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Senator Jane Hume said the government’s legislated superannuation increase hinges on a final decision from the Prime Minister closer to 1 July.
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‘Money doesn’t grow on trees’: Hume wavers on SG increase
22 March 2021
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Speaking to ABC news breakfast on Thursday, the Minister for Superannuation, Financial Services and the Digital Economy, Jane Hume, said that while the superannuation guarantee increase of 0.5 per cent is set to come into effect this year, a delay could still be on the cards.
The superannuation guarantee is scheduled to increase by 0.5 per cent to 10 per cent from 1 July, before incrementally rising to 12 per cent by 2025.
“Money doesn’t grow on trees and there is a good chance that if there is an additional cost to employers when they pay that extra 0.5 per cent that it will come at the expense of potentially wage rises in the future,” she said.
“While it has already been legislated for some time, it comes at a cost.”
Questions over whether the increase will come into effect on 1 July come as Treasurer Josh Frydenberg hints at a possible pause to the SG increase after the Retirement Income Review found that working income could fall by 2 per cent if the SG rate rises to 12 per cent.
Ms Hume admitted that the increase could result in slowing wage growth.
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“The Prime Minister has said that he will assess the situation closer to the time based on the best information available to him at the time,” she said, “the best economic information available to him at the time.
“I don’t think that this could come at a worst time, but that said, it’s been in place for a long time and it is already legislated.”
The Morrison government’s stifled approach to the super guarantee attracted industry backlash on Friday, as Industry Super Australia (ISA) said it would launch a “mass-media campaign” in opposition to the government’s hesitation.
“We will embark on a mass-media campaign to protect members’ financial interest and warn them the government is poised to abandon or undermine the boost in the super guarantee to 12 percent,” ISA said in a statement.
The peak body claimed that, despite the Morrison government’s election promise to honour the legislated super guarantee increase, the Coalition would now move to cut it, or make other, adverse changes, leaving women “further behind,” and retirees forced to sell or mortgage their homes.
“These changes could push retirees into having to sell or mortgage their home to get by,” ISA said.
“The government’s proposed changes to super would leave millions of workers worse off at retirement and over their lifetime, force them to pay more tax and would add more than $33 billion to the aged pension.
“Cutting the rate would also put women further behind as more women than men get the super increase.”
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