Super works for the economy
Governments are using the cover of COVID-19 to dismantle superannuation.
At the start of the crisis, the Federal Government announced it would allow workers to access their superannuation early to get them through the economic downturn.
This was before they begrudgingly agreed to a wage subsidy in JobKeeper.
Now, almost six months on, more than 2.5 million workers have raided their super to survive.
Nearly 500,000 workers have emptied their superannuation accounts to pay the bills. The Government excluded workers from JobKeeper, like casuals, university workers, and those working at companies like Dnata. They excluded international students and workers on visas from any form of Government assistance.
Workers now have $25 billion less in their super due to this scheme, and as such are more than $25 billion poorer.
The Government shifted the economic burden of the COVID-19 crisis to those hardest hit.
Those stood down and with no access to Government assistance were forced to raid their future and generation of workers has been set back in their retirement savings.
A 25-year-old worker who drained their superannuation could face $95,000 less by the time they retire. Not only does this mean that workers who we should be supporting are being told to bail themselves out, it means that the economic effects of COVID-19 will now last a generation.
But the Government is claiming this a huge success. Workers are ‘voting with their feet’ on compulsory superannuation. The Morrison Government is looking to use this scheme as evidence superannuation should be torn apart.
The super guarantee
Legislation was introduced by the Labor government in 2012 to incrementally increase the super guarantee (the percentage of a workers’ wage employers pay in superannuation).
The rate was scheduled to progressively rise to 12% in 2022 but was frozen by the Abbott Government in 2014 and has remained at 9.5%.
Under current legislation, on 1 July next year, your superannuation will automatically go from 9.5% to 10%. By 2025 it will reach 12% if the scheduled increases are not frozen by the Morrison Government.
This will add thousands of dollars to your super balance by retirement, making a huge difference to your quality of life.
The current threat
The Morrison Government is facing growing internal pressure from Coalition MPs and Senators to continue to delay or even ditch the scheduled increases altogether.
Over the coming months, you will hear Liberal politicians, economists and big business argue super will cost wages, jobs or both. Now is the time to reinforce super, not tear it down. It’s better for workers and the economy.