Australian Institute of Superannuation Trustees CEO Eva Scheerlink has hit back at proposals from Liberal backbenchers to remove low income earners from mandatory super and cancel the planned increase of the Superannuation Guarantee to 12%.
In a statement, Scheerlink said "every Australian deserves to be financially secure in their retirement," hence the universality of the super system. She added that the calls to remove low income earners from compulsory super "have nothing to do with helping the less well-off and everything to do with saving the Government money."
She explained: "Well-paid Coalition MPs who receive super contributions of at least 15.4 per cent need to step out of their bubble and ask people what it is like to live on the Age Pension without any extra savings."
"The current debate and uncertainty surrounding the legislated timetable for increasing the Superannuation Guarantee rate is unhelpful for Australians trying to make retirement plans," she continued, "and only serves to undermine confidence in a superannuation system that is routinely rated as one of the best pension systems in the world."
Industry Super Australia also commented, saying that removing compulsory super for low income workers "would not only undermine the very premise of Australia’s superannuation system, it would see vulnerable workers pay more taxes for less money at retirement."
ISA argued that for a person earning $50,000 per year, "raiding their super guarantee contributions would increase their personal income tax bill by $1,710 a year - an increase of nearly $1,000 on the low tax they would otherwise pay in super."
"Any claim that this would 'save' $1.8 billion conveniently ignores the fact that wages are taxed at a higher rate than superannuation," the statement continued, "meaning this would actually cost low income workers more in the long run."
What do you think about the proposal to make super voluntary for workers on less than $50,000 per year? In justifying it, Liberal Senator Andrew Bragg said super "is a classic case of vested interests triumphing over the national interest" and that it has "made the unions, banks and insurers richer than ever.”
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