Taking away compulsory super for low income workers would not only undermine the very premise of Australia’s superannuation system, it would see vulnerable workers pay more taxes for less money at retirement.
Industry Super Australia (ISA) analysis shows that for a person on $50,000 a year, raiding their super guarantee contributions would increase their personal income tax bill by $1,710 a year - an increase of nearly $1,000 on the low tax they would otherwise pay in super.
Any claim that this would “save” $1.8 billion conveniently ignores the fact that wages are taxed at a higher rate than superannuation - meaning this would actually cost low income workers more in the long run.
This is a flawed plan that will see low income workers pay more tax for less money at retirement – while everyone will foot the bill as dependence on the pension increases.
*The above material, whilst correct at the time of publication may include references or statements which are no longer current.