Increasing the superannuation guarantee (SG) from 9 to 12 per cent will not negatively affect employers, the Association of Superannuation Funds of Australia (ASFA) has claimed.
It said its analysis had shown employers would pass on the burden of an increase either in the form of price increases for their goods and services or by lowering wages or both.
Short-term costs for employers would increase by 0.25 or 0.5 per cent at most, it said, while reduction in company tax rates would further assist employers with any cash flows issues.
ASFA said empirical modelling confirmed the SG increase would not have a negative affect on employment.
The industry body compared the cost of the age pension (2.7 per cent of GDP increasing to 3.9 per cent by 2050) to the net fiscal cost of compulsory superannuation at less than 0.5 per cent of GDP.
Benefits of increasing the SG included a 1.3 per cent increase in investment, a 1.04 per cent increase in exports, 0.9 per cent increase in capital stock and an increase in the real wage rate of 1.06 per cent, as well as a 0.33 per cent increase in GDP.
ASFA said the current level of contributions was not sufficient to support the retirement ideals of the majority of Australians. It said a 9 per cent SG rate would leave Australians well below the Organisation for Economic Co-operation and Development (OECD) replacement rates for the average worker.
Additionally, ASFA said an increase in life expectancies and widespread support among the population were further reasons the SG should be increased.
Last week, the Association of Independent Retirees (A.I.R.) said the Opposition’s proposed delay to the SG was critical to ensuring business profitability during a time of low productivity.
