Treasurer refuses to rule out further changes to superannuation system

Superannuation Minister Jane Hume said the higher guarantee added "a layer of urgency to making the system more efficient".

Superannuation Minister Jane Hume said the higher guarantee added "a layer of urgency to making the system more efficient". Photo: AAP

Treasurer Josh Frydenberg has declared there are “no plans” to scrap the increase in employers’ super contributions to 12 per cent, but he refused to rule out future changes.

During an interview on the ABC’s Insiders program on Sunday, the Treasurer was asked five times to rule out delaying or dumping the super guarantee increase.

Under current laws, the amount employers must contribute to workers’ super is set to rise sharply from 9.5 to 12 per cent by 2025.

A table showing when the super guarantee will lift, and by how much.

Guaranteed super contributions are scheduled to start increasing from July 2021.

“We have no plans to change that legislated increase,” Mr Frydenberg said.

Asked repeatedly if he would develop “other plans” after an expected review of retirement incomes policy, Mr Frydenberg again stopped short of denying future changes.

“We have no plans to change the legislated increase,” he said. “You’re very cynical.”

The Treasurer then raised, unprompted, the report by the Grattan Institute that raised concerns about the current arrangements and suggested workers would be better off getting a pay rise now than more super later.

“We have no plans to change the legislated increase. It goes to 12 per cent. But what we saw from the Grattan Institute this week was an interesting report on this very point, because what we need to fully understand with this increase is what is happening to retirement incomes. What’s happening to the nation’s savings.

“Again, it’s already a legislated increase. But what is important is that we continually stay abreast of the impact of those changes on retirement incomes, national savings and the national balance sheet.”

Labor’s treasury spokesman Jim Chalmers warned on Sunday that the government should rule out any future rollback.

“These weasel words from Josh Frydenberg are not good enough – especially in the wake of the campaign from Coalition backbenchers to axe the scheduled increase,” Dr Chalmers said.

“The Liberals have a long track record of winding back legislated superannuation increases. John Howard scrapped them, Labor reintroduced them, Tony Abbott’s attempts were blocked in the Senate, and now the Morrison government is at it again.”

Superannuation Minister Jane Hume told The New Daily that while the super guarantee was now legislated, it did underline the urgent task of improving the sector.

“It’s legislated. There are no plans to repeal it, but it does add a layer of urgency to making the system more efficient,” she said.

One option could be making the planned increases conditional on the super industry becoming more efficient included in the terms of reference for the retirement incomes policy.

The Morrison government has already also opened the door to allowing workers to contribute more to their super accounts to save for a first-home owner’s deposit and then withdraw the money when they needed it.

Industry Super Australia’s deputy chief executive Matt Linden said one of the most pressing areas of reform was fee- and profit-gouging by the big banks.

“The government ought to be guaranteeing the increase that has been legislated,” Mr Linden said.

“We did say we supported the proposition put by Jane Hume to improve the efficiency in the sector. Probably the No.1 thing is to weed out underperforming funds and tackle the fee- and profit-gouging we have seen from funds run by the banks.”

The New Daily is owned by Industry Super Holdings

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