CANBERRA, AAP – The Morrison government is “stretching credibility to breaking point” by pretending their motivation to cut super is higher wages growth, says Labor’s Jim Chalmers.
The shadow treasurer will use a speech to the Association of Superannuation Funds of Australia virtual conference on Friday to challenge the government as it weighs up whether to pause a lift in the superannuation guarantee due in July.
The guarantee is legislated to rise from 9.5 per cent to 10 per cent mid-year before gradually getting to 12 per cent in July 2025.
Dr Chalmers said as Australia climbed out of the deepest recession in almost a century, it was time to decide what sort of recovery people wanted.
“Whether we can make our economy and our society stronger and more secure post-COVID than it was before,” he will say.
When Treasurer Josh Frydenberg released his Retirement Incomes Review, the debate focused on the interaction of superannuation and wages.
“But that discussion obscured a more fundamental reality – that wages growth and retirement incomes have both been inadequate for too many Australians for too long,” he said.
In the six years before the government froze the guarantee in 2014, wages grew at about 3.3 per cent, but in the six years since, wages growth has averaged two per cent.
“Weak wages have reduced retirement incomes,” Dr Chalmers said.
“If wages had not been so weak since the 2014 super freeze then the average 30-year-old could have an extra $40,000 in super when they retire.”
The Reserve Bank expects wages growth to hit a new low of one per cent, not returning to two per cent until mid-2023.
“So to pretend now that their motivation to cut super is higher wages growth stretches credibility to breaking point,” Dr Chalmers said.
“The Morrison government should stop pretending another super freeze is about higher wages instead of higher super, when the truth is they want neither and they have form on both.”
He said Labor would prefer a bipartisan consensus on the right kind of economic recovery, “but if what’s needed here is a clash of political armies, then so be it”.
“We are on the side of the vast majority of working Australians who are struggling with stagnant wages and worry if they can afford a decent retirement.”
The speech followed Labor leader Anthony Albanese’s unveiling this week of an industrial relations policy focusing on job security.