The superannuation guarantee (SG) is legislated for 1 July but is the opposite of what the government is doing in terms of lowering costs to businesses to employ more people and to encourage wage rises, according to Minister for Superannuation, Financial Services, and the Digital Economy, Jane Hume.
Speaking at a media event on Thursday, Hume was asked whether the SG rise was going ahead to which Hume replied with “the superannuation guarantee rise is legislated for 1 July”.
“But the debate we’re having now is about what that trade-off for that is. Dozens and dozens of economist have said it, Grattan has said it, everybody said it, except flat earthers was what Josh Frydenberg said, that there is a trade-off between wage rise and SG,” she said.
“The SG is a cost to employment and if I’m an employer and I give a rise to the SG it’s going to be passed on to employees one way shape or form. They know that somewhere between 80% to 100% is going to be passed on so deny that is sticking your head in the sand quite frankly.
“There are always impacts on superannuation and that’s always been the case even in 1992 when the system was first conceived and one of the rationales for super was to try and avoid a 3% inflationary wage rise. So, this has been the case for forever more and to deny that is silly. But understand that it is a tough decision.
“Everything this government does is about trying to lower the cost to business to employ more people and to encourage wage rises. This legislation is already there and it does the opposite of that. It puts us in an awkward position because it’s already there.”
When asked whether she made a mistake allow the second tranche of the early access to super to go ahead as many super members had drained their accounts, Hume said the most common request she had was to have a third tranche and that the scheme was a lifeline to many people.
However, when asked whether there would be another measure to benefit those who used the scheme to put back money into their accounts, Hume said there were already measures to do so such as the $25,000 concessional cap and catch-up contributions.