As per Treasury secretary Steven Kennedy said that each 0.5 percentage point increase in superannuation guarantee, wage growth fall 0.4 percentage points every year. Superannuation guarantee is to increase from 9.5 percent of gross wage to 12 percent between July 2021 and July 2025.
As also said by the Minister for Superannuation financial services and the Digital Economy, Jane Hume that the Superannuation Guarantee comes “at a cost” and the result is slowed wage growth.
Tax counsel at Tax & Super Australia, John Jeffreys, warned that business should prepare the business from increase in SG, for non-payment and late/under payment can attract penalty from the ATO, as there is no grace period set up from ATO guidance.
The result below a survey conducted by consultancy firm Mercer, on how the Australian businesses prepare for the SG increase, the result show that 145 firms surveyed:
- 46% of respondents were still studying and assess the full cost of SG increase.
- Businesses offering their staff base-plus super package- 62% of the respondents they take the full cost of SG increase and maintain the employees take home pay.
- Business offering total package arrangement – 66% if the firms, that their staff will bear the cost of SG increase.
Sally McManus from Australian Council of Trade Unions secretary told the panel discussion in Australian Institute of Superannuation Trustees conference in May, that the changes in SG could offer the employers a legal opportunity to cut the take-home pay of their staff. Only a small number employee to suffer a pay cut she said. She also said that, “The issue of low wage growth is a big structural problem unrelated to the super issue, and it would be if super was going up or if it was not going up.”