Australian workers are looking increasingly unlikely to receive an upcoming boost to their retirement savings.
Treasurer Josh Frydenberg appears to be softening the ground to break a promise on increasing the compulsory superannuation guarantee.
The super guarantee is legislated to incrementally rise from 9.5 per cent to 12 per cent, starting with a modest move to 10 per cent next year.
But the treasurer is rethinking the government’s election commitment.
“We are considering our options in light of COVID-19,” Mr Frydenberg told ABC radio on Thursday.
“Don’t get me wrong, I’m all in favour of superannuation, I think it’s very important that people save for their retirement.
“But there is a trade-off, and the trade-off is between wages and saving for retirement.”
The legislated increase will take effect on July 1 next year.
“We are still working through our options, we haven’t taken any decisions,” Mr Frydenberg said.
Former prime minister Paul Keating, the architect of Australia’s superannuation system, insisted the government could afford to increase the compulsory super guarantee.
“Of course they can,” he told ABC radio.
“Productivity is up, profitability is up, the cost of labour is going down.”
Mr Keating said superannuation was a structural change to the economy and shouldn’t be taken away when times were tough.
He blasted a “miserable little backbench group” pushing a “bitchy policy” to unpick the superannuation system.
“We’ve got the best savings system in the world and these monkeys want to destroy it,” Mr Keating said.
The Labor giant also railed against the coalition for giving people early access to their super during the pandemic, which has seen $32 billion withdrawn from retirement savings.
“Those people should not have been called upon for income support by raiding their own savings.This should have been paid for by JobKeeper (wage subsidies) right from the start,” he said.