10: Compulsory superannuation contribution increase Relevant Object of the Act: Section 3, Object and paras (a), (b) and (c) panel questions: [No specific questions directed to this issue] The BCA supports the increase in compulsory superannuation contributions as part of responsible provisioning for the future of both individuals and the Commonwealth Budget. However, these contributions need to be seen as deferred remuneration and thus offset against potential wage increases. The BCA would, therefore, view with great concern any suggestion that the increase in compulsory superannuation contributions should not be offset against expected wage increases. 10: COMPULSORY SUPERANNUATION CONTRIBUTION INCREASE CAUSE/DRIVER/ENABLER CONSEQUENCE SOLUTION Lack of offset policy Labour costs increased by As government enacts to statement or legislation by amount of compulsory provide the proposed government. contribution increase lack increase in superannuation – of recognition of contribution by employers, ACTU statements that there superannuation as deferred legislate specifically to offset should be no offset. salary and part of total hire against wage increases. costs. Require FWA to take account of any compulsory increase in employer superannuation contributions when setting wages in terms of: annual minimum rates review low pay determinations arbitration where a bargaining period has been cancelled. APPENDIX 1: AUSTRALIA’S LABOUR STRENGTHS WEAKNESSES Overall jobs growth weakened notably over of supply and demand for labour the last year, with no net job creation from Employment: the number of people December 2010 to December 2011 (see employed has increased from 7.6 million in charts), while ANZ data suggest job ads, a December 1991 to just under 11.5 million in forward-looking indicator, have also softened 2011 over the last 12 months
10: Compulsory superannuation contribution increase Relevant Object of the Act: Section 3, Object and paras (a), (b) and (c) panel questions: [No specific questions directed to this issue] The BCA supports the increase in compulsory superannuation contributions as part of responsible provisioning for the future of both individuals and the Commonwealth Budget. However, these contributions need to be seen as deferred remuneration and thus offset against potential wage increases. The BCA would, therefore, view with great concern any suggestion that the increase in compulsory superannuation contributions should not be offset against expected wage increases. 10: COMPULSORY SUPERANNUATION CONTRIBUTION INCREASE CAUSE/DRIVER/ENABLER CONSEQUENCE SOLUTION Lack of offset policy statement or legislation by government. ACTU statements that there should be no offset. Labour costs increased by amount of compulsory contribution increase – lack of recognition of superannuation as deferred salary and part of total hire costs. As government enacts to provide the proposed increase in superannuation contribution by employers, legislate specifically to offset against wage increases. Require FWA to take account of any compulsory increase in employer superannuation contributions when setting wages in terms of: annual minimum rates review low pay determinations arbitration where a bargaining period has been cancelled. APPENDIX 1: AUSTRALIA’S LABOUR STRENGTHS WEAKNESSES of supply and demand for labour Employment: the number of people employed has increased from 7.6 million in December 1991 to just under 11.5 million in 2011 Overall jobs growth weakened notably over the last year, with no net job creation from December 2010 to December 2011 (see charts), while ANZ data suggest job ads, a forward-looking indicator, have also softened over the last 12 months
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