There is a lot of debate about today on who pays for super – so I thought I’d link to an op-ed I had at the Drum last year.
The acceptance of compulsory superannuation relies on something called fiscal illusion. The burden of superannuation is obscured, leading many people to think they’re getting something for nothing – or very little. The illusion revolves around the fact that superannuation is an “employer contribution” – many people think superannuation is paid by employers and not employees.
Strictly speaking it is paid by employers – they write the cheque – but the burden of superannuation falls on the employee. Wages are reduced to the extent of the superannuation payment. So an increase in superannuation contributions means a reduction in take-home pay.
Of course proponents of superannuation don’t like that argument. They might point to the fact that wages have risen since compulsory superannuation was introduced and that wages are determined by a whole host of factors, and so on. All of that is exactly correct. Nonetheless superannuation is part of the total employment cost that employers have to bear and forms part of the total remuneration package that employees earn.