CANBERRA, AAP – Accountants believe it would be “plain common sense” for the Morrison government to pause the legislated increases in the superannuation compulsory guarantee coming out of a recession.
Instead, it should wait until the COVID-19 vaccine has been rolled out and employment and economic growth are in better shape.
The super guarantee is due to increase on July 1 from 9.5 per cent to 10 per cent and then incrementally rise to 12 per cent over the next few years.
The government has said it is reviewing this timetable and is expected to make an announcement in the May 11 budget.
Chartered Accountants Australia and New Zealand say pausing the increases would neither be a blackflip nor a broken promise but plain common sense.
The peak body’s superannuation leader Tony Negline says since the last election there has been a global pandemic, the first Australian recession in 29 years, the highest unemployment in 20 years, record stagnancy in wage growth and the “world falling apart at the seams”.
“The thing about a game-changer like a global pandemic is that it changes the game, which is why we need to call a time-out and look at the current state of play,” Mr Negline said in a statement on Monday.
“Accountants are on the front line of this crisis and know Australia can’t do anything to make it harder for a business right now to keep an employee, give them a pay rise or hire a new one.”
He said the recent Retirement Income Review shows increases in employer super contributions often mean employee salary and wages increase at a slower rate.
“Let’s park the super increase priority to when the vaccine is rolled out and when the employment and GDP numbers look a little less like a horror show,” he said.
However Mr Negline believes the super system needs protecting at a time when there are calls to allow young people to use super to purchase a home and some three million Australians were allowed to remove $36 billion out of their accounts during the pandemic.
“Our super system needs protection. Some are putting it to the sword and it needs a shield,” Mr Negline said.
“But what we can’t do is make it more generous right now.”