Labor shocked super increase comes out of workers’ pay

Has Labor been living under a rock? Because it seems to be in disbelief that many Australian workers will have their take home pay cut when the superannuation guarantee (SG) is lifted from 9.5% to 10% on 1 July:

  • “ANZ, Wesfarmers, Macquarie Group, Telstra, Goodman Group and Transurban are among the biggest companies relying on clauses that specify “total remuneration package” or “total package value” or “remuneration inclusive of superannuation” to avoid forking out an extra 0.5 per cent in superannuation to workers on individual agreements”.
  • “Many will see an immediate reduction to take-home pay to fund the super increase without increasing total remuneration”.
  • “Labor’s superannuation spokesman Stephen Jones said the clear intention of legislators – who introduced the Superannuation Guarantee under the Keating government in 1992 – was for superannuation to be funded by employers on top of ordinary wages”.
  • “It’s a pretty miserable way to treat your employees, most of whom will have been on a wage freeze for a long period of time,” Stephen Jones said.

How can Labor be surprised by this outcome?

The Henry Tax Review explicitly stated that lifting the superannuation guarantee (SG) comes at the expense of workers’ take home wages. Last year’s Retirement Income Review from the Australian Treasury noted the same, as has analysis from the Reserve Bank and the Grattan Institute. MB has noted similar for years. Heck, even the latest federal budget took the scheduled lift in the SG into account in producing its wage growth forecasts.

It has literally been stated over and over again across a wide range of sources over many years that there is a direct trade-off between the compulsory SG and wages.

The only ones that have denied reality are the industry super funds and Labor, both of whom have a vested interest in seeing the SG increase.

Unconventional Economist
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Comments

  1. The FNG.MEMBER

    They knew.
    Labor works for the super funds. They don’t care about us.
    Banana republic.
    Joke of a country.
    Pathetic.

  2. Anders Andersen

    I don’t recall MB stating that this would happen for the reasons it has. The argument was that super increases would replace pay increases so effectively no change to take home pay. This loop hole in some pay contracts was never mentioned.

    My take home pay will not change.

      • ashentegraMEMBER

        The labour movement is equally blind about Payroll Tax – which the innocents think comes out of corporate profits.

        In reality, it Is an income tax surcharge falling uniquely on PAYE taxpayers, while leaving rents, capital gains, interest and dividends untouched.

        Second or third most damaging and distorting tax in the government armoury.

  3. I’ve been on one of those “including super” packages for 24 years, so was always mystified why people thought they would be getting more.

    Even the original intent in 92 was that to substitute a pay rise, not something extra.
    The ABC rearvision podcast/radio show on super is a good listen/read.
    https://www.abc.net.au/radionational/programs/rearvision/superannuation-in-australia/4626038
    Quote from the transcript below.

    Peter Martin: The modern-day superannuation began as a compromise. It was like a quick fix. Paul Keating, he was Prime Minister at the time in 1992, had a problem. Wages were due to go right up, they were due to go up 3% that year, wage decisions were made centrally, and he wanted to restrain inflation. Of course he still wanted to give workers the wage rise, so he and Bill Kelty, the head of the Council of Trade Unions, came to a deal that employers will have to give the workers 3%, they just won’t be able to spend it. And so that was the deal, that all awards had to give employees 3% of their salary paid not as salary but into superannuation funds.

  4. Lord DudleyMEMBER

    Now that everybody knows that Labor’s commie super-plan will take money out of worker’s pockets, the only option is to vote for the Scotty Government with Dutton the enforcer looking out for everyone’s interests. The number of concentration camps being run by Australia will increase, but don’t worry, because all the people who go into them will be bad.

    And Scotty has your best interests at heart… after all, he was appointed by God, and he knows he’s doing God’s work. Such a divinely inspired fellow doing the Lord’s work can do no wrong…

    … aaah, who am I kidding. You’re cursed. You lot are so utterly f**ked you have no comprehension of what’s in store. You’re essentially a one-party state run by evangelical whack-jobs who believe that Jesus is coming back soon if you support Israel enough (aka Scotty), combined with a group of flat-out fascists (Dutton), with a gaggle of opportunistic hangers-on who’ll support any monstrosity if it benefits them (e.g. Hunt).

    Welcome to Hell.

  5. RobotSenseiMEMBER

    Oh Lordy, it’s half a percent.
    Ask yourself where the rest of your wage rise is. All the professional industries are going gangbusters. Why not yours?

  6. Correct me if i’m wrong but i don’t think those on the minimum wage work for the companies mentioned above ,
    .

  7. Yes, the same rock that Sir Ken Starmer has been under.
    Albos probably been giving him a reach around Matt Hancock style.

    • Thanks for the link. Haven’t looked into exactly what this is about but my guy feel is that if this is like sports rorts, voters aren’t going to care in enough quantities to make a difference.

  8. Knowing people who work on some of these companies, especially for workers in-demand, this effectively is a paycut compared to other jobs on the market now. Technically the “total package” clause moves the risk of government policy from employer to employee and is kind of against the spirit of the contract. I only care what I’m getting in pay; that’s what you pay me; that’s what I agree to. Taxes, super, and other expenses – they have nothing to do with me since they are levied on you. Putting it in the contract seems like it shouldn’t quite be legal.

    Know some employees on this contract and used to be on one – they try to convince you of the benefits of it internally but everyone knows its bad for you as an employee.

    In any case these jobs are now not worth as much in comparison to other jobs on the market. Most people discount “total package” salaries anyway since its more complicated for the employee to work out what they actually earn on them. Over time this will adjust itself out as people change jobs.

    • “Taxes, super, and other expenses – they have nothing to do with me since they are levied on you.”
      If they are levied on the basis of “your income” then they are levied on you, no matter who technically is paying it. It is just less obvious that it is on you if you don’t fork it out yourself.

  9. I’m on a total package gig, but my employer is eating the cost, so no change to take home pay.

  10. kiwikarynMEMBER

    You should be putting as much as possible into super, how else can you get enough to fund your own self managed super fund and use it to buy an investment property? Have you learned nothing from Reusa all these years?