News stories recently published in the media dubbed “Super Slug” and “Super Increases slowed under MRRT Deal” misrepresent the facts for most small employers. The increase in the employer compulsory contribution from 9% to 12% represents a significant increase in the cost of employing people to small business. In reality, one of two things would likely have happened as the increase crept upwards:

1.Pay rises that might have been asked for by employees would not have been given as take home pay. Rather, the employer would likely point to the increase in the compulsory superannuation levy as the increase for at least part of the employees wage.

2.The take home pay of employees might reduce.

The vast majority of employment contracts, particularly in the small to medium enterprise or SME space, are inclusive of the employer’s compulsory contributions to superannuation. I am not aligned to either side of politics and at times I despair at the lack of real leadership right across the political spectrum. The implication that the Government and/or the Palmer United Party have somehow disadvantaged employees is misleading, especially for those employed by SME’s. There are very few SME clients of mine that can afford a 3% increase in the cost of doing business without passing that increase onto their end consumer.

The statements referred to in the articles rely upon the mistaken assumption that an increase in the compulsory contribution to superannuation automatically equates to an increase in remuneration. That assumption is simply flawed when it comes to SME’s who, collectivley, are regarded as the nations biggest employer.Whilst the majority of commentators will bemoan the delay in the increase in the compulsory superannuation contribution to 2025 secretly, and sometimes not so secretly, SME’s will breathe a collective sigh of relief that the “can has been kicked down the road” until 2025.

Until next time,

Dan Hutchinson Managing Director – TEP; LLB (QUT); BBus (QUT)
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