Government pushed on SG rise amid ‘grim forecast’ for wages
Scrapping the super guarantee increase will fail to result in higher wages and is likely to result in reduced retirement savings, says a union body.
Following comments by Scott Morrison in a press conference last week that the government will be “carefully considering” whether to proceed with the increase in the superannuation guarantee (SG) in light of the impact of COVID-19, the Australian Council of Trade Unions (ACTU) has warned that delaying the SG increase will result in less retirement savings.
The SG rate is scheduled to increase from 9.5 per cent to 12 per cent by 2025.
“Cutting the super guarantee won’t result in higher wages, it’ll just result in less retirement savings. We know this because it’s already happened,” ACTU said.
“Since the government last delayed the increase in super from 9.5 per cent to 12 per cent on the promise of higher wages, we have seen record-low wage growth. Even before the pandemic hit, our wage growth was anaemic, growing at less than 0.5 [of a percentage point] each year in real terms since the super freeze started.”
ACTU said employers have already indicated that they have no plans for wage increases.
“The same grim forecasts on wages are being made by the Reserve Bank and the Treasury,” it said.
“Those in the public sector have been told that governments plan wage freezes in the coming months and years. Those in the private sector are barely holding onto their jobs, let alone seeing their employers talk about wage rises.”
ACTU president Michele O’Neil said that delaying the super increase won’t result in workers receiving higher wages, but will result in workers having less to live on in retirement.
“This is asking working people to believe in the same fantasy that Tony Abbott used the last time this government stopped workers getting their super increase. It was false then and it’s false now. There is no evidence that employers will pass on 1 cent of unpaid super to workers in wages.”
Ms O’Neil said Australians will lose more than $14.1 billion in super a year if the increase is cut, with the average person losing around $1,630 in savings a year.
“Australians are focused on how we get through this pandemic. As the government prepares its October budget, that’s where it’s focus should be, too, not stripping back people’s future retirement,” she said.
