The Federal Government must use its 2018-19 Budget to guarantee the further inclusion of hundreds of thousands of Australians in the superannuation system.
This is the key vision of the Australians Institute of Superannuation Trustees, who used their pre-budget submission to propose numerous policy steps the government should take to rectify the superannuation system.
The industry association said urgent solutions must be found to address the issue of unpaid super and the gaps in superannuation coverage.
"Our submission presents a solution aimed at reducing the gender gap, with a focus on improving unpaid superannuation, as well as providing an examination of areas of the economy where Australia's aren't capture as part of our superannuation system."
According to the AIST, unpaid superannuation has been identified as a significant problem affecting Australians, with recent estimates from the Tria and Cbus report suggesting that as many as 326,000 people (3% of the workforce) are affected through unofficial cash economy employees, as well as sham contractors. The report estimates that $1.1 billion is the amount of super lost.
Additionally, a number of groups including self-employed persons, domestic workers and disability services employees are still being excluded from the scope of the superannuation discussion, with AIST noting that the impact of the problem will manifest both in the future, with increased reliance on the Age Pension, as well as in the present, since there is an added complication that Australians without superannuation are also likely to be missing out on insurance coverage through their superannuation.
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In its recommendations to Treasury, the AIST recommends the removal of the $450 per month income threshold on the superannuation guarantee (SG), the recommencement of increases in the SG with a view to achieving 12% in July 2022, and expressed its opposition to a proposed increase in the age pension age to 70 years.
The association has also voiced its support of the ATO being made responsible for enforcing non-SG payments made through employers "under a regime that is for all intents and purposes identical to that which exists for SG amounts."
Lastly, AIST has put its support behind a Government-funded parental leave scheme that includes a superannuation component, linked to the payment of SG contributions required on average weekly earnings. The implementation of a paid parental leave scheme with a superannuation component, would allow parents to continue building their superannuation whilst on parental leave.
"The lack of such a superannuation component - coupled with the very low level of paid parental leave - adversely contributes to the gap between women and men's retirement savings,' the submission said.
"Paid parental leave schemes (coupled with superannuation) assist with improved workforce participation rates (particularly for women of child bearing age)."