Superannuation reform is again at the forefront of political debate this week, with calls to raise contributions and do away with them all together ringing out simultaneously.
The compulsory superannuation guarantee is set to rise from 9.5 per cent in five annual increases starting from July 2021, taking it to 12 per cent from 1 July 2027.
However, there is some talk among Liberals as to whether the guarantee should be frozen, and last year Finance Minister Mathias Cormann ruled out bringing forward the current timetable.
First-term Liberal-National senator Gerard Rennick has vowed to agitate within the coalition government to make super voluntary.
“Of all the rorts that exist in this country, nothing compares to superannuation,” he told parliament on Tuesday.
“Superannuation is devouring the real economy.”
Senator Rennick launched his scathing attack on super during debate on legislation to give a one-off amnesty to bosses failing to pay workers their full guaranteed entitlement.
“At the end of the day, super isn’t working,” Senator Rennick said.
Labor frontbencher Jenny McAllister said the amnesty was outrageous and sent the message to employers that wage theft was acceptable.
“If you’re an employee and you steal from your employer, you’ll have the book thrown at you,” she said.
“If you’re an employer and you want to steal from an employee, no worries, as long as you say sorry.”
She said while there was an estimated $2.8 billion in super underpayments in the past 26 years, no evidence of widespread overpayments had emerged.
At state level, the Andrews Government in Victoria has called for an immediate rise to 12 per cent and set out a plan for an eventual rise to 15 per cent.
In its submission to the federal government inquiry into retirement incomes, the Andrews government also made a number of recommendations aimed at making sure women enjoy the same financial security in retirement as men.
Treasurer Tim Pallas said women are currently penalised for taking time out of the workforce to have children, as they do not earn super on the Commonwealth’s paid parental leave scheme.
He said the average woman’s superannuation balance at the time of retirement in the 2015/16 financial year was $157,050, compared with $270,710 for men – a “superannuation gap” of 42 per cent.
“The superannuation system is outdated – and it needs refreshing to stamp out the discrimination that some Victorians face,” Mr Pallas said in a statement on Wednesday.
The submission also suggests carers on Commonwealth payments be paid super contributions and for the $450 monthly earnings threshold to be scrapped as it “disadvantages part-time or casual workers who work more than one job”.Do you have an idea for a story?
Email [email protected]