Grattan modelling flawed, misleading: ISA

Phil Gallagher and Bruce Bastian said the average worker will receive around $50,000 more than the Grattan Institute's "flawed and misleading analysis."

ISA said modelling done by Grattan is based on dubious assumptions that "don't stack up" and there is little evidence to support claims that an increase in super contributions will result in an equivalent reduction in wages.

"There is no demonstrated equivalent trade-off between super and wages, and the small potential reduction that could exist is readily offset by the greater compound interest that will be earned on increased super contributions, which will result in much higher incomes in retirement," ISA said.

ISA chief executive Bernie Dean said the claims made by Grattan are based on a "fantasy world" that does not exist.

"What's not a fantasy is the impact cutting the super increase would have on people in retirement.  They would end up with less to support themselves and their family, while everyone would pay to support more people on the pension," he said.

"There is no Australian evidence to support claims there is an equivalent trade-off between wages and super. This clearly shows that if super increases, workers will end up with more money over their life - not less."

The new modelling suggests that an impact on wages would be offset by increases in the amount of person tax paid, as super is taxed less than wages.

Read more: ISAGrattan InstituteBernie DeanBruce BastianIndustry Super AustraliaPhil GallagherSuper GuaranteeTreasury
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