Scotty and Josh are riding the superannuation wrecking ball in 2020

 

Josh and Scotty a double act since 2018
IMAGE: The Guardian

Employers are required to fulfil their obligations under the Superannuation Guarantee (Administration) Act 1992 (or under industrial agreements in many cases) to make superannuation contributions on behalf of their employees.

The current statutory rate of employer compulsory superannuation contributions is scheduled to rise incrementally by 10 per cent in 2021 and reach 12 per cent in 2024.

According to the Financial Review on 15 July 2019; Politicians, public servants and academics are among the est. 2 million workers or 18 per cent of all employees who would be unaffected if a scheduled rise in the compulsory Super Guarantee from 9.5 per cent to 10 per cent to 12 per cent did not occur as their existing employer superannuation contribution is already above 12 per cent.

Another est. 300,000 people, or 3 per cent of all employees are not included in the Super Guarantee as they earn less than $450 a month before tax and est. 63 per cent of these workers are female.

Add to this the reportedly 2.2 million employees who do not receive their full super entitlements because their employers unlawfully do not pay all or any employer contributions to eligible workers and, the size of the workforce who might receive a benefit from a 0.5 per cent increase in the Super Guarantee next year has shrunk to est. 8.2 million workers.

Based on full-time average adult weekly earnings in October 2020 an employer’s compulsory superannuation contribution per worker would be est. $651 per month at 9.5% in 2020 and $681 per month at 10% in 2021.

That’s an increase of $30 a month or $7.50 a week next year.

A dollar a day is not going to break either the employer or the worker and, at the end of the 2021-22 financial year there would be an extra $415 in interest payments in that worker's superannuation account – and if that worker has another 30 years before retirement that $415 dollars in interest could represent up to $29,000 more in his/her superannuation account at the end of that time period.

When one considers that an est. 98 per cent of all businesses in Australia employ 20 or less people and as that would only mean an employer contribution increase of $20 or less a day for the vast majority of employers, it is hard to see this as an unreasonable move.

After all, even the Morrison Government admits that superannuation assists middle income earners to smooth their income over their lives, and Without compulsory superannuation, middle income earners would not save enough for retirement.

However, the Abbott-Trunbull- Morrison Government does not fancy 8.2 million workers receiving an extra $30 a month in their super accounts next year.

So Josh Frydenberg is doing a good imitation of Chicken Little and screeching the sky will fall if $1 a day is added to a worker’s superannuation account in 2021. 

He bespoke a study from Treasury to back him up when it comes to not increasing the Super Guarantee this year and moving towards a policy of forcing homeowners on age pensions or retirees with little super to either sell their house or borrow against it in order to fund retirement, so that Scott Morrison can happily continue his personal war on the poor and vulnerable.

Put simply the Morrison Government is arguing that neither workers, their bosses nor the national economy can afford an increase in the amount of money which enters a worker’s superannuation for his/her financial benefit on retirement.

Quite frankly I see no real justification for that stance.

A stance that is also incredibly hypocritical given that by 2007 the Parliamentary Contributory Superannuation Scheme saw newly elected federal parliamentarians receiving government compulsory contributions into their own superannuation accounts at a rate of 15.4 per cent in order to bring superannuation arrangements for parliamentarians in line with current community standards.

The lack of congruence between what federal politicians see as community standards applicable to themselves and community standards as applicable to ordinary workers is so marked that the ordinary voter has begun to notice......

This is Josh. He gets 15.4% super & he can access it as soon as he leaves parliament. You get 9.5%. You have to wait until 67. There is a super guarantee which will raise your super to 12%. Josh wants to stop this. That’s what his sweaty rants are about. Because fuck you. pic.twitter.com/32fuaY2ega

— 🖕🏿🍑💧Rudy Terwilliger (@wolftickler2000) November 23, 2020