More than 4 months ago, the Morrison Government received a report containing no recommendations, but which concluded that our retirement incomes system is in good shape.
The review concluded that “the system is effective, sound and its costs are broadly sustainable” and also validated the role of compulsory superannuation in helping millions of Australians enjoy better standards of living in their retirement.
Prime Minister Paul Keating promised a 12 per cent superannuation guarantee in the 1990s. Modelling indicated this would allow a comfortable retirement. However, subsequent Liberal prime ministers have backed away from this target rate. The first planned increase was delayed by John Howard and then Tony Abbott did the same thing. As a side note, both of these Liberal Prime Ministers justified delaying the increases so that wages could increase. However, Australian employees have never received the promised wage increases.
Before the 2019 election, Liberal Party Prime Minister Scott Morrison promised Australians that his government would increase the superannuation rate. However, the recent report appears to justify Australian workers’ fears that the Liberals will use it as a stalking horse for more cuts or delays to superannuation.
The Prime Minister should keep faith with the Australian people and now rule out cuts to the legislated increases in the superannuation guarantee.
The report’s conclusions about the wages-super trade-off just do not stand up to fair-dinkum scrutiny given wages were historically stagnant after the last time this Coalition Government froze the superannuation guarantee.
I stress again, every Liberal delay has been accompanied by the promise foregone increases in superannuation will be offset by wage rises. This has never happened.
The Retirement Income Review comes as the ACTU released new research finding that “the greatest cost” of a cut to the promised Superannuation Guarantee rise “will be a generation of Australians who will be forced to either work into their 70s in order to have sufficient savings in retirement, or live in poverty.”
The Liberals cannot be allowed to use this recession as an excuse for more cuts to retirement incomes.
All Australians need to know what they will lose if Scott Morrison backs away from his election commitment. Freezing the increases in the superannuation rate would strip the average family of up to $200,000 in super at retirement! Such amounts can provide a dignified retirement and improve the quality of life for so many.
Many Liberals are calling for this delay. They ask Australians to believe a vague promise that employers will convert the foregone superannuation to a boost in pay-packets. Does anyone believe this will work for the overwhelming majority of Australian workers? Twice bitten, thrice shy!
If the legislated rise in the superannuation guarantee does not go ahead, most will receive neither a nest-egg increase nor pay rise! An analysis of more than 8000 workplace agreements that were made following the last freeze in the super guarantee in 2013 found no evidence of compensating wage increases.
In these uncertain times, workers need the legislated increase in the Superannuation Guarantee to help rebuild their retirement balances and deserve a decent pension that allows older Australians to live with dignity.