The government intends to freeze the increase in the SG from 1 July 2014, with it currently due to increase to 9.5 per cent. The SG will remain at this level until 30 June 2018 and will then increase by 0.5 per cent each year until it reaches 12 per cent in 2022/2023.
“While the pause in the increase was not unexpected, as it was previously announced, we are pleased that the pause will apply at 9.5 per cent rather than 9.25 per cent,” said the Association of Superannuation Funds of Australia (ASFA).
“ASFA’s view is that the original timetable for phased increases should be maintained. This view is overwhelmingly supported by the community.
“Increasing the SG is a crucial part of ensuring people save enough of their income to help fund the lifestyle they expect in retirement. We urgently ask the government to reconsider this decision and proceed with the planned, phased increases to the superannuation guarantee.”
Australian Institute of Superannuation Trustees chief executive Tom Garcia said the organisation was “disappointed and concerned” the SG rate would be frozen for four years.
“We are very disappointed that the government has decided to push out the 12 per cent timeline further than originally planned. This will only make it harder for people to build up their super savings and have a dignified retirement,” Mr Garcia said.
AIST has called for the government to give an “absolute commitment” there will be no further changes to the schedule.
I’m sure many small businesses will welcome the freeze. Increases to SG cannot just be passed on to consumers, so are an extra cost for business owners.