Surprise survey results from one of Australia’s largest superannuation funds has found that the majority of businesses supported the increase to the Superannuation Guarantee (SG) rate, including 14 per cent who strongly supported the rise.
From July 1 the SG rose to 9.5 per cent, (from the 9.25 per cent which applied for 2013/14). The legislation currently before parliament would set the rate to remain at 9.5 per cent for the next seven years, increasing to 10 per cent from July 2021, and 12 per cent from 2025.
The survey by Sunsuper consulted more than 500 Australian SME owners, and revealed that amongst businesses of 20 or more employees, support for the SG increase climbed to 85 per cent.
When asked how they would fund the increase in the SG rate, the majority of businesses planned to finance the rise from business savings/reserves (55 per cent), with the remainder saying they would withhold pay rises (21 per cent), or reduce bonuses (15 per cent) or salaries (9 per cent).
Sunsuper CEO Scott Hartley said the results proved that Australian businesses, including small and medium businesses, were mostly in favour of increasing the SG contribution rate to help staff save for retirement.
“It’s encouraging to see that most Australian business owners were planning to fund the SG increase themselves, rather than from employees’ pay, it shows that they care about helping their employees save for retirement, ahead of their own interests,” Hartley said. “It also further highlights what a disappointment this week’s announcement of the seven-year delay to SG rate increase could be for many Australians.
“We think that any shift in government policy which diminishes the capacity for Australians to save for and fund their retirement is discouraging.
“The shifting of the goal posts makes it difficult for people to have confidence in the Australian superannuation system, for businesses to effectively plan, and for employees to save for retirement.”
The survey also revealed that if the SG rate increase was delayed, Australian businesses would reinvest the money they would have used to fund the extra SG payments into their business (77 per cent), give staff a pay rise (10 per cent), give staff bonuses (9 per cent), or throw a staff function/party (3 per cent).