Compulsory super for self-employed reventilated
Barely a month out from the Federal Budget superannuation funds have raised the issue of self-employed people being compelled into the superannuation guarantee (SG) regime.
A survey published by the Association of Superannuation Funds of Australia (ASFA) has suggested that 80% of respondents believed self-employed people should be brought into the superannuation system, including respondents who considered themselves to be self-employed.
The survey of members of superannuation funds conducted by ASFA found that 98% of respondents considered that the current coverage of compulsory superannuation was about right or should be extended.
Commenting on the survey, ASFA deputy chief executive, Glen McCrea said it had confirmed that Australians not only see the benefit of compulsory superannuation for employees but consider that all working Australians should be covered.
He said that while there was some capacity for self-employed workers to contribute to superannuation, only around one-fifth of these people actually did so.
“The upcoming Federal Budget provides an opportunity to bring the self-employed and gig economy workers into the compulsory superannuation system. Along with essential workers, they helped get Australians through the pandemic by delivering food and other key items and they deserve a decent retirement when the time comes,” McCrea said
He said the 2023 ASFA Member Survey also demonstrated that community expectations of spending in retirement were reflected in the ASFA Retirement Standard.
Around two-thirds of respondents considered that they would need annual expenditure consistent with, or exceeding, the ASFA Comfortable Standard to maintain their desired living standard in retirement.
In the 2022 December quarter, the ASFA Comfortable Standard annual budgets are $69,691 for a couple and $49,462 for a single person.
“Australians’ expectations of retirement are clear; they want to be comfortable and the move to 12% SG (Superannuation Guarantee) over the next few years will help more people to achieve that,” McCrea said
The ASFA super fund member survey was undertaken in February 2023. The survey size is around 400 people. The ASFA consumer survey was undertaken in January 2022. The survey size is around 1,000 people.
There has been continuous lobbying over many years to increase the amount and scope of super, to ensure greater financial wellbeing and reduced reliance on public welfare when workers retire. This lobbying has been largely successful, and led to a huge increase in super for most people. This proposal, which sensibly focuses on the sole trader exemption, is the latest in a long line of super strengthening ideas.
But what about the social problems of reduced financial wellbeing and greater reliance on welfare, when workers are sick or injured? Just as superannuation can solve the retirement problem, personal insurance can solve the sickness/injury problem. But there seems to be very little support for it. Quite the contrary. The media, so called “consumer groups”, and both sides of politics, seem hellbent on destroying personal insurance.