Compulsory super not likely to reach 12 per cent under Coalition   :(

Canberra Times
April 11 2018

It's unlikely that compulsory superannuation under a Coalition government will ever rise to the 12 per cent of wages that Labor, the unions and the financial services industry want.   :(

The minister for financial services, Kelly O’Dwyer, gave a speech last week that just may be an indication  the government is thinking about pushing out further the date at which compulsory super, known as the superannuation guarantee (SG), reaches 12 per cent.

The Coalition has already delayed the scheduled increases to the SG that were put in place when Labor was last in government.   :(

O'Dwyer said a higher SG comes at the expense of future wage rises and would particularly hurt low wage earners, at a time when wages growth is very low.

The SG has been at 9.5 per cent since mid-2014. The next scheduled half-a-percent increase is due in mid-2021, and will then rise by half-a-percentage point each financial year until it hits 12 per cent in mid-2025.

Another reason the Coalition just may have something to say about the increase in the SG in the Budget next month is that, for the first time, the costs of the scheduled increase will be included the four-year forward estimates.

The trade-off for giving-up a part of wage rises and locking the money away until retirement is that the money is taxed very lightly on the way into super and when it is inside super.

And most people pay no tax on their super when in retirement, at least up to the first $1.6 million per person.

For middle and high earners any trade-off between wage rises and future retirement savings, which will vary between occupations and sectors, will likely be worthwhile.

It's not only the tax breaks, but also the powerful effects of compounding of investment returns over several decades that makes the positives of compulsory super outweigh any loss of income for most workers.

O’Dywer questioned whether lower-paid workers benefit from higher compulsory super.

Brendan Coates, a fellow at the Grattan institute, says increasing the SG to 12 per cent will hurt the living standards of low-income earners, the majority of whom are women.

Saul Eslake, independent economist and vice-chancellor's fellow at the University of Tasmania, says those on low incomes are never going to be save very much for their retirement, even if the SG is 12 per cent.

If someone is on relatively low wages for his or her life, they may end up with $40,000 or $50,000 at retirement and while they could put that money to good use by paying off the mortgage, for example, there are still going to be on the full age pension, Eslake says.

Labor is reportably looking at the possiblity of applying the SG to the taxpayer-funded paid parental leave and perhaps shortening the time the SG takes to reach 12 per cent.

Super as a percentage is a shot duck without pay rises anyway.... and in a climate of part-time casual the chances for the many are growing smaller by the day to develop a fine nest egg in retirement.

This entire retirement packaging Scheme needs to be brought under control under one roof with the same standards for all.. out of the hands of government and corporate pirates.

Nor is a payrise , the only thing going up is the cost of living

Yes and what about the weekend and public holiday penalty rates?.   :(

whiteknight wrote on Apr 11^th, 2018 at 5:17pm:

Yes and what about the weekend and public holiday penalty rates?.   :(

In mining industry they didn't just cut them , they removed them all together in favour of flat rate

Sir Grappler Truth Teller OAM wrote on Apr 11^th, 2018 at 4:09pm:

Super as a percentage is a shot duck without pay rises anyway.... and in a climate of part-time casual the chances for the many are growing smaller by the day to develop a fine nest egg in retirement. This entire retirement packaging Scheme needs to be brought under control under one roof with the same standards for all.. out of the hands of government and corporate pirates.

Exactly right. The self regulation system just doesn't work with employers continually robbing their workers blind. We need an independant body to oversee superannuation and make sure payments are made. Under this pack of incompetent wanks the system is falling down.

Oh surprise that Labor and their controlling union grubs want to smack the employer some more.

About time people were made to save for their own future, with their own money.

How about a 3% compulsory contribution by employees.

Household savings 2013 10%
Now 3%

Its time wrote on Apr 12^th, 2018 at 8:14am:

Household savings 2013 10% Now 3%

Save more lazy people!

Negative wage growth, cost of living rocketing up

Abject failures these libtards

HooYAY its FriYAY wrote on Apr 12^th, 2018 at 8:01am:

Oh surprise that Labor and their controlling union grubs want to smack the employer some more. About time people were made to save for their own future, with their own money. How about a 3% compulsory contribution by employees.

