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ISA calls SG increase delay a tax grab

Industry Super Australia says a failure to make the planned increase of the super guarantee to 12% compulsory is a "tax grab" by the government.

According to ISA, making the increase to 12% optional will result in the average Australian family paying $20,000 more in tax and losing up to $200,000 in super.

"Removing the guarantee in the super guarantee to make it 'optional' is a recipe for higher taxes, lower lifetime incomes, and a red tape nightmare for business," ISA deputy chief executive Matthew Linden said.

"The government should follow through on the legislated increase to 12% and not be exploring underhanded ways to renege on it."

"This isn't choice - it's a sneaky tax grab that will leave people worse off and rip up one of the system's founding principles."

Wages are taxed at a higher rate than super contributions, ISA said its analysis shows that up to two-thirds of an increase could be lost in higher taxes and reductions in other government support payments.

The statement from ISA is in response to an article published in The Sydney Morning Herald and The Age which alleged that the government has a "secret" plan to make the legislated increase to 12% optional.

The story was based off information from an anonymous source, but Liberal MP Tim Wilson took to Twitter to anticipate any backlash the idea might receive.

"Just wait for the shrill outrage that workers dare keep more of their own [money]," Wilson said.

"It's the sound of hogs being dragged away from a multi-trillion trough they use to pay themselves bonuses in the tens of millions at the cost of take-home pay [and] home ownership."

Read more: ISAIndustry Super AustraliaLiberal MP Tim WilsonMatthew LindenSG
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