There has been some interesting articles recently, particularly by The Australian columnist Adam Creighton who has argued for changes to the compulsory superannuation system to make it a voluntary system.
In these circumstances an employ could elect to take the equivalent of the current 9.5% levy as salary or part thereof and make voluntary contribution at whatever level the employee deems fit.
There are a number of notable commentators such as Alan Kholer and Terry McCrann who see merit in this argument. Indeed in support of this British author Nicholas Morris has written a book, titled Management and Regulation of Pension Schemes: Australia-A Cautionary Tale, warning other countries to avoid a system of compulsory superannuation.
From the governments point of view conversion to such a system would be simple by simply allowing employees to complete an online form, print it, sign it and give it to the employer requesting some or all of their superannuation be paid as wages or salary.
This would have a significant impact, particularly for low income works as the potential wage increase would be closer to 10.5%. This is because employers are obliged to pay 9.5% of the total remuneration as superannuation.
In addition such a move would also stimulate the current stagnant wage growth as well as stimulating the overall economy through increased consumer spending.
Will it ever happen? Don’t hold your breath but as indicated the idea has significant merit.