Members who withdrew their super will never recover the impact: Combet

If the superannuation guarantee does not go ahead, there will be no increase in super, no wage increase, and people will miss out on hundreds of thousands of dollars in retirement, according to Greg Combet.

Speaking on a panel at the Association of Superannuation Funds of Australia (ASFA) conference, IFM Investors and Industry Super Australia chair, Combet, said it was an “oddity” that the Liberal Party did not support private savings when this had been their philosophy for a long time.

“One the wages and super and the trade off, of course the economic theory and research indicates there’s some trade-off between the two. When super was introduced it was done on the trade-off at a different economic period, higher inflation, better wages growth and was an attempt also to defer some wages growth to compulsory system,” he said.

“I’m not denying there is a trade-off between these two things but what I object to is the only thing on the table is to stop the 2.5% super guarantee increase with no guarantee of anything.

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“If the SG guarantee does not go ahead there will be no increase in super, missing out on hundreds of thousands of dollars in retirement, and no wage increase. There won’t be a trade-off for a senior exec in a financial services firm but if you’re a hotel cleaner on minimum wages they suffer the most as they miss out on increase in super and wage increase under proposition put forward.”

Combet noted that he did not support the early release of superannuation scheme by the Government as three million people withdrew money from their super and they would never recover the impact from the withdrawal.

“What the Government in reality did was make a very large part of the COVID-19 economic stimulus package privatised through people’s personal savings when I think that’s a responsibility of Government. There’s not much super funds can do about it now and hundreds of thousands of young people, in particular, have completely emptied their accounts,” he said.

“People in the super sector have to be very firm to say that preservation is a fundamental pillar of the super system and we don’t want to see early release like this again or 1,000 flowers bloom about how you can use this tax advantage form of savings to pay for a housing deposit, medical bills, renovation, or an overseas trip. Everyone has an idea of how to use this.”