Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume has not ruled out an increase to the superannuation guarantee (SG) levy, but said a final decision on the subject will be made closer to the time of the scheduled rise due to the unpredictable economic conditions brought about by the coronavirus.
The SG is due to be increased by 0.5 per cent from 1 July 2021 and by an additional 0.5 per cent in every subsequent year.
“The Prime Minister has made it very clear it is a decision the government will make much closer to the date it [is scheduled] to apply because it genuinely depends upon circumstances at the time and the circumstances that we find ourselves in really are very fluid indeed,” Hume said during her presentation today at the Australian Shareholders’ Association Investor Virtual Conference.
However, she qualified this statement, pointing out such a move would be contrary to every initiative the government is currently undertaking in its attempts to stimulate a post-COVID-19 economic recovery.
She said an increase in the SG levy would in effect be detrimental to employees and their remuneration levels at an inopportune time.
“We know there is a direct trade-off between superannuation guarantee contributions because it’s a cost to business and a cost to labour, and an employer will pass on that cost in one way, shape or form,” she noted.
“They will potentially reduce a wage rise or they may potentially not employ another person or additional staff, so it comes at a cost and everybody admits that.”
According to Hume, everything the government is currently doing is with a view to reducing business costs and creating an environment where businesses can employ more people and pay them more.
“This particular policy flies in the face of that,” she said.