National 3% pay cut in July?

Batgurl

Did anyone else hear this?

I've been told that the Govt has decided to increase everyone's Super by 3% in July from 9% to 12% which sounds great but that companies will have the right to remove this money from your wages without your permission...in effect a 3% pay cut.

Someone please tell me my housemate is talking crap and I'm not about to lose a couple of grand annually?

Xavi6

Quick question - did you google any of this before posting? It's all right there on the inter web.

http://www.savingsguide.com.au/your-super-contributions-will-increase-to-12-but-who-will-pay-for-it/

Batgurl

I'm asking the good people of Boards if any have heard official word from their HR department as even the Australian don't know the answer going off yesterday's article

http://www.theaustralian.com.au/business/opinion/super-rise-is-fine-but-wholl-pay-for-it/story-e6frg9if-1226308639074

hussey

Batgurl wrote: »

Did anyone else hear this?

I've been told that the Govt has decided to increase everyone's Super by 3% in July from 9% to 12% which sounds great but that companies will have the right to remove this money from your wages without your permission...in effect a 3% pay cut.

Someone please tell me my housemate is talking crap and I'm not about to lose a couple of grand annually?

Your housemate is talking crap.
it is .25% increase in July 2013 & employers pay it.
Also you link to the Australian which is a pay-wall article, so none of us can read it (and you cannot post any content)

Mellor

Batgurl wrote: »

I'm asking the good people of Boards if any have heard official word from their HR department as even the Australian don't know the answer going off yesterday's article

http://www.theaustralian.com.au/business/opinion/super-rise-is-fine-but-wholl-pay-for-it/story-e6frg9if-1226308639074

Read the link posted above. It's increasing to 12% over 7 or 8 years. It's still an employers contribution, the employer still pays it.

mandrake04

It's also worthwhile pointing out that the goverment is supposed to be reducing company tax for small business from 30% to 29% to help pay for the Super and also reallocation of the Super Mining profits tax to other business to help cover this.

But I agree with Hussey and Mellor it's a load of crap.

The last thing labor needs is to upset the unions.

Peregrinus

Super contributions are paid by the employer, not the employee, and the employer is not entitled to reduce wages to compensate.

Looking at the bigger picture, though, obviously if the amount of super employers are required to pay goes up, the cost of the total remunaration package has also gone up, and there is less scope for paying wage increases as well. Bargaining for pay increases is therefore more difficult.

There is some international research that suggests that when super contributions or similar requirements (e.g. social insurance contributions) are raised, it makes little difference in the long run whether they are nominally paid by the employer or the employee. Whoever pays it, within a year or two about half the cost will have been passed to the other party by adjustment to other elements of the remuneration package.

If that holds good in Australia, then of the 3% super increase that employers will be subjected to over the next few years, about 1.5% will be reclaimed over that period by barganing for lower pay increases than might othewise have been expected.