Has the ABC been living under a rock? Last night The Business reported 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:
Employment lawyers say if an employee’s contract says their super is included in their total package, it might be legal for their boss to take that money out of their base pay…
“There have been instances of this in the past, but I fear it’s becoming more prevalent for the simple reason that more and more employees are on the kind of contracts that allow it to happen” [Australia Institute’s chief economist Richard Denniss said]…
“But let’s be clear, if thousands of employers do this, that’s exactly why we don’t get wage growth in Australia”…
Unions are outraged, saying that for most employers, the cost of delivering the point-five per cent increase is less than $5 a week.
“It is absolutely shocking to me that employers would be trying at this point to try and avoid paying that small increase in superannuation,” says ACTU President Michele O’Neil.
Seriously, how can anybody be surprised by this result – least of all Richard Denniss and the ACTU?
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.