ISA says the move would cost the average couple $150,000 to $200,000 from their retirement and blasted it as a “short-sighted” hit on super that would leave more Australians “languishing” on the pension.
“These MPs are not only out of touch with the community but also with their leadership, who have said time and time again that they support the staged increases in people’s super that are locked in law,” said ISA chief executive Bernie Dean. “The Prime Minister and Treasurer wouldn’t want to risk a generation of Australian workers being dumped on the pension to be their lasting legacy; they know we would all pay for that through higher taxes.”
“Australians overwhelmingly support the rate going up slowly as the key to dignity in retirement, giving the average Australian worker choice and control on how they live their later years.”
ISA accused the MPs of using the “specious argument” that an increase to the super guarantee would come at the expense of wages and rebuked the claim, saying that there is no equal drop in wages when the super guarantee increases. The same argument was used to freeze the guarantee in 2014.
“The claim that because Australia is entering a recession that the [super guarantee] rate must be cut doesn’t hold water either, as there is evidence that following the 1991 recession the rebound in economic growth and employment coincided with an incremental but steady increase in the SG – like what is planned now,” ISA said in a statement.
Senator Jane Hume has already said that the legislated increase in the superannuation guarantee will go ahead on 1 July 2021 despite potentially sweeping industrial relations reforms under the government’s JobMaker scheme.
“It has always been the government’s intention to increase the superannuation guarantee, and we haven’t deviated from that intention or that message,” Ms Hume said. “That said, I would not be surprised if we get a lot of pushback when that goes ahead next year – particularly from the business community, who [understands] that there is a limited amount of money out there to pay employees, and when you increase the superannuation guarantee something has to give.”
Has this page just been removed from the News section (Home > News)? I wonder why!? No conflicts of interest IFA!? ROFL!
Another reader lost!
Page reinstalled to Home > News. Good to see.
Here’s an idea.
What about not only using the super balance as an offset to the outstanding mortgage balance as suggested by
“Anonymous” ,but also be able to salary sacrifice mortgage payments & super contributions ?
Mean while in Singapore …the majority of the workforce, total super contributions amount to 34.5% of total wages, of which 14.5% are made by the employer and 20% by the employee. Effective from July 2007, the employer contribution rate was increased by 1.5 percentage points. From the age of 50, contribution rates decrease to encourage the employment of older people.
“Would cost the average couple $150,000 to $200,000”
Has this estimate taken into account the offsetting effects of:
– interest not paid to the bank as a result of repaying mortgage several years sooner?
– associated savings in super admin fees, and less insurance needed?
– the opportunity cost of not dedicating adequate funds towards further education to prolong or improve one’s career and subsequent earnings?
– a higher super balance means which can result in less Age Pension for some individuals?
Personally, I think Liberal MP John Alexander’s suggestion that people should have the choice of using their super as an offset to their mortgage makes a lot of sense. This would reduce home loan interest payments and possibly encourage people to salary sacrifice earlier in their working life, resulting in an additional bulwark for our banking system. Excluding the super account from LVR and deposit calculations should mean it has little effect on house prices.
Don’t think ISA and many fund managers would be happy with that though.
I am no fan of the Industry Funds but they are on the money here….we should be looking to get the SGC up to 15% in the medium term as only then can we guarantee comfortable retirement for most Australians….plus we must stop the stupid early release schemes we have seen of late.
Typical self-serving and conflicted comments from ISA. Naturally they want the SGC to be increased a this will then see more funds flow into their coffers and increase the administration fees as most of these are percentage based.
I am sure the ISA would be happy to see more people put out of work in the current COVID19 environment if the SGC was to be increased. I must have missed seeing the ads for employers’ to buy a money tree to plant in the back yard to cover both an increase in SGC as well as giving employees a pay increase which is probably more needed now.
These people like the bureacrats in Canberra live on a different planet.
“ISA accused the MPs of using the “specious argument” that an increase to the super guarantee would come at the expense of wages”
Where do they think he money comes from, Santa Claus?
Methinks the Industry Funds dost protest too much.
Bernie Dean can see his union comrades screaming for the retention and compounding of FUM as this feeds the machine.
You only have to consider the recent appointment by CBUS of the CFMEU to monitor the employer super contributions of members to get a very clear picture of the level of union influence and power that exists within the industry super space.
“The Prime Minister and Treasurer wouldn’t want to risk a generation of Australian workers being dumped on the pension to be their lasting legacy; they know we would all pay for that through higher taxes.”….interesting observation!!
They are doing this currently by forcing many previously ”advised” clients to no longer be able to receive ongoing financial advice/guidance due to skyrocketing advisory operational costs/huge adviser exodus due to the FASEA et al increased compliance requirements.
They are ”digging” a social security financial hole for future generations to deal with.