New year, new super changes

“In total, Australians will get an extra $1.5 billion paid in super in the next 12 months,” the group said.

“Half of the extra super payments — about $784 million will go to those under 40 — and more people in their 20s will get a super boost than any other age bracket. The extra contributions will help young workers recoup the savings they lost after they were encouraged to raid their super to support themselves through the coronavirus downturn.”

People under 40 would receive 54 per cent of total payments as a result of the SG increase, Industry Super data revealed, while women would also benefit slightly more, with 3.41 million women due to receive the increased payments compared with 3.36 million men.

Speaking to News Corp on Wednesday, former prime minister Paul Keating also hailed the increase as “a historic moment”, saying the move reflected “the maturity of the Australian workforce in agreeing to set aside 10 per cent of their wages and salaries for a later and better retirement”.

However, Liberal backbenchers Tim Wilson and Andrew Bragg, both of whom are notorious critics of the current settings of the super system, were quick to jump on Mr Keating’s comments as tantamount to an admission that workers were sacrificing future short-term wage growth to put more money in super.

The issue was debated at length last year, with the head of the RBA and the government’s Retirement Income Review panel pointing to a trade-off with potential slower wages growth before the Coalition went ahead with the SG rise.

Mr Wilson posted on Twitter that although the super industry had been claiming that super was “free money” and “isn’t wages”, Mr Keating’s comments indicated that “super is wages”.

“More super, less wages; more wages, less super,” he tweeted.

Senator Bragg tweeted that Mr Keating should “thank the Liberals for passing reforms that finally protect workers against plundering by unions and financial institutions, 30 years late”.

He was referring to the Coalition’s Your Future, Your Super reforms, which passed Parliament in June following a heated debate and a number of amendments and will be rolled out from Thursday.

The reforms apply a performance test to super funds and will lock underperforming funds out of receiving further member contributions, as well as strengthening trustee obligations to manage and spend money in members’ best interests.

Mr Bragg applauded the government’s move to “[achieve] a structural reform of the broken super system” and “deliver a massive productivity boost” through the new measures.

Consumer advocacy group Super Consumers Australia also applauded provisions in the reforms to allow members to compare their fund’s performance with others through an interactive tool on the ATO website.

“This measure may have slipped under the radar during the Your Future, Your Super debate, but its impact will be a game changer in superannuation. Empowering consumers with quality decision-making tools will level the playing field,” Super Consumers Australia director Xavier O’Halloran said. 

“Consumers can now rank funds by net investment returns or fees, which are two very important factors when choosing a fund. When the underperformance test results are finalised later in the year, some funds will also be highlighted as having failed to add enough value to people’s retirement savings.”