We’ve been saying this for years.
The industry super funds want to make money for themselves and they have been consistently using arguments of it being “good for workers” to justify increasing their own returns.
The superannuation guarantee is set to rise from 9.5% to 10% in July, and then eventually to 12% in 2024. We said that now was not the time for such an increase and that it would reduce the amount of take-home pay for employees – money that people want and that they could spend in small businesses – and create extra costs for businesses and higher prices for consumers. The industry super funds and other advocates of the increase said that there was “no evidence for this”, no evidence at all.
Today an article in the Financial Review by Michael Roddan revealed that Industry Super’s own research paper – research that they had been hiding – showed that “in addition to lower wages, costs [of raising the SG] can also be borne by employers through a reduction in profits, by consumers through increases in prices, or via lower equilibrium employment.”
No evidence, they say - phonies. They have the evidence but decided to pretend the evidence didn’t exist. Is that the way to care for members and workers? Decreased spending capacity. Fewer jobs. Higher prices.
These findings didn’t need research – all they needed was a bit of logic and perhaps a calculator. But what good are numbers when you have ideology? It seems the people advocating for higher superannuation believe that all employers are evil and have infinite stashes of money that they’re withholding from their employees just for the fun of it.
Here is some more logic: 9.5% is a percentage. Unlike wages, it doesn’t need to rise to keep up with changes in the cost of living. As a person’s wage increases, so too does the amount of super they are paid. 9.5% of an annual wage of $60,000 is $5,700. Say the person gets a pay rise of 2%. 9.5% of an annual wage of $61,200 is $5,814. Oh look, the amount of super went up without changing the percentage at all.
The same article in the Financial Review also pointed to research from the Grattan Institute showing that the 9.5% rate in super would allow most people to have a retirement income of 91% of what they were earning before they retired. Which in most cases will be more than needed to live a good retirement.
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).
There are things we can do to reduce, for example, the cost of living that would financially benefit workers and businesses alike (e.g. reducing the cost of energy). Why don’t we address that? Or should we continue to hide the facts from the majority of Australians?