Cross-Party Support for Superannuation for Under-18s: A Historic Step Forward
A recent Senate report has recommended a significant overhaul to the superannuation system in Australia, advocating for the inclusion of under-18 workers. This proposed change has garnered support across various political parties, marking what many are calling a "historic step" for younger Australians.
Currently, the law stipulates that only workers under the age of 18 who work more than 30 hours per week for a single employer are entitled to superannuation contributions. However, the Senate Economics Legislation Committee expressed a desire to extend superannuation benefits to all under-18 workers, stating that they should receive super on “every dollar earned.”
Senator Lisa Darmanin, chair of the committee, highlighted that some large Australian employers, such as Aldi, Bunnings, and Priceline, already provide superannuation benefits to under-18 employees regardless of hours worked. This suggests a growing acceptance among businesses regarding the importance of superannuation for younger employees.
The necessity for reform has also been voiced by the Greens, whose members argue that the current rule is both outdated and discriminatory. Senator Barbara Pocock noted that many of Australia’s largest employers, including Coles, Woolworths, and McDonald’s, refrain from paying superannuation to young workers unless they meet certain hourly thresholds.
Senator Pocock stressed that the issue is not a matter of affordability for big businesses, as evidenced by companies like Bunnings and Aldi, who choose to contribute to the superannuation of their under-18 workforce.
Industry Reaction
The call for reform has been welcomed by industry super funds, such as Rest Super, which supports retail workers and other sectors. Rest characterised the cross-party backing as a “pivotal moment” and revealed that if the proposed changes were enacted, a typical 15-year-old could see their superannuation balance increase by an estimated $3,400 by the time they turn 18, and potentially amount to an additional $18,100 by retirement.
Rest’s general manager for public policy and advocacy, Enrico Burgio, urged the government to formulate a clear implementation plan. He acknowledged the need to consider the potential impact on employers and suggested a staggered rollout strategy to alleviate any concerns.
Furthermore, the Super Members Council, which advocates for profit-to-member super funds, reported that the current rules cost around 515,000 teen workers a collective $405 million in unearned superannuation this financial year. They have similarly advocated for the inclusion of domestically employed workers, such as cleaners and nannies, in the superannuation system.
The council asserted that it is unreasonable for some young workers to lose out on superannuation contributions due to their age or the type of work they perform, calling for swift action from the government to eliminate these discrepancies.
Conclusion
The proposal to extend superannuation to under-18s reflects a significant shift in the dialogue around youth and work in Australia. With broad political and industry support, the movement aims to ensure that younger Australians are not disadvantaged in their long-term financial futures. The government is now under pressure to act quickly to amend the current legislation and create a more equitable system for all workers, regardless of age.
As discussions continue, the emphasis remains on careful consultation and planning to successfully execute these critical reforms.
