Despite superannuation coming up in the Federal Budget for the eleventh year running, Industry Super Australia (ISA) has hit out at the Government for failing to tackle unpaid superannuation or close the gender super gap by not re-investing the savings made by other Budget super measures.
Last night’s Budget revealed that the Government will gain $1.615 billion from three super measures, which would see default insurance turned off for younger members, more inactive accounts consolidated to the tax office, and rules tightened for tax deductions on personal contributions.
ISA director of public affairs, Matthew Linden, said that while these changes were justified, the Government failed to address “equally if not more urgent issues”.
“The Government is right to prioritise the erosion of small super balances – particularly for younger workers. A number of industry super funds have already taken steps to change insurance coverage for younger members.
“However, it is disappointing the surprisingly large Budget savings from the measures are not being used to fix unpaid superannuation or close the gender super gap. Rather than pocket the $1.6 billion in savings it should have been be used to abolish the $450 super threshold, pay super on parental leave, and align the payment of super and wages.”
Linden said that these “simply policy steps alone” would ensure that millions of Australians receive super entitlements who are currently missing out on them, especially women.
Women’s super balances lagged males’ overall by 40 per cent, while there are over three million Australians who missed out on an average of $2,000 a year in unpaid super.
ISA also said that super funds needed to ensure the balance protection measures announced last night did not have unintended adverse consequences for fund members.
Linden pointed to the possibility that the insurance changes would impact risk pooling and lead to higher premiums for other members as an example.
“Funds will need to work proactively to ensure that members who should retain insurance, including for instance those on parental leave, don’t lose important cover,” he said.
