Quelle surprise! Businesses are just now expressing concern about the costs of the increase in the superannuation guarantee from 9 to 12 per cent. Where were the business lobby groups since this policy was proposed years ago? Catallaxy readers have seen this topic being discussed many times over the past two years. See for example: here, here, here, here, here, here, here, here, here, and here.
But it only seems now, at the 11th hour, that businesses are waking up to the full implications of increasing the superannuation guarantee.
Let’s face it, the business lobby groups are hopelessly conflicted. Heather Ridout, for example, was the head of the Australian Industry Group but enjoyed a position on the board of Australian Super. As has been noted in a number of Catallaxy blogs, Union leaders enjoy comfortable and well remunerated positions as trustees of superannuation funds.
This is the principal-agent problem writ large and in three directions. The Government is not representing the interests of taxpayers. Business lobby groups are not representing the interests of businesses. And Unions are not representing the interests of workers.
Now these cowboys – who have over invested in unlisted property trusts – want more money.
Increasing the superannuation guarantee is one of the worst and most destructive policies introduced by this government. As Judith has noted, it was not recommended by the Henry review. As I have noted, it would lead to people having higher incomes in retirement than during their working lives (if, that is, the funds have been wisely invested and earn a decent return – something that cannot be assumed over the typical working life of today’s younger workers).
The burden of the measure falls on the workers, increasing the cost of employing them and (other things being equal) a lower rate of employment growth. This is a job destroying policy.
Frankly, I’m appalled at this disaster of a policy. If Australia has a superannuation problem, it is because we have too much money tied up in superannuation.