The Superannuation Guarantee scheme in Australia is a cornerstone of the country’s retirement income system. The minimum employer contribution rate was to rise gradually from 9.5 per cent to 12 per cent over the period 2013 to 2019. However, a series of delays to the legislated increases in the Superannuation Guarantee has affected the future retirement holdings of millions of Australian workers.
Today, there is, once more, a live debate over the merits of gradually increasing the Superannuation Guarantee from 9.5 per cent to 12 per cent over the period 2021 and 2025. But, as this analysis demonstrates, a delay to the increases in the Superannuation Guarantee is unwarranted. A delay would be unlikely to make a significant difference – or any difference at all – to take-home wages and would assuredly damage future retirement savings.
- There is no clear empirical evidence that increasing the superannuation guarantee directly lowers wages.
- The claim that a one percentage point increase in the Superannuation Guarantee will lead to a one percentage point reduction in wage growth is inconsistent with available data.
- Our analysis finds no evidence to suggest that increases in the Superannuation Guarantee come out of workers’ wages.
- Cancelling the scheduled increases in the Superannuation Guarantee will only harm workers’ overall wealth and income, and there are no conditions in place to translate such a policy into direct wage increases.