the economic downturn brought about by the Coronavirus pandemic. Nevertheless, the Morrison government has decided to stick to the timeline and go ahead with the increase in the superannuation guarantee from Thursday (1 July).
According to ISA, this small rise, which will benefit about 6.7 million Australians, will make a noteworthy positive difference in the long run. The move is expected to result in an additional injection of $1.5 billion into the total superannuation system, as each average worker receives about $233 a year. To provide a better perspective, this 0.5 per cent increase will mean that on average, a 30-year-old worker who receives a medium wage is set to have an extra $19,000 at retirement.
“This is the first of a number of increases the government has promised and locked in law for the coming few years,” ISA chief executive Bernie Dean said. He noted that it is the young people who will be the “big winners” from these increases as it will help those who had to raid their super during the pandemic last year to make up some of the lost ground.
Dean also pointed out that the rise will particularly assist women who often have less super savings in comparison to their male counterparts. “These increases will give women more financial independence and that means a better shot at a dignified life in retirement, not one marked by poverty,” he noted.
According to ISA, the expected rise to 12 per cent by 2025 will make an additional contribution of $12 billion to Australia’s GDP and will generate over 10,000 jobs while increasing real wages as well.
