30 years of compulsory super in Australia
26 July 2022
5
min read
For 30 years, compulsory super has helped millions of Australians save for retirement.
The 30-year anniversary of the Superannuation Guarantee (SG), on 1 July 2022, coincided with some changes that may impact your super.
These changes include the Superannuation Guarantee rise to 10.5% and abolishing the $450 per month minimum earnings threshold for super payments.
To help understand the current state of super, and some of the latest changes, it’s helpful to look at how super in Australia has evolved.
History of the Superannuation Guarantee in Australia
Super aims to help you to be financially secure when moving into a post-work lifestyle and has been part of QSuper account-holder lives for more than 100 years.
The foundations for supporting Australians in retirement began with the introduction of the Aged Pension in 1909.1
It was in 1986 that the Australian Government, under Prime Minister Bob Hawke and Treasurer Paul Keating, joined with the Australian Council of Trade Unions (ACTU) to seek a universal 3.0% superannuation contribution by employers to be paid into an industry fund, in lieu of a wage rise for workers.
This accord was endorsed by the Conciliation and Arbitration Commission, which established a 3.0% employer superannuation contribution.
But it was the Australian Government led by Prime Minister Paul Keating that enacted the Superannuation Guarantee on 1 July 1992, which meant employers contributed to their employees’ super to ensure most workers had some form of superannuation.
The landmark reform, at the time, slated the SG to rise progressively over the next 10 years, to 9.0% of ordinary time earnings by 1 July 2002.
What 30 years of compulsory super means
The SG has helped millions of eligible Australians prepare financially to enjoy a secure and dignified retirement.
Understanding how super works may help ensure you’re well placed financially when you retire.
In a joint statement to mark the 30-year anniversary of compulsory super, Mr Keating and former ACTU secretary Bill Kelty, along with Australian Treasurer Jim Chalmers and ACTU secretary Sally McManus, said the reform was “an enduring win for working Australians”.2
As a result of compulsory super 30 years ago, an 18-year-old who started working in 1992 would have on average have around $182,000 in superannuation.2
They said the introduction of the SG had helped improve the living standards of Australia’s retirees, broadened and deepened Australia’s capital markets and contributed to the growth of the Australian economy.
Over the past 30 years, superannuation had grown from around $148 billion to more than $3.4 trillion held by around 16 million Australians.
Australia’s universal workplace right to financial dignity in retirement is unique to our nation and is the envy of the world,” the joint statement said.
1. Parliament of Australia, Chronology of superannuation and retirement income in Australia, accessed 1 July 2022, at aph.gov.au
2. Media Release, 1 July 2022, Australian Treasurer Jim Chalmers, Joint statement to mark the 30th anniversary of compulsory superannuation – Paul Keating, Jim Chalmers, Bill Kelty, Sally McManus, at jimchalmers.org