news, federal-politics, treasurer, superannuation, josh frydenberg
The federal government says it will consider whether a scheduled superannuation increase will go ahead mid-next year in light of a new report into retirement income. Treasurer Josh Frydenberg announced a legislated increase of superannuation to 10 per cent in 2021 will be reconsidered following the public release of the Retirement Income Review along with the economic impacts of the COVID-19 pandemic. “We will consider … this report, will consider other views that have been placed out there and we will make a decision about that in light of current circumstances before the scheduled increase takes place,” Mr Frydenberg said in a press conference on Friday morning. “The key point also to underline here is that we are living in a very different economic environment than we were this time last year. We have been subject, as a nation and a global economy, to a once in a century economic shock with COVID-19.” The superannuation guarantee, the minimum amount employers are required to contribute, is scheduled to increase from 9.5 per cent to 10 per cent in July 2021. It will then increase in 0.5 per cent increments to 12 per cent by July 2025. The 648-page report, which was delivered to the government in July but publicly released today, instead details the positive long-term financial impacts of freezing superannuation at its current 9.5 per cent level. “The weight of evidence suggests the majority of increases in the superannuation guarantee come at the expense of growth in take-home wages,” the report said. “If the superannuation guarantee stayed at 9.5 per cent rather than increasing to 12 per cent, they would also have higher incomes during their working life.” The government has said it will consider the findings of the report and determine whether the scheduled increase will ahead. The findings suggested more support be provided to people in order to optimise superannuation balances, rather than simply increasing contributions. “The focus of superannuation has often been on building larger superannuation balances through increased contributions. But lower fees and higher investment returns will increase superannuation balances,” the report said. “Crucially, there has been insufficient attention on assisting people to optimise their retirement income through the efficient use of their savings.” The report also supported the government’s controversial early release superannuation scheme, which it said helped cushion the economic blow of the COVID-19 pandemic. It allows Australians to access up to $20,000 from their super accounts over two financial years. “Offering prudent and limited access to superannuation prior to retirement is consistent with the objective of balancing living standards pre- and post-retirement,” the report said.
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The federal government says it will consider whether a scheduled superannuation increase will go ahead mid-next year in light of a new report into retirement income.
Treasurer Josh Frydenberg announced a legislated increase of superannuation to 10 per cent in 2021 will be reconsidered following the public release of the Retirement Income Review along with the economic impacts of the COVID-19 pandemic.
“We will consider … this report, will consider other views that have been placed out there and we will make a decision about that in light of current circumstances before the scheduled increase takes place,” Mr Frydenberg said in a press conference on Friday morning.
“The key point also to underline here is that we are living in a very different economic environment than we were this time last year. We have been subject, as a nation and a global economy, to a once in a century economic shock with COVID-19.”
The superannuation guarantee, the minimum amount employers are required to contribute, is scheduled to increase from 9.5 per cent to 10 per cent in July 2021. It will then increase in 0.5 per cent increments to 12 per cent by July 2025.
The 648-page report, which was delivered to the government in July but publicly released today, instead details the positive long-term financial impacts of freezing superannuation at its current 9.5 per cent level.
“The weight of evidence suggests the majority of increases in the superannuation guarantee come at the expense of growth in take-home wages,” the report said.
“If the superannuation guarantee stayed at 9.5 per cent rather than increasing to 12 per cent, they would also have higher incomes during their working life.”
The government has said it will consider the findings of the report and determine whether the scheduled increase will ahead.
The findings suggested more support be provided to people in order to optimise superannuation balances, rather than simply increasing contributions.
“The focus of superannuation has often been on building larger superannuation balances through increased contributions. But lower fees and higher investment returns will increase superannuation balances,” the report said.
“Crucially, there has been insufficient attention on assisting people to optimise their retirement income through the efficient use of their savings.”
The report also supported the government’s controversial early release superannuation scheme, which it said helped cushion the economic blow of the COVID-19 pandemic.
It allows Australians to access up to $20,000 from their super accounts over two financial years.
“Offering prudent and limited access to superannuation prior to retirement is consistent with the objective of balancing living standards pre- and post-retirement,” the report said.
- Additional reporting by AAP
