The super wars are over (if you want them to be)
While Liberals and Labor have sparred for decades, it seems that many Australians believe the ideological conflict waged over superannuation is mostly moot.
The super wars have raged unchecked since the introduction of the superannuation guarantee (SG) in the heady days of 1993. But the ideological battles in Parliament and the press have been waged far over the heads of the system’s main beneficiaries. For everyday Australians, many of the believed flashpoints – the issue of the SG increase, early release, and mandatory contribution – are anything but.
Indeed, superannuation “is not on the issue agenda for the vast majority of Australians right now”, according to research conducted on behalf of the Association of Superannuation Funds of Australia (ASFA). They believe that more money should be saved for retirement, not less, and are “very satisfied with the performance of their super funds.”
“The views of the community were unequivocal. Australians value superannuation and consider that it is crucial to ensure they have dignity in retirement,” said ASFA CEO Martin Fahy. “It is clear that the average Australian believes more money should be saved for retirement and not less. However, many Australians are concerned that while they personally may have saved enough to live well in retirement, others who don’t save might become a burden on taxpayers.”
The LNP’s hostility to the SG has waxed and waned in recent years, with proposals for a cut or freeze circulated in the lead-up to the 2020 Budget but ultimately dropped. Leaving aside the economic case that further increases will likely reduce take home pay, the political case for a cut has always been shaky given it would open the LNP up to heavy hits from Labor on one of their heartland issues.
ASFA’s research supports the idea that Australians would have a dim view any attempts to cut the increase.
Most participants suggested they were strongly in favour of continuing with the rise in the super guarantee to 12 per cent, and had priced it into their minimum expectations for personal finances in the years ahead. The idea that a legislated increase might not go ahead was viewed as a “personal loss of income and financial security”, while some participants said that a cut or freeze would equate to a “broken promise.”
In fact, the superannuation industry ranked nearly dead last on a full set of national issues put to respondents, placing just in front of improving broadband and mobile coverage across Australia. Improving access to healthcare and reducing wait times was the number one issue for respondents.
There appears to be no political will to change the system further. The LNP has sworn up and down that they’ll leave the SG alone. On the other side of the aisle, Labor has mostly capitulated to the changes of Your Future, Your Super, saying that they’re unlikely to tinker with the performance test before time. Will the super wars finally end? Maybe they’ve just gone cold.
After all, there is a deep and lingering suspicion in the industry’s true believers that the LNP will never really give up on the issue of the SG increase, evidenced to them by its renewed interest in “flexibilising” the system through proposals like Tim Wilson’s “home first, super second”. Perhaps these findings will give them an opportunity to draw a line in the sand.