Nothing super about changes to super

Upcoming changes to the superannuation levy will affect all businesses and the economy.

One of the hot issues for business at the moment is the increase to the Superannuation Guarantee Levy from 9% to 12%, which recently passed through Federal Parliament.

While the increase will be phased in between 1 July 2013 and 1 July 2019, it will still have a big impact upon employers.

Ai Group has already written to its member companies encouraging them to consider absorbing the increased superannuation contributions into the wage increases they would have otherwise paid, subject to meeting the minimum wage requirements of awards and the terms of any enterprise agreements.

We believe it is up to every company with an enterprise agreement to decide with their employees how the agreement will be drafted and what remuneration increases will be included.

However, we have suggested that companies consider including a Remuneration Clause in their agreement which includes the wage increases and superannuation contributions which will be paid during the life of the agreement.

Employment and Workplace Relations Minister Bill Shorten has responded to calls from Ai Group and other bodies, and expressed support for employers taking the increase into account in future wage negotiations.

The Minister's support is welcome, particularly when the unions have rejected absorption of the increase, despite campaigning for years for the three percent increase and arguing that it would be good for the economy.

Also, from the time when the increase was first proposed a couple of years ago, Ai Group has argued that amendments need to be made to the Fair Work Act requiring Fair Work Australia to take the increased levy into account when determining minimum wage increases.

This was the approach when the Superannuation Guarantee (SG) Levy was originally phased in between 1992 and 2002.

At that time, the federal workplace relations legislation included a section which required the Tribunal to have regard to the Superannuation Guarantee Levy when making national wage case decisions. A similar provision should be included in the Fair Work Act.

It is worth noting that when the Levy was first introduced it was at a time when Australia had strong productivity growth.

In 2012, our productivity is flat-lining as business battles the biting Australian dollar, weak domestic demand, rising energy prices, strong overseas competition and as they prepare for the introduction of the too-high carbon price.

Absorption of the superannuation increases into future wage increases is a sensible measure to reduce the impact upon businesses and the economy.