The Government has been called on to reaffirm its commitment to increasing the superannuation guarantee to 12 per cent after the Minister for Revenue and Financial Services, Kelly O’Dwyer was viewed as leaving the issue hanging while addressing a Sydney banking and wealth summit.
Industry superannuation funds group, the Australian Institute of Superannuation Trustees (AIST) sought a reassurance from the Government with its chief executive, Eva Scheerlinck stating it was worrying that the Government appeared to be backing away from its legislated time-table for increasing the SG from its current 9.5 per cent to 12 per cent.
Scheerlinck noted that the current timetable for the SG increases represented a significant delay of several years on previous timetables supported by former Labor Governments.
“Leaving the super rate at 9.5 per cent would not deliver an adequate retirement income for most working Australians,” she said. “Lifting super to 12 per cent addresses the challenges of Australians living longer in retirement and ensures that our retirement income system is sustainable in the face of a rapidly ageing population.”
In her speech to the Sydney summit, O’Dwyer pointed to the self-interest of the superannuation industry claiming the industry was often very quick to point out that the only way that people could achieve higher incomes in retirement was by compelling an ever-increasing amount of wages to be sacrificed into superannuation.
“But they would say that wouldn’t they?” the minister said. “The increase of 9.5 per cent to 12 per cent will mean around $10 billion a year more flowing into the industry in 2025-26. Which, of course, means a bonus of hundreds of millions of dollars in fees each year for the industry and ever-increasing salaries for industry professionals.”
“And that is before you take into account all that additional money sloshing around for other cultural practices that have built up along the way,” O’Dwyer said.