Senator Andrew Bragg has used Budget estimates to attack the superannuation guarantee (SG) increase for stagnant wage growth.
Bragg asked Dr Steven Kennedy, Secretary to the Australian Treasury, if that was the case based on Budget forecasts.
“The Grattan institute, Reserve Bank of Australia (RBA) and Retirement Income Review have all concluded the increases in the rate of super will all be paid for by slower wages growth – do you agree with that?” Bragg said.
“It looks to me, from the reading of these forecasts that the next couple of years the consumer price index (CPI) outstrips wages growth and we have a couple of years where CPI and wages growth are at level pegging.
“Then it looks like in 2024/25, wages growth goes just ahead of CPI – have the super increases been scheduled into these projections?”
Kennedy said the SG was legislated policy and the increase in the SG was reflected into Treasury’s wages forecast.
“Obviously, it’s still people’s earning but it goes into super and they lower the wages forecast,” Kennedy said.
Kennedy said the effect was that for every 1% increase in super would result in a 0.8% loss of wages, according to Treasury forecasts.
“That means a 0.5% increase in the SG means wages are less by about 0.4%,” Kennedy said.
Bragg asked if without the SG rise would there be positive wage growth to which Kennedy responded: “There would be small positives, yes”.