NECA opposes super guarantee increases funded solely by employers

The National Electrical and Communications Association (NECA) has stated that it opposes the proposals of a number of commentators to increase the superannuation guarantee, from the current level of 9%, if the burden to fund the increase falls solely on employers.

According to NECA National Chief Executive Officer James Tinslay: “The debate about the adequacy of superannuation savings is a worthy one but it shouldn’t be assumed that employers fund an increase in the superannuation guarantee.

“Employers already bear a large burden of retirement funding by way of the existing 9% contributions they make under the superannuation guarantee legislation, as well as through contributing around 40% of general tax revenues that are used, in turn, to pay for pensions.”

Superannuation and retirement saving policy is a critical issue for an ageing population and many reports and enquiries have taken place during previous years about adequacy of retirement savings. As part of the broader community, industry has a responsibility to contribute to the debate.

“Rather than further increasing the burden on employers, there are other valid alternatives that should be explored, including government co-contribution, the co-contribution of employers with employee contributions and mandatory employee contributions,” Tinslay continued. “Research by the University of Melbourne suggests that each 1% increase in employer obligation could come at a cost of approximately 57,000 jobs. No sensible policy to fund superannuation should come at a cost to jobs.

“Those calling for employers to address Australia’s retirement savings challenge alone need to properly assess the real downsides and contemplate a more load-sharing deal for the community.”