and introducing an objective performance test for superannuation products.
The legislation has been heavily criticised by Industry Super Australia (ISA), with claims it would allow ‘dud’ retail funds to cream $10 billion a year from Australian workers.
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