Keating blasts ‘monkeys’ on super

29 Jul Keating blasts ‘monkeys’ on super

ADELE FERGUSON & ERYK BAGSHAW – The Age – Monday 29 July 2019

Former prime minister Paul Keating has lashed government MPs lobbying for a delay in the increase of the superannuation guarantee as “monkeys” and described the prospect as “grand theft”.

In criticisms echoed by the nation’s biggest retirement fund, AustralianSuper, Mr Keating also argued it was highly unlikely employers would use any delay of the guarantee to pay higher wages.

The Morrison government has faced mounting internal pressure to consider delaying or dumping the legislated schedule for increases in the rate on mandatory superannuation from 9.5 per cent to 12 per cent by 2025 or even consider dumping the compulsory savings regime for lower-income earners.

Mr Keating, whose government introduced the superannuation guarantee in 1992, said the impact of holding back the increase dwarfed the controversial franking credits reform Labor took to the last election.

“It is a monster retirees tax and it is grand theft of super,” Mr Keating said.

“This is a debate about the future of the Australian economy. What’s under attack is the big picture from these monkeys in the back bench.”

One of the leading Coalition critics of the superannuation system, Liberal senator James Paterson fired back at Mr Keating.

“I hope Mr Keating and the Labor Party do not allow ego and ideology to blind them on superannuation,” he said.  “They should put workers’ best interests first and dispassionately consider any recommendations from an evidence-based review of our retirement incomes system.”

Another Liberal MP said the scheduled rise in the super guarantee from 2021 and the Productivity Commission and banking royal comission’s findings had created “the perfect storm” for criticism of the system.

“Keating always tries to turn it into something that it’s not and that’s ending compulsory superannuation,” he said.

Senior government ministers are not opposed to having a debate on whether the guarantee should rise as scheduled, but believe politically it is better to wait until the retirement income review begins by the end of this year. Prime Minister Scott Morrison last week warned backbenchers to stop voicing their concerns publicly.

Mr Keating questioned whether employers would use any potential delay to pay higher wages.

“They would be not only paying no real wages and letting the companies simply pocket all the productivity, but more than that, they would actually be robbing working people of 2.5 per cent promised to them by the Parliament,” he said.

“The wickedness is profound.”

A recent Productivity Commission review of the superannuation sector found a lack of transparency and a tolerance of underperformance while the Hayne royal commission also highlighted governance and regulatory issues.

Mr Keating said it was positive that Mr Morrison and Treasurer Josh Frydenberg had swiftly declared there were no plans to change the legislated increase in super, but that they needed to rule out including the super guarantee in the terms of reference of the retirement savings review.

“It would be a sleight of hand of ginormous proportions, if such a review included that,” he said.

Treasurer Josh Frydenberg has confirmed the review will include an examination of the scheduled rise.

Mr Keating said commissioner Kenneth Hayne’s final report was “huff and puff” that had failed to deal with problems in the sector particularly with retail funds and the trustee system that was supposed to safeguard member interests.

“He [Hayne] huffed and puffed and blew no house in,” he said.

“He left trustees sitting there. He wasn’t prepared to do anything.”

Mr Keating said there was a need for a separate superannuation regulator given the Australian Prudential Regulation Authority had demonstrated it was not up to the task.

AustralianSuper chief executive Ian Silk said those who argued the planned increases should instead be paid as wages could not explain how this would occur.

“Do we really expect all employers to provide an extra pay increase if they’re no longer required to make the legislated super payments?” he said.

“For most workers this is not about more super or a pay rise; it’s about the super increase or nothing.”

Mr Keating said the increase was needed to take account of longer life expectancy. According to work Mr Keating said was done by the Parliamentary Budget Office, the average Australian taxpayer had already lost $100,000 in super due to previous delays from former governments.

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