Super is for a rainy day, but we are in a cyclone

For the next six months employers' compulsory 9.5 per cent superannuation contributions should go into workers' pay packets.

9/04/2020 8:15:00 AM

Opinion: For the next six months employers' compulsory 9.5 per cent superannuation contributions should go into workers' pay packets.

For the next six months employers' compulsory 9.5 per cent superannuation contributions should go into workers' pay packets.

Very large text sizeThe government is doing an outstanding job in keeping the economy going while the restrictions imposed appear to be flattening the infection curve, but it’s too early to say that with certainty. There is a limit to how much the government can borrow to deal with the economic challenges.

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A simple non-budget solution would be to legislate so that for the next six months every salary and wage earner in Australia may choose to take their compulsory 9.5 per cent superannuation contribution in their pay packet. Compulsory contributions will automatically return to normal at the expiration of the legislation unless otherwise approved by Parliament.

The nation must decide its best path forward: People lining up at a Centrelink office amid the COVID-19 shock.Credit:Getty ImagesThat is equivalent to a 9.5 per cent overnight increase in pay available to every working Australian. An increase on which they will pay tax according to their tax bracket. There is no cost to government and, in fact, an increase in income tax revenue. There is no cost to business, which is important as many businesses are struggling to survive.

Theoretically the Australian annual GDP is approximately $2 trillion ($1.89 trillion in 2019) and wages and salaries are approximately 55 per cent of that - say $1 trillion a year. A 9.5 per cent increase is worth approximately $100 billion a year. Last year super contributions totalled $120 billion. Assuming conservatively that 50 per cent choose to keep paying into their super, that is an instant $50 billion to $60 billion per year increase in overall pay. This would be a much needed boost to a dissolving economy and just as importantly would give a lift to consumer and business confidence.

AdvertisementThe super funds have $3 trillion under management. I understand that this could cause some short-term liquidity problems for the funds and in particular for the smaller funds. This is a better solution than eating into existing super balances at a time of depressed asset values. The Reserve Bank could establish a facility to help with any short-term liquidity problems. Given that compulsory contributions would commence again in six months, the funds are eminently bankable.

The super funds are a major portion of our savings pool. This is not a proposal to dip into the existing pool. It is a proposal to temporarily reduce the growth of the pool at a time of great economic and social distress. Most of business is suffering and are playing their part in keeping things going. It is not unreasonable to ask the super funds who have a rare, privileged position in our economy to make a short-term contribution. It is, after all, the members' money and they should have the opportunity to decide how they use it over a defined short period in these strained times.

LoadingI never thought I would see the day when average hard-working Australians were lining up at Centrelink. Our focus must be on keeping the economy going, helping the many who are suffering and then speeding up the recovery. An injection of $50 billion to $60 billion per annum or more into wages satisfies all three criteria without adding further to the growing deficit. Super is for a rainy day but we are in a cyclone. This is the people’s money and their future. It is a time for reality and not a time for paternalism.

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Employers should be exempt from paying it during the lockdown and maybe they could retain more staff on the books? No way! That's just putting off the issue for another day. Superannuation is going to be needed by everyone at some point because God knows we can't trust the government to take care of anything, let alone our futures.

What a dopey idea. Um, no. Twaddle. I’m sick of rich conservatives wanting to destroy workers retirement incomes. These are the same people who complain about paying the aged pension. No What the fuck is wrong with you people. You really are hoping we're all gonna die soon, aren't you. No bullshit. Always pensioners whinge about their income. And you want to reduce their pool of funds? No.

Nope That'd be great if your employer paid your Super weekly. but they don't. if you're lucky they'll pay it monthly. No. Stop fucking with super. Start doing this stuff & dilute its purpose then nek minute the IPA & LNP far right n Titans of Industry will have an excuse to make it optional like it is in NZ. Aust Super has been the best wealth building tool for a generation hey Paul_KeatingPM

No and No, what are people going to spend it on. Those who still have a job have same or lower costs so it won’t stimulate anything. As it is, online gambling is the major benefactor of the current stimulus no problem No, Super is for retirement. No other purpose In order to be SELF-RELIANT in their OLD AGE, many Older People paid Superannuation all of their working lives however, with STOCK MARKET CRASHES i.e. the GLOBAL FINANCIAL CRISIS & the COVID-19 CRISIS, they are NOT much better off financially than those relying on PENSIONS.

