New ACTU president Michele O’Neil said there is still much work to be done to ensure that superannuation is delivering dignity to everyone.

Addressing the CMSF conference last Thursday, O’Neil argued that women still retire with less savings than men. “Today we retire with 47 per cent less than men. The $450 a month minimum threshold disadvantages women who are far more likely to work part-time and fall below that threshold. It is archaic and should be abolished.”

O’Neil, a long-serving secretary of the textile workers union, also pointed out that women are financially punished in many ways for the time they take out of the workforce. She said they were financially disadvantaged for the time they invest in having and caring for children, those with disabilities and their elderly.

“One of the most insidious forms of this punishment has been the withholding of superannuation contributions on paid family leave. We have been proud to campaign to change this and pleased to see the Labor Party, under Bill Shorten, commit to extending superannuation to paid family leave.”

She told CMSF delegates that women are doubly disadvantaged with low balances and low incomes that mean their effective tax rates are higher on super and proportionally higher than those of high-income earners with huge balances.

“The coalition government freeze on increasing the super guarantee must be scrapped. We cannot afford another generation that retires with inadequate superannuation simply to help Scott Morrison play anther pea and thimble trick with the Commonwealth budget.”

O’Neil listed the mistakes she claimed were made by the federal government. These included scrapping the Labor legislated increases to the superannuation guarantee in just 3 short months on the 1st of July this year.

“We would have reached 12 per cent,” she added.

“Instead superannuation is languishing at 9.5 per cent in the midst of a seven-year freeze which started in 2014 and continues through to 2021. [This was] followed by a five-year crawl to 12 per cent in 2025 and no schedule to reach 15 per cent.”

She warned conference goers that this will have an unacceptable negative impact on the retirement income and lives of working people. “It is simply too slow. In the words of Paul Keating: ‘there’s only one future fund, that’s superannuation’.”

During her speech, the ACTU president argued the retirement age must not be lifted to 70 and should be restored to 65.

“Anyone who wants to advocate for higher retirement ages should spend three months on a factory floor, do a month of 12 hour shifts as a cleaner or break concrete for a summer and a winter before they are allowed to open their mouths.”

Rather than seeing superannuation as a replacement for the aged pension, O’Neil urged her audience to ensure the aged pension keeps the country’s elders out of poverty and that its super system lifts them into a comfortable dignity.

She also pushed the view that super funds need to ensure that the companies they invest in are focused on the long term.

“We have a responsibility to ensure that the ‘S’ in ESG is at the forefront our minds,” she told the conference.

“Just as it is right to say we must consider the risks of investing in assets that are potentially stranded by the loss of their social license… we are also right to consider the impact of investing in assets that become stranded due to the treatment of their workers as the communities’ expectations change and exploitation is exposed.

“Companies take stands on workers’ rights all the time: Sometimes seeking to improve them, often seeking to undermine them. These are overt risks to the capital of workers and should be part of our considerations when making investment decisions.”

 

 

Elizabeth Fry has been a financial journalist for more than 25 years and has written for a number of publications, including CFO, The Financial Times and The Australian Financial Review.
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