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Super Outlook Update: Time is right to lift contributions
The Australian superannuation sector believes the time is right to lift the amount of money people personally contribute to superannuation, either by lifting the superannuation guarantee or by introducing a form of ‘soft compulsion’.
The IUS/Super Review Super Outlook survey conducted late last year and analysed by independent economic consultancy Classical Economic Analysis revealed that while a strong majority of respondents believed the existing 9 per cent superannuation guarantee was too little, there was considerable merit in pursuing a regime of soft-compulsion – something which has been supported by the Association of Superannuation Funds of Australia (ASFA).
The survey found that 86.9 per cent of respondents believed the superannuation guarantee needed to be lifted beyond the existing 9 per cent, while 85.9 per cent believed that a form of soft compulsion, such as apportioning a percentage of each pay rise to super unless a worker specifically decided otherwise, might also prove effective.
The survey was conducted during last year’s ASFA National Conference on the Gold Coast and barely a month after the former Labor Prime Minister, Paul Keating, suggested that the superannuation guarantee should be lifted closer to 15 per cent.
The newly-elected Labor Government has indicated that it will not be pursuing any increase in the superannuation guarantee but that it is sympathetic to the soft compulsion model mooted by ASFA.
Participants in the latest Super Review round table also held during the ASFA conference signalled that they believed the current 9 per cent superannuation guarantee was still too low to facilitate an adequate retirement for most Australians.
3 June 2008
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