The federal government should commit to lifting the Superannuation Guarantee to 12 per cent at a quicker pace than is now scheduled, the SMSF Association has argued.
The SG is a critical component in reducing Australians’ reliance on the public purse in retirement, especially for younger Australians who need to build their balance, outgoing chair Andrew Gale said.
The previous commitment to lift the SG to 12 per cent by 2019 has been replaced by a slower schedule of incremental increases, which would delay raising the guarantee to 12 per cent until 2025 if the current plan proceeds.
The SMSF Association reiterated its position that super savings should not be compromised to close budget holes.
“We disagree strongly with the Grattan Institute recommendation that the commitment to the 12 per cent SG contribution be scrapped,” Gale said. “Such a position would prioritise quick-fix short-term budget repairs over sound long-term retirement savings policy and improving gender equity in superannuation.”
The SMSFA also called out loopholes that allow employers to avoid their SG requirements.
“We also advocate for measures to be legislated that close loopholes allowing employers to reduce their employees’ SG contributions unfairly. This should be accompanied by giving employees free choice of superannuation fund for their SG contributions,” Gale explained.
A Professional Planner poll conducted last month found that most planners agree the increases to the SG rate should begin sooner. Half of the respondents said they think the incremental increases should begin immediately.