In a speech at the National Press Club, Treasurer Josh Frydenberg echoed the findings of the Retirement Income Review (RIR) and said that 9.5 per cent superannuation was enough to provide an adequate standard of living in retirement.
“This is why, as the Prime Minister and I have said, we must rightfully and carefully consider the implications of the legislated increase to the superannuation guarantee before the 1st of July this year. This is even more important as we are in a time when our economy is recovering from the largest economic shock since the Great Depression,” Mr Frydenberg said.
The RIR found that there is a trade-off between wages and superannuation, with a median earner approximately $32,000 worse off over the course of their working life.
While the Morrison government has so far shied away from using the findings to freeze the increase, Mr Frydenberg said that he would “remain sceptical of those who, in the pursuit of their own interest, seek to restrict the legitimate choices Australians should have to save for their retirement”.
“It is simply not true, as some would have us believe, that there is not a limit to how high the superannuation guarantee can be increased in the name of delivering even higher retirement incomes,” Mr Frydenberg said.
“For some, there isn’t a problem that cannot be solved through higher rates of contribution to superannuation. These myths do not help Australians plan for retirement, or feel more confident and more secure in their retirement.”
Mr Frydenberg also called on funds to create new products and guidance that would allow retirees to spend their super more effectively, noting that many passed away without spending the full amount.
“This is despite the fact that retirees today have not benefited from the superannuation system their whole working life. The review shows that, if nothing changes, by 2060 one in every three dollars paid out of superannuation will be as part of a bequest,” Mr Frydenberg said.
We employ 25. We have done our best to keep them all employed, despite loss of revenue due to Covid. If the SGC increases go ahead, I no longer have a choice and will need to make one redundant, just so I will have the cash flow to pay SGC quarterly.
A lot of concessions have had to be made because of Covid. Raising business costs now is shortsighted. One day perhaps, not now.