A new report shows that the legislated increase to 12 per cent will come at a small cost to jobs and wages before driving a $12 billion expansion to the economy in the medium- to long-term – something researcher ACIL Allen believes will “lead to more jobs, higher real wages, and higher real incomes for Australians than will occur without the increase in the SG rate”.
“What the modelling demonstrates is that there is a small, short-term dip in average wage rises, but by 2025 real wages start to increase … To put that in perspective, the impact on wage rises for average wage levels in that period to 2025 when there is a dip is 30 cents a week, and I reckon we can handle it,” Industry Super chairman Greg Combet said at the launch of the report, adding that superannuation should not be used to solve unrelated policy issues.
“It’s not a piggybank you dig into every five minutes. That’s the craziness of a lot of the things you hear coming from some of the backbenchers in the Coalition. If there is concern about wages – and I’m concerned about it – there have been productivity improvements of substance over the last decade and workers have not shared in them. We need to address that.”
The Morrison government has largely prosecuted its campaign against the legislated increase on the basis – supported by the Retirement Income Review (RIR) – that wages growth would suffer at a time when the Australian economy has only just begun to bounce back from the COVID-19 recession. But Mr Combet believes that the RIR is based on “heroically unrealistic assumptions”.
“One of them is that everybody, including women, work uninterrupted for 40 years while saving at that level … no, it’s not enough, but the really big thing that’s going to be a political hot potato for the government if they want to argue ‘efficiency’: what the ‘efficiency and flexibility’ means is selling your home,” he said.
Mr Combet was joined in conversation by former prime minister Malcolm Turnbull, who tamped down on calls from his former colleagues on the backbench – including MP Tim Wilson – to use superannuation for housing.
“There are some other really poor arguments being advanced – some of these arguments are being advanced by former colleagues of mine for whom I have respect and affection, but that doesn’t mean they’re always right,” Mr Turnbull said.
“The proposition that super contributions should either not be increased or be able to be accessed to put into the housing market is surely one of the craziest ideas out there. I resisted efforts to do this when I was prime minister.”
Ahh the Industry Funds. Where there’s no conflict, there’s no interest.