Prime Minister Paul Keating established Australia’s superannuation system in 1992 to guarantee a fair and dignified retirement for all workers.
The current super guarantee sits at 9.5 percent of salary and is due to increase by 0.5 percent per annum from 2021 until 2025, bringing it up to 12 percent, which was Labor’s original design.
Coalition sabotage
In 2014, Tony Abbott’s coalition government postponed legislated super increases for seven years, until 2021. (Labor had legislated for increases of 0.5 percent a year from 2015 to 2019, when it would reach 12 percent.) At the time, Keating rightly described this as “wilful sabotage” of people’s retirement savings.
And now a group of Liberal MPs has again gone against the party’s official position and opposed the 2021 legislated increase of employer super contributions. They argue that increased super contributions will result in no wage rises.
The IEU supports the introduction of a 12 percent super guarantee that employers must pay. We reject the Morrison Government’s latest budget proposals, which would undermine industry super funds and erode the hard-won super savings of teachers and support staff.
Coalition claims are baseless
A report by the Centre for Future Work at the Australia Institute found no evidence that there is an “automatic and complete trade-off” between wages and super, and rejects calls from Liberal backbenchers to freeze the superannuation guarantee at 9.5 percent, or even to make super voluntary.
The Morrison government has also proposed changes that will favour for-profit funds such as those run by big banks, rather than industry-based super funds, with performance benchmarking based on net investment return rather than net benefits to members. Current benchmarking proposals exclude member administration fees, meaning the government proposals deliberately aim to mislead workers into thinking they are members of a well-performing super fund when they are not.
ACTU answers back
“The Federal Government’s superannuation reforms will short change workers and erode the hard-won retirement savings of millions of Australians,” ACTU Assistant Secretary Scott Connolly said.
“A worker could be locked into an underperforming for-profit fund that is funnelling money to shareholders through exorbitant administration fees – and be misled by the government that they are in a good fund.
“If these laws are passed, for-profit funds will have a systemic advantage over all-profit-to-member funds, leaving workers worse off.
“Despite the Banking Royal Commission finding for-profit funds blatantly rorting members, the government continues to favour them by making benchmarking based on net investment return,” Connolly said.