Superannuation Guarantee Charge - why not 15%

[alexlee]

Super is a cost to the employer, period, whether it's part of your package or 'on top'.

If you increase costs to the employer, they'll either take a lower profit, or raise prices, or cut costs somewhere.

Whether an increase in super cuts into wages depends on market forces. If the labour market is tight enough, employers might cut costs elsewhere or take a lower profit. However, given that super is a direct employee cost, employers would more likely associate it with employee cost cuts via lower wage increases.

 

[BayView]

Don't Freakin' Start Me On This One!!!!!

As an employer, costs - especially wage costs - are my biggest headache.

And guess what; the whole idea of how clever it is that the Unions have gotten this concession on behalf of their constituents is a joke; it is simply passed on overall, and increases the cost of living to all Australians.

Yep; well done Unions and Gubbermint.

This is why vitually all our manufacturing except for mining (they can't move the Continent overseas) has moved offshore.

Paying 9% over and above my wage bill really pizzes me off; why can't the flamin' staff use their freakin' brains and save for their own retirement?

And some bright spark wants us (employers) to increase this amount?

Do you know how much extra profit must be generated per employee to cover this per employee cost?

Personally, I think super as an investment is cr@p, and you can bet your arze the Gubbmint will dip their fingers into it whenever they can; but if you have no investment skill at all, and no investments, then it's better than nothing.

I actually asked all my employees if they wanted to salary sacrifice into their super. I did this because every one of them is going to be a pensioner at retirement the way they are travelling. They are all financially hopeless.

Have a guess how many said yes to salary sacrifice?

Of course they would want me to pony up another 6% for them out of my turnover so they don't have to.

Anyone who thinks this is a good idea to raise the Guarantee is an idiot.

 

[gronk007]

I've got the solution - why don't we just abolish the SGC then if it's ******* that many people off?

As far as people being idiots...those on this post who think an increase in super is coming out of their pockets, they are the idiots.

Again, anyone who "negotiated" a salary package including super, instead of just their salary, is an idiot.

And no, super and payroll tax are EXACTLY the same thing, because they are a statutory cost incurred by the employer.

 

[gronk007]

As an employer, costs - especially wage costs - are my biggest headache.

Personally, I think super as an investment is cr@p,

Anyone who thinks this is a good idea to raise the Guarantee is an idiot.

1. If you think superannuation is such a crappy investment, I'd be more than happy for you to rollover your superfund into mine.

2. The way you speak of your employees...good luck as an employer. I'm sure with that attitude you're going great.

 

[Rolf Latham]

Anyone who thinks this is a good idea to raise the Guarantee is an idiot.

unless u are the recipient..............small employers already get skinned enough by various levels of gov.

 

[Corey Batt]

I understand the need for the gradual increase to 12% guarentee, however it should be done through reduced pay increases to cushion the blow on business. At this percentage with governmental policy enforcing the denial of pensions to individuals who held a super amount of x at retirement, would allow for far superior limitation to an expanding welfare system, it should reduce the levels after the baby boomer generation moves on. Then tax cuts.

 

[BayView]

1. If you think superannuation is such a crappy investment, I'd be more than happy for you to rollover your superfund into mine.

2. The way you speak of your employees...good luck as an employer. I'm sure with that attitude you're going great.

1. I only put into my super the compulsory minimum for my wage, so you probably wouldn't want my total. I trust you have assets other than super.

2. You know exactly zero about me as a person. Here's one thing about me you can know; I'll tell it like it is.

My employees are great, I like them and look after them because I want to keep them. They are very competent in their field of expertise, but it doesn't mean they can't still be hopeless financially. As are many, many people.

One of my employees is 61, and is still renting. His knowledge is terrific, and he is a great bloke. He has been a mechanic for about 45 years. If you can't amass a bit of wealth in that time (even a PPoR) then I'm sorry, but you are hopeless financially.

Yeah; you could say he had some and lost it all etc, but he hasn't. He has spent the lot.

I am trying to help them, but - as was the point of my post earlier - they don't want to be helped; as is the case with a large proportion of our society.

This is why the Gubbmint has had to bring in spoonfeeding the whole Country with a super guarantee - to save them in retirement, and cost both me and YOU more money.

 

[BayView]

unless u are the recipient..............small employers already get skinned enough by various levels of gov.

Agreed Rolf; the recipients think it's a great deal. "WOOHOO! Give me more, you greedy employer."

I am a recipient too; my company pays me and my wife a wage every week and we both get the 9% super on top.

But this recipient thinks it's a joke, and as you say; it is skinning ALL business in this Country.

 

[BayView]

I've got the solution - why don't we just abolish the SGC then if it's ******* that many people off?

I would love it - but I'm an employer.
The problem is though; if we abolish it, we will end up with a larger pool of pensioners and people living on the breadline than we already do.

What I see happening every day is this; many people, because their super is now being provided for them by their employer, adopt the mindset that they are now being looked after for their retirement by someone else.

They are now free to spend everything and not have to plan or worry about the future. And they will. Of course; there will those who are smarter and will make their own fate, but not enough of them.

If we increase the SGC to 15%, this will only further cement this mindset into the culture - the same way the 401k did in the USA, when it was provided by the Company you worked for.

I can promise you that the masses - if given 15% on top of their wage - will see it as a green light to not have to plan for their retirement.

As far as people being idiots...those on this post who think an increase in super is coming out of their pockets, they are the idiots.

I am an employer, and I can tell you that the SGC is coming straight out of my (business's) pocket.

Actually; it is coming out of my customer's pockets indirectly, and this is being given back to them in higher prices for their consumption of all things where wages for employees are involved.

