Labor doesn’t trust the Morrison government to find ways to build wages growth if it ditches legislated increases in the compulsory superannuation guarantee due to start next year.
The long awaited independent report into retirement incomes found increases to the super guarantee, while providing a better standard of living in retirement would come at a cost to workers’ wages.
The Reserve Bank of Australia and the Grattan Institute have made similar observations in the past.
“The government has been clear that we will work through all of these issues in terms of any decisions that had to be made and respond appropriately next year,” Finance Minister Simon Birmingham told Sky News’ Sunday Agenda program.
The super guarantee is due to increase to 10 per cent from 9.5 per cent from July next year and then incrementally to 12 per cent over a number of years.
Labor’s employment spokesman Brendan O’Connor doesn’t agree with the proposition wages will flow on to workers if they forego the super guarantee increase because evidence shows that’s not the case.
The super increase was previously delayed by the coalition government under Tony Abbott but wage growth subsequently slumped to its lowest level in at least 20 years even before the COVID-19 pandemic index.
Data last week showed annual wage growth has slowed to its lowest level on record at just 1.4 per cent.
“I wouldn’t trust this government to be finding ways to increase wage growth and all they’ve done is find an excuse not to pass on a super increase again,” Mr O’Connor told ABC television’s Insiders program.
He said the government made an election promise to go ahead with the legislated increases.
“It is not that surprising that Scott Morrison is looking to walk away from an election commitment, a promise he made to the Australian people because it was done by John Howard and Tony Abbott,” he said.
“They have never not found a reason to defer an increase to universal super. They have never supported it.”