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Is the Coalition gearing up to slash SG?
Unions have hit back at reports the Coalition is planning to reduce the superannuation guarantee if it wins the next election.
With an election due in a few months’ time, reports have suggested Coalition MPs are pressuring Peter Dutton to commit to major superannuation reform.
According to The Australian, a number of backbenchers are supporting the reduction of the superannuation guarantee to 9 per cent from the current 11.5 per cent.
In a statement on Thursday morning, the Australian Council of Trade Unions (ACTU) slammed the Coalition members allegedly backing the radical change, accusing them of attempting to “undermine the hard-won entitlements of Australian workers”.
The ACTU named the backbenchers in question as Alex Antic, Matt Canavan, and Llew O’Brien.
“The Coalition members suggesting a reduction in the superannuation guarantee are very happy to continue to receive 15.4 per cent superannuation for their own retirements. The Coalition’s hypocrisy is unbelievable – they want to enjoy the benefits of super for themselves while robbing working people of it,” ACTU assistant secretary Joseph Mitchel, said.
“The last time the Coalition were in power, they froze super and forced people to raid their super to get by in a pandemic. Now, they’re talking about cutting super and getting workers to raid what’s left for more expensive houses.
“It’s clear that working people’s wages and retirement savings are at risk under Peter Dutton.”
This is not the first time the Coalition has been accused of plotting significant changes to superannuation.
Namely, in October last year, shadow treasurer Angus Taylor was accused of suggesting the Coalition plans to dismantle Australia’s compulsory super system to align it with global retirement schemes, particularly the US 401(k) model – a voluntary framework that has stirred controversy.
In a speech at Sydney University at the time, Taylor said: “The Coalition has started by aligning superannuation with other global retirement schemes –like 401k – that allow withdrawals for the purpose of purchasing a first home.”
However, while the ACTU at the time decried Taylor’s remarks, it overlooked the context – Taylor was discussing home ownership and reiterating the Coalition’s previously unveiled policy to ease access to housing by replicating the 401(k) model, which permits withdrawals for first home purchases.
Speaking to Super Review sister brand InvestorDaily at the time, Association of Superannuation Funds of Australia (ASFA) CEO Mary Delahunty said Taylor’s sentence was clearly taken out of context.
“The full sentence makes it clear that that reference to the substandard American system is drawing a comparison to the Coalition’s policy on early access,” Delahunty said. “Broadly, it’s not Coalition policy.”
Delahunty said that conversations ASFA has had with the Coalition revealed its awareness of the superannuation system’s role in Australia’s economic stability.
“They know that we provide a pool of capital that supports infrastructure. They know we provide a pool of capital that supports business growth and that we reduce the pressure on the public pension,” she said.
“The shadow treasurer knows that to materially undermine the system that was just ranked sixth in the world, would be pretty detrimental to his budget if he was to be Treasurer and the nation’s financial resilience.
“Presumably that is why it is not their policy. I don’t think they are really suggesting it in a broad sense.”
While Taylor’s comment on 401(k)s may have been taken out of context, Coalition members have previously argued for a more flexible superannuation system that enables Australians to make voluntary contributions based on their individual financial circumstances.
Senator Andrew Bragg has been the most vocal proponent of this idea, advocating a voluntary superannuation system in public and in his book, titled Bad Egg: How to Fix Super.
The 401(k) model in the US is a voluntary, employer-sponsored retirement savings plan that allows employees to choose whether to participate, set their contribution rates, and benefit from tax advantages and potential employer-matching contributions.
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Maja Garaca Djurdjevic
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