This estimate, it said, was based on two key assumptions which show that middle-income Australians would be worse off.

“Our lifetime income projections adjust future incomes for inflation only — that is, we’ve allowed for the fact that a dollar in the future will buy less than a dollar today,” the institute said.

While proponents of lifting compulsory super insist it won’t come from worker’s wages, the evidence suggests, it said, that more super does mean lower wages.

“Compulsory super was originally created to forestall wage increases that could have sparked inflation. And workers appear to have paid for compulsory super via lower take-home wages,” the Grattan Institute said.

“That’s the view of the Henry Tax Review and the Parliamentary Budget Office. It’s also the view previously held by Paul Keating and Bill Shorten. And it’s exactly the position adopted by the Fair Work Commission in 2013 when compulsory super was increased from 9 per cent to 9.25 per cent of wages — minimum wages went up by less than they would have without higher compulsory super.”

Some have argued that even though past increases in compulsory super were paid from wages, an increase to 12 per cent today wouldn’t be, it noted.

“Such claims are difficult to square with concerns that workers’ weak bargaining power is one of the reasons for current low wages growth. If employers aren’t willing to give wage rises, why would they absorb an increase in compulsory super?” it said.

Grattan said even if 75 per cent of the extra contributions came from employers’ rather than workers’ pockets, workers would still go backwards.

The Association of Superannuation Funds of Australia (ASFA) has criticised the latest modelling by Grattan, stating that its analysis is based on “unsound assumptions regarding average earnings, working patterns, the future rate of the age pension, how the means test for the age pension works, and working Australians’ aspirations for a dignified retirement”.

ASFA chief executive Martin Fahy said the analysis incorrectly assumes that the 12 per cent would lead to a 2.5 per cent wage increase and that this would flow through to individuals in full.

“In reality, the increase in personal tax, withdrawal of family tax benefits and child-care subsidies would erode most of the increase, leaving people no better off in working life and worse off in retirement,” Mr Fahy said.

Mr Fahy said it also incorrectly assumes that increasing SG to 12 per cent would not make a difference to retirees.

“The data actually shows the opposite. For a person on $60,000 a year, around the median wage, the increase in the SG will boost eventual retirement savings from $299,000 to $368,000,” he said.

“This will boost retirement income from $38,900 a year to $40,950 a year, according to ASIC’s Moneysmart calculator, an increase of 5.3 per cent.”