Sounds similar to the scheme I had 20 years ago except I was paying 5%. Gee, I wonder what happened to that scheme.......... oh I remember now, the libbos got rid of it. :D :D :D :D :D

whiteknight wrote on Apr 11^th, 2018 at 3:12pm:

Compulsory super not likely to reach 12 per cent under Coalition   :( Canberra Times April 11 2018 It's unlikely that compulsory superannuation under a Coalition government will ever rise to the 12 per cent of wages that Labor, the unions and the financial services industry want.   :( The minister for financial services, Kelly O’Dwyer, gave a speech last week that just may be an indication  the government is thinking about pushing out further the date at which compulsory super, known as the superannuation guarantee (SG), reaches 12 per cent. The Coalition has already delayed the scheduled increases to the SG that were put in place when Labor was last in government.   :( O'Dwyer said a higher SG comes at the expense of future wage rises and would particularly hurt low wage earners, at a time when wages growth is very low. The SG has been at 9.5 per cent since mid-2014. The next scheduled half-a-percent increase is due in mid-2021, and will then rise by half-a-percentage point each financial year until it hits 12 per cent in mid-2025. Another reason the Coalition just may have something to say about the increase in the SG in the Budget next month is that, for the first time, the costs of the scheduled increase will be included the four-year forward estimates. The trade-off for giving-up a part of wage rises and locking the money away until retirement is that the money is taxed very lightly on the way into super and when it is inside super. And most people pay no tax on their super when in retirement, at least up to the first $1.6 million per person. For middle and high earners any trade-off between wage rises and future retirement savings, which will vary between occupations and sectors, will likely be worthwhile. It's not only the tax breaks, but also the powerful effects of compounding of investment returns over several decades that makes the positives of compulsory super outweigh any loss of income for most workers. O’Dywer questioned whether lower-paid workers benefit from higher compulsory super. Brendan Coates, a fellow at the Grattan institute, says increasing the SG to 12 per cent will hurt the living standards of low-income earners, the majority of whom are women. Saul Eslake, independent economist and vice-chancellor's fellow at the University of Tasmania, says those on low incomes are never going to be save very much for their retirement, even if the SG is 12 per cent. If someone is on relatively low wages for his or her life, they may end up with $40,000 or $50,000 at retirement and while they could put that money to good use by paying off the mortgage, for example, there are still going to be on the full age pension, Eslake says. Labor is reportably looking at the possiblity of applying the SG to the taxpayer-funded paid parental leave and perhaps shortening the time the SG takes to reach 12 per cent.

The first paragraph of the article is very interesting, implying that the compulsory super will never rise to 12% under the Lineral government:
very odd that Labor, the Unions and the Financial service industry, shoud agree on this.
The financial service industry collects more than 10 billion in fees every year; the Union top brass also beneftis handsomely by sitting on boards if Industry super funds, and Labor has its own agenda, which is not to look after the interests of the common people.
As I stated many times, the compulsory super is just set up for the elite 20% of the population and should be scrapped; introduce a Universal age pension and scrap all tax concessions for super.

HooYAY its FriYAY wrote on Apr 12^th, 2018 at 8:01am:

Oh surprise that Labor and their controlling union grubs want to smack the employer some more. About time people were made to save for their own future, with their own money. How about a 3% compulsory contribution by employees.

It gets traded by lower wage rise.  Like when it first introduced.  Obviously someone doens't think.

Some employers pay a lot more than what's  compulsory. Next time at the eterprise barganing ask for more super.

Frank wrote on Apr 12^th, 2018 at 6:16pm:

Some employers pay a lot more than what's  compulsory. Next time at the eterprise barganing ask for more super.

That can work, as long as the law is changed first to strengthen employers' compliance with compulsory superannuation payments. The current laws are a joke.

Quote:

Compulsory super not likely to reach 12 per cent under Coalition

Geez, and it took 30 years to work that out?

All one has to do is look at the number of times the Coalition has allowed the contribution to increase: a big fat zero. Not once in 30 years.

Mine is 15%
I negotiated a deal

And I add another 15%
Yeah I pay tax, but my super looks.......super