Politicians who want employers to pour more money into workers superannuation accounts have been labelled “out of touch” by Small Business Council of Tasmania executive director Robert Mallett.
Compulsory super payments made by employers are due to increase gradually from 9.5 per cent of workers wages to 12 per cent from July next year.
Mr Mallett said the cost of any increase to the compulsory super contribution amount should be paid by employees and not employers.
“In the very beginning the superannuation guarantee levy was made up initially of a 3 per cent amount…workers forgave 3 per cent of their wage increase and it went into superannuation,” he said.
“Since then the other 6.5 per cent has been made up by employers. There’s been no contribution by employees.
“It’s time that if the superannuation guarantee levy was to go up, it should be an employee contribution not an employer contribution.”
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Liberal Senator Eric Abetz said the scheduled increase in compulsory super payments would be hard to wind back, but should be examined.
“Ultimately an increase in the super guarantee will mean less disposable income and make it more expensive to employ people, resulting in fewer jobs available,” Senator Abetz said.
“When Labor introduced the superannuation guarantee, they acknowledged that the more you put into super, the greater the impact on the actual weekly wage.
“The superannuation guarantee is legislated…however with the uncertainty of COVID-19 it is an area that needs continual examination.”
According to Labor Senator Helen Polley, COVID-19 should not be used to justify changes to the scheduled super payment increase.
“Too many Australians retire with insufficient retirement savings, which is why our world class super system needs to be strengthened and protected not undermined,” Senator Polley said.
“Contrary to some critics who argue that increasing the superannuation guarantee leads to lower wages, available data from the Australian Bureau of Statistics and the Attorney-General’s Department’s workplace agreements database indicates otherwise.
“The $3 trillion pool of super savings not only creates a retirement nest egg for Australians, it is being invested in infrastructure and businesses which are generating wealth and creating jobs.”
Liberal Senators Wendy Askew, Claire Chandler and Jonathon Duniam said the federal government had no plans to delay or abandon the compulsory super amount increase.
“We do understand that groups like Australian Council of Social Services, the Grattan Institute, business lobby groups and Industry Super Australia have agreed a rise in the superannuation guarantee will potentially have a detrimental effect on wages,” Senator Askew said.
“There are currently no plans to change the legislated increase, but the government does understand the very real pressures facing Australian businesses in the wake of the COVID-19 pandemic.”
Mr Mallett said the government’s position surprised him.
“The Liberal Senators are out of touch by thinking this legislation should go ahead come hell or high water,” Mr Mallett said.
“Taking cash out of small business people’s pockets and putting it into superannuation funds does nothing for our economy today and it runs in the face of the current government support for low income earners, where they’re allowing them to go into their superannuation funds and withdraw the money to be able to use it.
“It [the increase] should be re-thought or put off for at least another five years.”
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