Compulsory Super finally gets to 11%

Compulsory Employee Superannuation rises from 10.5% to 11% for paydays after 30 June 2023.

The Keating Government’s Superannuation Guarantee, introduced 31 years ago, was a master stroke in structural economic reform. Paid by the employer and starting at 3% of Ordinary Time Earnings, it was always scheduled to escalate to 12%, but that has taken much longer than planned due to a number of Liberal Government “pauses”.

What made the SG so clever is that it addressed a number of problems simultaneously with an agility that could only be Keating’s:

• The ALP’s Union masters achieved a remuneration increase for their members;

• Australia’s critical lack of National Savings was addressed;

• The Commonwealth’s terrifying liability for Baby Boomer pensions was mitigated by increasing self-funding;

• It only offended company and small business people who probably didn’t vote Labor anyway;

• And all of the above without triggering another wage/price inflation cycle.

It would, I think, be fair to say that the robustness of the Australian economy and our high standard of living owes a lot to Keating’s Superannuation Guarantee of 1992.

From 1 July 2026, the current quarterly remittance of SG contributions will be replaced by “Payday Super”, which will require contributions to be made on each payday.