This is a condensed version of an opinion piece that our CEO wrote for the Australian in response to the debate over whether the planned increase in superannuation from 9.5% to 12% should go ahead.
Some people believe it is still January 2020 and we aren't in the biggest crisis we have seen in our life times.
Some people believe we can manage the future by consulting the entrails of economics textbooks.
Some people don't get that a rise in superannuation is a pay rise; it is money that the employer needs to find to include in a person’s salary package.
Then it gets worse: the employee, the worker, will not see that pay rise until they retire. It won't be money that can be circulated in the economy right now, money that consumers can use in small business.
Small business people don't use ideology to work out how many people they can afford to employ; they use a spreadsheet or a calculator. Many businesses already have huge cuts in turnover and many are presently not profitable. They will not be able to find the additional funds for the superannuation rise. The choices are obvious for small business people: cut profit (if there is any), cut the hours of workers and/or retrench workers, close the business, or give up and go onto JobSeeker.
We have said this in a media release before and we will say it again:
We know superannuation is a good thing and in Australia we’re fortunate that it’s compulsory. As human beings we all deserve to have a decent retirement, and a certain amount of compulsory super is also good for the economy in the long-run – it’s money that doesn’t come from taxpayers that retirees can spend in small businesses (or wherever they choose). It just doesn't need to increase right now, in a time of crisis.
The question is, is it better to have fewer people employed but on 12 per cent superannuation with more people unemployed; or more people employed on 9.5 per cent superannuation with fewer people unemployed?