logo
Receive the latest mybusiness news
SUBSCRIBE TO OUR NEWSLETTER
Copyright © 2020 MOMENTUMMEDIA

Fast-tracked increase to SG raises concerns

Jotham Lian
Jotham Lian
08 May 2019 1 minute readShare

Concerns have been raised over plans to fast-track compulsory superannuation contributions to 12 per cent by 2025, with experts fearing the impact on both workers’ wages and business affordability.

Labor has promised to increase compulsory superannuation contributions from 9.5 per cent to 12 per cent by 2025, a move supported by the Coalition government.

Last week, the Grattan Institute said that such a move would cause an extra $20 billion to be stripped from workers’ wages each year.

Advertisement
Advertisement

Speaking to My Business sister publication Accountants Daily, CPA head of external affairs Paul Drum (pictured) acknowledged that there was a need to increase compulsory superannuation contributions, but the timing and speed of the increase was not viable in the current economic climate.

“There’s nothing magical about the 9.5 per cent number — we know that all adequacy test says that’s not going to provide people with enough retirement savings,” Mr Drum said.

 

“Our issue is whether this fast-tracking of SG to 12 per cent has been thought through properly because, if you take money out of people’s wallets today, consumption and investment suffer, and we’ve just had a zero inflation quarter — unprecedented in my working lifetime.

“We know that retail sales are down, we know that the property market has come off the boil quite significantly depending with town or region you are in, we’ve got low wage growth, low business confidence, and cost of living pressures.”

He continued: “Just because you force super up from 9.5 per cent to 12 per cent doesn’t mean they get a pay rise, it is taken out of what they get now. It doesn’t equate to a pay rise for everyone; in most cases, it will be taken from your current package.”

Further, Mr Drum said any increase that has to be borne by a business will place more pressure on owners who are struggling to keep their business afloat.

SPONSORED CONTENT

 

“While it is politically appealing in some quarters, it could be detrimental to economic growth, and conversely, if it does equate to a forced pay rise, over and above what a worker’s wage is now, who pays? Therefore, is it anti-jobs?” he said.

“These are concerns we are hearing from small business — who will pay if it is not already part of the package, because they can’t afford it.”

This email address is being protected from spambots. You need JavaScript enabled to view it.

Fast-tracked increase to SG raises concerns
mybusiness logo
Jotham Lian
Jotham Lian

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at [email protected]

Leave a Comment

Latest poll

Which of the following stimulus measures has had the greatest impact on your business?