‘Government attacks on super deliberate and calculated’: Labor

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Shadow treasurer Jim Chalmers has foreshadowed that the government will scrap the legislated increases of the superannuation guarantee from 9.5 per cent to 12 per cent by 2025, as it pursues “a dangerous ideology”.

Addressing an Association of Superannuation Funds of Australia (ASFA) conference earlier this week, Mr Chalmers explained that the government was trying to frame the need to scrap the increase as a way to boost wages, but that was clearly not the case.

“Attacks on super are as deliberate and calculated as their [the government’s] attacks on wages,” Mr Chalmers said. “We are dealing with a Liberal Party that is going down a spiral of dangerous ideology and extreme partisan envy, taking workers’ wages and super with it.

“No governing party which genuinely believes in super would undermine it so frequently. No party governing in the interests of ordinary Australian working families would do so much damage to retirement incomes.”

Read more: Cutting super would result in massive tax hike

Mr Chalmers said trying to paint a picture of workers having to choose between higher wages or an increase in the superannuation guarantee ignored the fact that wages growth and retirement incomes had both been inadequate for many Australians for too long.

He also pointed out that the recent freeze to increases in the superannuation guarantee had contributed little to wages growth.

“In the six years before the government froze the super guarantee in 2014, wages grew at about 3.3 per cent, but in the six years since, wages growth has averaged barely 2 per cent,” Mr Chalmers said. “The last super freeze didn’t spur wages growth.

“Under this government, now in its eighth year, wages have hovered around record lows – the longest period of sustained low wages growth in Australia’s history. Meanwhile, too many people are retiring without sufficient savings to live on.

“If wages had not been so weak since the 2014 super freeze, then the average 30-year-old could have an extra $40,000 in super when they retired.”

Read more: Calls to tax retirees’ super income

Mr Chalmers referenced former finance minister Matthias Cormann’s comments that low wages growth was a deliberate design feature of the government’s economic architecture, and showed their true intentions were not about achieving higher wages.

“The Morrison government should stop pretending another super freeze is about higher wages instead of higher super, when the truth is they want neither and they have form on both,” Mr Chalmers said.

“Instead of developing a plan to boost wages and retirement incomes at the same time, the government wants to undermine both, by framing it as a simple but fundamentally false choice.”

Read more: Super funds go to war with the government

Last week, actuarial firm Rice Warner released a report detailing how not proceeding with the planned superannuation increases would lead to Age Pension costs blowing out by $33 billion over coming decades.

Minister for superannuation Jane Hume recently called on retirees not to plan on more government support, but instead manage their own money more efficiently and access the capital in their home in order to ensure a more comfortable retirement.

The government’s Your Future, Your Super changes were also introduced into parliament on Wednesday.

These changes aim to reduce waste in the system by having super accounts follow employees when they move between jobs and introducing an objective performance test for superannuation products.

The legislation has been heavily criticised by Industry Super Australia (ISA), with claims it would allow ‘dud’ retail funds to cream $10 billion a year from Australian workers.

Do you think the government will scrap the legislated superannuation guarantee increases?

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Written by Ben

7 Comments

Total Comments: 7
  1. 7
    2

    Politicians super should be cut to 9.5% (effective immediately) like everyone else with no pay rise adjustment if the increase for everyone else doesn’t go ahead, after all it was a promise and legislated.
    The early access to super was the dumbest decision any government has ever made.
    We know of people that have accessed their super not for hardship but for weight loss surgery and housing deposits. It was an initiative by the government to save money and encourage the public to spend their future retirement savings which is all going to come crashing down big time in the future but will help the Liberals win the next EARLY election (this year) as next year the outlook for the economy is gloomy.
    To the people that say the Liberals are the only party that knows how to manage money WAKE UP have a look at our National Debt and a Super system that is always getting fiddled with!!

  2. 7
    0

    “Do you think the government will scrap the legislated superannuation guarantee increases?”

    What has been overlooked in this article is that the super increases are legislated which means that any change to legislation has to be approved by the parliament. Such changes need the support of both houses and the government doesn’t have a majority in the upper house so changing the legislation is not guaranteed.

    • 2
      1

      I agree and labor can’t talk . They would have ruined self funded retirees retirement if they were elected into government and now they are spreading unfounded rumours.

  3. 3
    0

    The ideology of spend now and play later is never a good idea for anyone. If this concept is advocated by a government of a particular party, a number of issues would be raised as follows: –
    1. Will the increase in wages now has the propensity to increase the wealth of the current economy?
    2. If it does increase the wellbeing of the economy, the industries would benefit most are housing, vehicles, foods, travel, and may be some luxury items. Would these helps the Health and Education systems, Age-care and Old-age Pension for a better future?
    3. If it does not increase the wellbeing of the economy, why bother to even think about it. The wage level is already too low now to think along this line.

    When I retired nineteen years ago, the first thing I noticed on my retirement, I don’t have a regular income anymore. I have to depend on my savings and a small sum from my allocated pension in the superannuation to survive. While I cannot speak on behalf of anyone, I certainly do want to pay back what I spent when I was younger. I don’t want to struggle when I am old. No-one will look after me. The way the Government is going, I don’t think it will take care of me, either. Very Sad, that is all I can say.

  4. 2
    0

    Well in my case we were told last week there would be no wage increases (again) this year. In the over 10 years I have worked here I have only had 2 (TWO) pay increases and for a few years we didn’t even get cost of living increases. So regardless of who in Government, we have not been getting pay increases. What makes Mr Chalmers think his side does any better? Talk is cheap after all and his side doesn’t have a great track record either.

    For years we have been told that relying on the compulsory super is not enough to see you through retirement and that we should be saving 15%. And increases to super have already been stalled for a few years. Ok then. So why now the claims that the long-promised (AND LEGISLATED) increases may not go ahead at all? Yes yes, I know times are hard, but if you want people to spend, you have to give them something to do it with! And super is NOT Government money it belongs to the person who earned it!

    I agree the whole super/retirement funding issue needs to be addressed but interfering with compulsory super will not result in people making their own arrangements. They will simply spend everything they earn then expect to retire on the taxpayer.

  5. 2
    2

    No wonder Labor is yelling from the rooftops as its affects their industry super and campaign funds.

  6. 1
    2

    Scomo keep your sticky fingers off my super, it’s been hard earned and entitled to be used by ME, not you and your bludger mates.


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