The Government could safely allow an increase from the current superannuation guarantee (SG) 9.5 per cent to 12 per cent without creating wages growth, according to AustralianSuper independent director and former adviser to former Labor Treasurer and Prime Minister, Paul Keating, Dr Don Russell.
Addressing Super Review’s Future of Super Conference in Melbourne, Russell said that the manner in which productivity growth had outstripped wages growth meant there was capacity to lift the SG without adding to wages pressure.
He said that the simple fact of the matter was that the superannuation guarantee needed to be looked at differently during a period of wage stagnation and produced a graphic to indicate that while productivity had increased over the past 10 years, the SG had not of itself been a factor.
Russell said that much of the growth had been driven by the terms of trade which had added about 21 per cent to gross domestic product which equated to the addition of about two per cent to the capacity to pay increased wages.
He said on this basis, there was a capacity to proceed with the time-table for increasing the SG without fuelling wages growth.