Industry Super Australia has launched an aggressive attack on the Morrison government following increasing threats the legislated rise in superannuation payments could be scrapped.
The peak body, which represents some of the largest super funds in the country, including Australian Super, Hostplus and Cbus, has lashed out at the government in a new national campaign to stop messing with workers’ retirement savings.
There has been growing speculation the scheduled increase in the superannuation guarantee (SG) could be ditched because of the economic wounds incurred from the coronavirus pandemic.
Over the next five years, SG payments to Australian workers are scheduled to incrementally increase from 9.5 per cent to 12 per cent.
This has already been legislated; however, a growing chorus of Coalition backbenchers, including Barnaby Joyce, Jason Falinski and Tim Wilson, have called for the rise to be delayed or scrapped.
ISA claims the government rescinding on increasing super benefits would force a slew of Australians to sell their house to fund retirement and would cost the aged-pension system an additional $33bn.
“Some federal politicians want to break an election promise and cut super, forcing Australians to work longer or retire with less,” ISA chief executive Bernie Dean said.
“It’s time for the government to stop messing with super and deliver their promise to workers.”
It has been argued a rise in SG payments would stifle wages growth and be an additional expense to businesses, which would be reluctant to hire new workers.
Both the Reserve Bank of Australia and the Grattan Institute have conducted research that found the SG rise would come at the expense of wages growth in the short-term.
ISA’s national media campaign, “Stop messing with workers’ super”, will first air on the Seven Network during Friday night’s AFL match between Collingwood and Western Bulldogs.
The industry fund body also argued recent comments from Treasurer Josh Frydenberg claiming the retirement savings could be more “flexible” were code for cutting the SG payments.
Neither Mr Frydenberg or the federal government has made an official stance on whether the SG rise should be delayed because of the pandemic or scrapped.
“Workers should know that when politicians start using the words flexibility and efficiency – they mean they want to cut your super leading to retirees having to sell their home,” Mr Dean said.
Former prime ministers Malcolm Turnbull and Paul Keating back the SG rise.
Mr Turnbull has previously noted that it was contradictory for politicians to be against an increase for Australian workers when SG contributions for parliamentary members and public servants sat at 15.4 per cent.
“If we cut to the chase here, politicians and public servants have a compulsory 15.4 per cent super contribution,” Mr Turnbull said at an ISA event on March 12.
“Isn’t it … somewhat patronising for people who benefit from 15.4 per cent super to say that working people should settle for 9.5 (per cent).”
His comments also coincided with an ACIL Allen report backed by ISA that found keeping the legislated rise would help grow the economy by $12bn and add more than 10,000 jobs.