25 August 2020
ASFA: The Budget must address COVID-19’s impacts on employment by expanding FEG
In its supplementary Pre-Budget submission lodged with the government the Association of Superannuation Funds of Australia (ASFA) called for an expansion in the coverage of the Fair Entitlements Guarantee scheme (FEG) to cover unpaid employer superannuation contributions.
While the provision of JobKeeper payments to businesses that have experienced a downturn in revenue have kept many businesses solvent, once the JobKeeper program ceases there is likely to be a substantial increase in the number of insolvencies.
ASFA CEO Dr Martin Fahy, said: “The terrible combination of drained superannuation accounts through early release and dried up super contributions from employers can have a devastating impact on retirement savings.
“Superannuation contributions made by employers are an employee entitlement, just like wages. In the case of insolvencies or bankruptcies the government should step in and make sure that employees receive their due entitlements.”
With nation-wide reductions in employment disproportionately impacting on the young, ASFA maintains that the increase in the superannuation guarantee (SG) is now more important than ever and should continue as legislated.
To help all Australians achieve the best possible retirement outcomes and to support the strength of the Australian economy, ASFA proposes additional measures for Government to consider:
- committing to the legislated increase in the Super Guarantee (SG) to 12 per cent
- abolishing the $450 a month earnings threshold for the payment of the Superannuation Guarantee (SG)
- a six-step plan to cut red tape and improve productivity in the superannuation sector.
“We look forward to discussing each of these initiatives with Government,” concluded Dr Fahy.
For further information, please contact:
Jacqui Maddock, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.