But many others advocating for the increase do so from a position of self interest. The management of superannuation, which is worth nearly $3 trillion, is a profitable business for unions, banks and others within the financial industry. An increase in the super guarantee is only going to multiply those profits.
The umpire in the debate could end up being the federal Treasury, which is expected to hand down a review of retirement income later this year. Recommended by the Productivity Commission, it is the first of its kind since the 1990s, when compulsory superannuation was put in place. It will look closely at the means-tested age pension, compulsory superannuation and the voluntary ways people fund their retirement, such as home ownership and savings.
What should be of special interest in the review, which was highlighted by Mr Andrews this week, is the “super gap”, whereby women retire with average super balances $110,000 less than their male counterparts.
While he sees his 15 per cent proposal as part of the solution, the Reserve Bank has already pointed out that because men tend to participate in paid work longer than women, such a large increase would only exacerbate the problem. Others solutions need to be found for women and for the increasing number of casual and gig workers who often accumulate little superannuation.
Should super be increased? While the Herald hopes the review will offer an impartial perspective, the case is yet to be made before backing the move to 12 per cent, let alone 15 per cent. In this instance, short-term gain may actually trump any long-term pain.
- The Herald’s editor Lisa Davies writes a weekly newsletter exclusively for subscribers. To have it delivered to your inbox, please sign up here.