Another stupid opinion from SMH It's a bad idea: A very rough calculation based on a median age worker (39) earning a median wage of $1,100 will get an extra $100 per week. But they will lose around 11K in super if this runs for only 6 months. No not good idea at all. Leave it as it is 'Rainy day'? Don't think so. It's actually our ticket to another 25 laps around the sun

Super is not for a rainy day - it is for retirement. Ridiculous and complete misunderstanding of how Super contributions are made by employers, fuck me does the public have to educate you halfwit journos every time you come up with an idea to click bait people No, it really shouldn't. If you're working and getting paid then you're getting super. Stop trying to push the problem down the road. Using this catastrophe to further some pricks aim to destroy super is abhorrent.

This is not a good idea Lol Brilliant idea! No thank you. Another who doesn’t understand super... No! This cannot happen. People have nothing now and will have even less later in life. Dumb. How about taxing Gina? Many businesses pay super quarterly or biannually so it's not going to help. Dumb idea It's better to do this than for people to withdraw from their super. It does assume that people are still working and earning enough to require compulsory employer contributions. The Peru govt also announced this 2 weeks ago. Is our govt just copying others?

No. It shouldn't. As long as the public keeps voting for the LNP the risk of the all encompassing pension being revoked is all tools real. So some enforced saving should continue regardless. Superannuation? What’s that? Carers on support payments work 8 hrs a day 7 days a week, and on call at night. They get bugger all money, work hard, have no social life and get no superannuation.

Do you people ever think before publishing... Seriously. FO. Pricks like Shepherd would do anything to undermine workers entitlements. GTFOH This is one of the better times for everyone to take whatever $$ they have and invest; buying a big screen TV today VS lower valued blue chip stocks and super units is not the option I would choose!

Typical nonsense from SMH Coming from a liberal and a businessman. Read between the lines. After 6 months make it permanent then we don’t have to give wage increases. Retirement? Who gives a toss besides they will be dead by the time they are entitled to the age pension. Why? Theres nothing to spend the extra money on let alone the money we get paid now.

Yeah give me the cash Super is not for a rainy day, it’s for retirement. Savings are for a rainy day. Nope. nothing is going to anyones pay packet if small business are held up against the wall and forced to shut, This entire thing is a scam to mess with the US election Trump2020 The most awful idea ever. This will only cause suffering in the long term and for people to more likely need social support at retirement. This requires longitudinal thinking. auspol economy

If you're still working and getting paid do you really need access to this money now? How stupid is this idea. If people are getting 9.5% super paid to them they are obviously still employed. This is an awful idea for people ever wanting to retire who are lucky enough to have a job. Going to get rock bottom prices in the next 6 months.

I'd put it straight into my super if they did if so, the Australian share market will tank No.

'I am OK': Pell's accuser accepts High Court decisionGeorge Pell's accuser, known only as Witness J, has released a statement after the High Court quashed the Cardinal's convictions. Who cares how Pell is? What about the young man who was sexually abused by Pell? Does The Age care about him and all the others who have got away with vile abuse over the years. Let’s hope Pell isn’t litigious and decides to counter sue.... I dare Pell to stick his head up in public thinking he has been vindicated. Or for our pedo loving PM to invite him to dinner at Kirribilli House.

Vanuatu faces 12-month recovery as Cyclone Harold heads for FijiDisaster officials in the small Pacific nation of Vanuatu work around the clock to assess the damage that a category five cyclone caused to remote islands, as Cyclone Harold heads for Fiji. That's awful! And it's not like there's a lot of people who can afford to donate to the recovery effort either. Those poor people ☹

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Tonga braces for Cyclone Harold damage after destruction in Fiji and VanuatuAs Vanuatu and Fiji emerge from a trail of destruction left by Tropical Cyclone Harold, Tonga is bracing for damage as the category five storm passes the island kingdom. we r spending $200bils to bailout our sinking economy Now Pacific islanders r expecting us to deliver aids when they have been arrogant n nationalistic They get very touchy when our PM says anything Cyclone danger continues in island countries... Now, it is in Tonga

'Nightmare scenario': Pacific islands risk being ravaged by COVID-19Pacific island countries would be decimated by an outbreak of COVID-19, a new study has found, highlighting the need to protect Australia's neighbours from the global pandemic | Gallo_Ways Gallo_Ways we have just spent $200bils to bailout biz here n workers They should be on their own They have been very touchy on their indep They were upset when we slighted them Tuvalu &Fiji They can do thing their own way Ask WHO Gallo_Ways These islands seem to be unviable living environments. Gallo_Ways No one is buying this sh*t anymore.

Vanuatu needs aid after Cyclone Harold, but there are fears it could cause a coronavirus emergencyAid organisations are under pressure to coordinate a disaster response in cyclone-hit Vanuatu, but concerns have been raised about the accidental importation of COVID-19 into a country with no known cases. SBS At what point does rising sea levels make repairs to islands in the Pacific pointless? They should move for the sake of their children's children.