Reports that, in an eleventh hour move, the Morrison government will abandon its attack on the superannuation guarantee are welcome news for workers.
Super is set to increase to 10% in July, with the rise to be formally confirmed in the 11 May federal budget.
The news comes after many months of heated opposition to the government’s plan to freeze or abandon super increases altogether.
Sadly, the government maintains an attack on a lot of other super matters.
Successive coalition governments had already delayed super increases for more than six years in a blatant attempt to supress workers’ retirement income.
Super war tests workers’ patience
A minimum super rate of 12% is broadly seen as essential to providing secure retirements for Australian workers.
If the government had stood by previous legislation, super would have reached 12% back in 2019.
Ongoing delays to reaching 12% super are only testing the patience of the majority of Australians who view the issue as settled – 75% support it.
Most workers accept that a strong super system is central to minimising pension reliance and providing retirees with a standard of living that is comparable to that of their working years.
Without 12% super, future age pension costs will increase to 4.6% of GDP compared to 2.6% GDP today, according to the Australian Institute of Superannuation Trustees (AIST).
Ideological attacks fuelling super uncertainty
Tenuous arguments from government members that the increase to 12% super is unaffordable or that it comes at the expense of wages growth have long been used in an attempt to suppress increases, despite these arguments being easily dismissed.
Ideological government attacks on super have also been evident during the COVID-19 pandemic where workers were encouraged to use their super to get by (with essentially no checks in place to ensure withdrawals were needs-based).
As a result, 600,000 workers aged under 35 drained their super balances to zero and will likely face future hardship as a result.
And while the fight over the minimum super rate is seemingly resolved, issues remain with the government’s Your Future, Your Super reforms that are currently before parliament.
The Australian Council of Trade Unions has called the legislation “fatally flawed”.
Time for the super system we worked for and waited for
IEU-QNT Branch Secretary Terry Burke said the Australian super system remained – at its heart – an enduring victory for workers.
“The super system exists because of workers and for workers,” Mr Burke said.
“This is a system that is a world leader and one that we must, not only protect, but enhance.
“While we welcome the news that this year’s increase is going ahead, it’s time for the government to keep its full promise to the generation of workers who’ve won, worked for and waited for 12% super.”
Read more about this issue via the superannuation tag on our website.