Australians overwhelmingly want the superannuation guarantee (SG) lifted to 12 per cent, according to polling carried out exclusively for the Australian Institute of Superannuation Trustees.
Just 10 per cent of respondents said they somewhat or strongly disagree with raising the SG.
The results reflect strong support of AIST’s campaign urging the government not to renege on the legislated timeline which will see the SG rise to 12 per cent by 2025. This rise is fundamental to reaching the goal of allowing all Australians to look forward to a dignified retirement, regardless of their gender or income levels.
The poll results also show that Australians support the superannuation system more broadly. More than seven in ten people agreeing superannuation provides benefits to Australian society through playing an important part of the Australian economy, which also allows them to plan for their retirement without relying on the aged pension.
Conducted by Essential at the end of August, the poll surveyed attitudes towards superannuation in general.
The legislated increase of the SG to 12 per cent has been criticised recently, including by some Coalition MPs who want the current freeze at 9.5 per cent to remain in place.
Arguments against a 12 per cent SG rise are based on modelling by the Grattan Institute which has been questioned by leading actuaries, including Mercer and Rice Warner.
These groups have independently argued that some of Grattan’s assumptions are unrealistic for the average worker and also noted that the next generation will face the effects of a changing workforce, reduced home ownership and financial implications associated with an ageing population
The argument put forward by Coalition MPs that an increased SG would cost workers a wage increase of 2.5 per cent has also been disputed.
According to a report released by the McKell Institute earlier this month, there is no clear evidence that increasing the SG directly lowers wages. The McKell analysis found that the claim that a one percentage point increase in the SG would lead to a one percentage point reduction in wage growth was inconsistent with available data.
McKell concludes that that cancelling the SG increase would only harm workers’ overall wealth and income.
As most workers would only be too well aware, wages have been stagnant for some time. With no mechanism to guarantee workers a wage rise in place of an SG rise, it’s a lose/lose for workers. In fact, lifting the SG rate would benefit ordinary wage earners in the form of 2.5 per cent invested in super that they may otherwise not receive at all.
Despite this reality, those arguing against an SG rise insist Australians would rather have money in their pockets now instead of in the future. The evidence of our poll, however, puts paid to that argument. Only three out ten respondents agreed that they would rather have more money now rather than in their super for retirement.
What our poll illustrates is that most Australians understand what critics do not – that lifting the SG is fundamental to better outcomes for retirees. Australians are living longer in retirement and potentially facing more insecure work. A SG frozen at 9.5 per cent will not provide low-income earners, part-time workers and those who’ve taken time out of the workforce to be carers, many of whom are women, with a decent living standard in retirement. It just isn’t enough for hard working Australians to retire on.
Superannuation is a long-term investment that should not be subject to short-term political whims. The timetable to 12 per cent is gradual and it’s been in place since 2012 – businesses have had time to prepare, and an estimated 25 per cent of employers already recognise it as a good policy and pay their workers higher than 9.5 per cent. Two million workers already get 12 per cent.
The very federal politicians who have called for a 9.5 per cent freeze get 15.4 per cent super. It’s time to level the playing field and recognise that all workers deserve dignity in retirement.