 

[Corey Batt]

A big problem I find is that people think that their super will give them a life of luxury at retirement. Talking to a colleague from my workplace who has no intention of buying a house, spends entire pay each week, lots of personal debt, he stated that its ok because he will have lots of super. When I informed him that even if he had the 9% over the course of his entire working life, it would equate to LESS than half his current wage, the dread set in.

This is the same unfortunate guys whose eyes lit up when talking about wage inflation resulting in around a 50% pay rise over the next decade. He didn't realise that it also meant a large increase in the costs of living. Ho hum.

 

[Aaron Sice]

9% is plenty. 5% is plenty. anyone that reckons it should be more should ask why they have to work so much overtime - it's probably because your employer can't afford someone else.

seriously - you should be setting yourself up.

not relying on what is basically a "pension handout mentality" as the govt moves the responsibility for the "pension" from itself to private enterprise, doing nothing to abate the serious sustainability issues of this approach.

compulsory super is the worst idea ever.

 

[dan c]

I agree with what people are saying about people saving for their own future, but in reality, it's not gunna happen. What happens this month if Joe Sixpack needs a replacement part for his car. Does he get it, or does he put that money away for his retirement in 30 years? The majority are not good savers or planners, and couldn't (or won't) plan for their future.

If there was no compulsory super, we ALL would be paying higher taxes in the longer term to pay for the increasing numbers of aged pensioners. The numbers of those on an aged pension is set to increase markedly in the next 15 to 20 years. If they were all reliant on the pension, the minority left in the workforce would be paying for it through higher taxes.

Pick your poison...

 

[Aaron Sice]

I agree with what people are saying about people saving for their own future, but in reality, it's not gunna happen. What happens this month if Joe Sixpack needs a replacement part for his car. Does he get it, or does he put that money away for his retirement in 30 years? The majority are not good savers or planners, and couldn't (or won't) plan for their future.

If there was no compulsory super, we ALL would be paying higher taxes in the longer term to pay for the increasing numbers of aged pensioners. The numbers of those on an aged pension is set to increase markedly in the next 15 to 20 years. If they were all reliant on the pension, the minority left in the workforce would be paying for it through higher taxes.

Pick your poison...

you live in the land of no pension.

people seem to do just fine there. family look after family or they set themselves up for retirement.

 

[wobbycarly]

I am trying to help them, but - as was the point of my post earlier - they don't want to be helped; as is the case with a large proportion of our society.

This is why the Gubbmint has had to bring in spoonfeeding the whole Country with a super guarantee - to save them in retirement, and cost both me and YOU more money.

Aren't these the same people who will be renting our IPs?

 

[BayView]

Aren't these the same people who will be renting our IPs?

Hell yeah!

 

[Corey Batt]

My partner was playing a sim game wherein you build a roman city and it contains all facets of a micro economy, with small businesses, housing, slaves etc. She made the city real pretty and ended up creating such wealth for all the populace that they all had wonderful houses and serveants. Then it all started to decay and she couldn't work out why. I looked over the city, the problem was all the street cleaners, butchers, farmers, soldiers - they were now all those rich well to do people who no longer needed to work, so the society collapsed. At that point my partner had a real world realisation of the need of the poor - to sit there and be exploited for us well to-dos.

Whilst in a wonderful world a compulsory guarantee shouldn't be needed, in a pragmatic sense it is impossible to think that the entirety of the population will look after themselves by planning a self funded retirement. Instead it would result in a much higher revenue bill through a bulging welfare system, increasing taxes, gouging the pockets of everyone and limiting spending capabilities - two things which also hurt business a lot.

Then there is the suggestion of no pension safety net - Read 'reliance upon family' as intergeneration inefficiencies draining the purchasing power of the entire population.

Life is one big cost - benefit analysis, so why don't we all stop trying to be absolutists.

 

[imonmyway]

In singapore they have 20% employee contributed and 10% employer contibuted the 20% portion can be used to by a house and for medical. Not the perfect system as the government controls all the money.

 

[jaycee]

My partner was playing a sim game wherein you build a roman city and it contains all facets of a micro economy, with small businesses, housing, slaves etc. She made the city real pretty and ended up creating such wealth for all the populace that they all had wonderful houses and serveants. Then it all started to decay and she couldn't work out why. I looked over the city, the problem was all the street cleaners, butchers, farmers, soldiers - they were now all those rich well to do people who no longer needed to work, so the society collapsed. At that point my partner had a real world realisation of the need of the poor - to sit there and be exploited for us well to-dos.

Whilst in a wonderful world a compulsory guarantee shouldn't be needed, in a pragmatic sense it is impossible to think that the entirety of the population will look after themselves by planning a self funded retirement. Instead it would result in a much higher revenue bill through a bulging welfare system, increasing taxes, gouging the pockets of everyone and limiting spending capabilities - two things which also hurt business a lot.

Then there is the suggestion of no pension safety net - Read 'reliance upon family' as intergeneration inefficiencies draining the purchasing power of the entire population.

Life is one big cost - benefit analysis, so why don't we all stop trying to be absolutists.

Agreed, sometimes we are too idealisitc and unrealistic.... the reality is what the reality is whether we like it or not - to deny this and go on about how unfair things are, is not really to different to the "victim mentatlity" etc we accuse others of having.....

 

[kum yin lau]

Hi, does anyone know if salary sacrifice requires 15% contribution tax?

KY

 

[marg4000]

Hi, does anyone know if salary sacrifice requires 15% contribution tax?

KY

Yes. So if your salary sacrifice $100K then you get $85K nett credited to your account.
Marg