Retailers warn against Greens push to expand super for under-18 workers

The Australian Retail Council (ARC) has urged the Federal Government to reject the Greens proposal to remove the long-standing superannuation exemption for workers under 18 who work fewer than 30 hours a week.

The call comes as Treasurer Jim Chalmers has reportedly stopped short of either backing or rejecting the proposal. The Senate is expected to debate the measure later this week, as reported by ragtrader.

Costs under pressure

The ARC said retailers are already facing mounting financial pressure, including higher labour costs after the Fair Work Commission's junior pay rate increases took effect on Tuesday.

Chief Executive Chris Rodwell said removing the exemption would further increase the cost of employing young workers.

"Retail has given millions of Australians their first job," Rodwell said. "Businesses invest significant time, money and resources training young people with little or no work experience."

"If governments keep increasing the cost of employing young people without anything to offset it, the reality is that some businesses will choose to employ more experienced workers who require less training and supervision.

"That doesn't help teenagers looking for their first opportunity, and it doesn't help Australia's future workforce."

Greens defend proposal

The Greens argue the exemption unfairly denies hundreds of thousands of young Australians retirement savings despite them earning taxable income.

Finance, Employment and Workplace Relations spokesperson Senator Barbara Pocock said rising living costs had outpaced wage growth, making super contributions even more important for younger workers.

"This is deliberate exclusion of super for young people," Pocock said. "Robbing 515,000 young workers an estimated $405 million in super contributions in 2025-26 alone."

"A 16-year-old stacking shelves at Coles or Woolies or flipping burgers at McDonald's earns every dollar of their wage the same way an adult worker does. Their labour has value."

"The majority of young people (93 per cent) work fewer than 30 hours a week because of school and study commitments, meaning they miss out on super. That's unfair. Young people shouldn't be penalised for going to school or studying."

Business concerns

Rodwell said retailers were already absorbing a series of new costs, leaving little room for additional financial burdens.

"Retailers are about to absorb a 4.75 per cent wage increase, higher junior pay rates, Payday Super affecting cashflow, rising freight and fuel costs, escalating retail crime, the debit card surcharge ban and a growing mountain of regulation," he said.

"Governments keep adding new costs, yet there are no productivity gains, no meaningful reduction in red tape and nothing to help businesses absorb them."

He also warned that smaller businesses could respond by hiring more experienced workers instead of young people entering the workforce for the first time.

Jobs at risk

The ARC cited ASIC figures showing retail insolvencies are running almost 20 per cent higher than the same period last year, making retail one of Australia's hardest-hit industries.

"Consumer confidence is still near record lows, and retailers are doing everything they can to avoid passing higher costs on to customers," Rodwell said.

"Businesses can only absorb so much before something has to give. That means higher prices, fewer jobs, less investment or more businesses closing their doors."

Pocock rejected those concerns, arguing that age should not determine access to superannuation.

"Young people are working hard, paying tax and doing the right thing. They deserve every dollar they've earned, including their super," she said.

"Under 18s pay taxes and contribute to our economy, so why shouldn't they receive super?

"Whether they're 16 or 60-years-old, every worker deserves super, and should receive the same financial rights as everyone else whether part-time or full-time."

The Greens said they would continue pushing for the change when the proposal comes before the Senate later this week.