Former Liberal party leader John Hewson has joined a host of notable industry names in calling for the legislated superannuation guarantee increase from 9.5 to 10 per cent – and eventually to 12 per cent – to go ahead as scheduled from July next year, rather than being postponed or cancelled due to the economic shock of the pandemic.
Speaking on an ‘Emergency Superannuation Summit’ hosted by the Australian Council of Trade Unions on Monday morning, Hewson said that using the current economic climate as an excuse for interrupting the SG schedule was “not defensible”.
“That’s not an argument, that’s an excuse,” Hewson said. “This is not a political issue, it’s not about political expediency or the Covid recovery… it’s about longer term strategic challenges.”
Debate about the fate of the superannuation guarantee has escalated since the pandemic started affecting businesses, employment levels and markets in March. Reserve bank governor Philip Lowe said allowing the rise to go ahead would hinder already-burgeoning unemployment figures, prompting prime minister Scott Morrison to say in August that the government was “undecided” on whether the scheduled rise should go ahead.
The government’s Retirement Income Review, completed but unreleased, is tipped to include an assessment of the viability of going ahead with the scheduled increase.
Hewson was joined on the webinar by former ACTU secretary Bill Kelty, as well as former Chair of AustralianSuper Heather Ridout and ACTU president Michele O’Neil. The online panel was rounded out by Per Capita executive director Emma Dawson and Sheree Clarke – an aged care nurse and essential worker who predicted her retirement would likely “end in poverty”.
The session – which did not include any lobbyists providing a counterpoint – was hosted by journalist Jamila Rizvi.
Kelty said the continuance of the SG rollout plan is a “dignity that is required in generations ahead”, and said the country will regret not taking the superannuation guarantee as high as 15 per cent.
“It is the extra security of people that is at stake here. Those dependant on the SG are the vulnerable people, if you don’t increase it then they’re at risk,” Kelty told the panel. “One thing is absolutely certain – the problem of ageing is not going away.”
The ACTU’s O’Neil said the issue should be “above” politics. “We simply can’t let older Australians retire and die in poverty,” O’Neil stated, adding that the idea that wages will go up if super stays down is a “myth”.
O’Neill pointed out that wage growth has remained relatively stagnant since Abbot government announced it would delay the scheduled increase above 9.5 per cent until 2021 in the 2014 federal budget.
“The government has a problem this time, because we’ve already seen this movie and we know how it ends,” O’Neil added.
Ridout implored the Morrison government to not “chip away” at the superannuation system. “Going forward we should be concerned with strengthening the system, not undermining it,” she said.
The role of the government was a continuous theme throughout the session, with Hewson in particular arguing that for the government to use Covid-19 as an excuse to halt the SG increase is political opportunism.
“The government is now finding any excuse not to do it,” Hewson said. “It’s a test for the government’s capacity to think longer term and strategically and whether they can stick with a reform agenda that’s clearly in the national interest. We need to stick with the job.”
Per Capita’s Dawson called the debate “hugely frustrating”, and agreed with O’Neil that using wage growth as an excuse to halt the scheduled increase didn’t stack up.
“The argument that super comes out of wages or leads to lowered wage growth is particularly spurious at the moment,” she said. “We’ve had no real wages growth for six years.”
Dawson sympathised with nurse Sheree Clarke, who said that as a low income, part-time worker she wouldn’t have enough super to live comfortably in retirement – a problem which has already been exacerbated by the existing delayed rollout of super increases.
“Overwhelmingly, the people that will benefit the most from an increase are those earning less than $75,000 and more of them will be women,” Dawson said.
Clarke said that while she loves her job, she couldn’t see herself working to age 70 because “it takes a toll”.
“My retirement looks like it’s going to end in poverty,” Clarke said. “You don’t feel valued, you don’t feel respected.”