Calls for an increase in the Super Guarantee level have come from a number of quarters in the wake of the Governments 2010 Intergenerational Report which projects issues facing Australia’s ageing population in the future.
Projections to 2050 include:
- The proportion of working age people is expected to fall, with only 2.7 people of working age to support each Australian age 65 and over by 2050.
- Labour force participation rate for people aged 15 and over is expected to fall to less than 61% by 2049/50, compared with 65% today.
- The ageing of the population will see the number of people aged 65 to 84 years more than double and the number of people 85 years and over more than quadruple.
- Over the past 40 years, real GDP growth has averaged 3.3 per cent a year. For the next 40 years, real GDP growth is expected to slow to 2.7 per cent a year.
Whilst the Government announced the launch of a $43.3 million Productive Ageing Package aimed at supporting older Australians who want to stay in the workforce, it has left superannuation off the potential solution agenda.
The ACTU, ASFA, IFSA & AIST have all expressed a desire to see the minimum level of compulsory super guarantee contributions increase to at least 12% as a starting point in addressing the issues.
Following the recent release of their super adequacy report, IFSA Chief Executive John Brogden announced
“It is clear that the current super guarantee must be raised to at least 12% if people are to have any chance of a comfortable retirement.” He further added “The Federal Government will have to consider other incentives in this area to encourage further investment in superannuation if Australia is to avoid a savings gap disaster in the future. Greater flexibility in the area of concessional contribution caps would greatly assist. Alternatively, much of the shortfall is going to have to somehow be funded out of future government revenue.”
Treasurer Swan said the Henry Review will address all aspects of superannuation.