Shadow Minister for Financial Services Luke Howarth says the Coalition is committed to maintaining the Superannuation Guarantee at 12 per cent and has dismissed commentary that if elected it will slash the rate of super contributions to 9 per cent.
Speaking at the Advice Policy Summit, hosted by Investment Magazine sister publication Professional Planner in Canberra on Monday, Howarth said a Dutton Coalition government would not tamper with the SG.
“We’re at 11.5 per cent, so it’s not going to be 9 per cent,” Howarth said.
“It’s 11.5 per cent, going to 12 per cent [and] we don’t have an issue with it.”
Meanwhile, in his valedictory speech to Parliament on Tuesday, Minister for Financial Services and Assistant Treasurer Stephen Jones said some of the best achievements in politics are not the things that are started, but the things that are stopped.
“I was very proud to be a part of an opposition where I work with my friend, former Prime Minister Keating and former Prime Minister Rudd and the [current] Treasurer and the Prime Minister to stop this idea that we were going to freeze the superannuation entitlements of Australians at 9.5 per cent,” Jones said.
“It always struck me as crazy-brave for us to suggest that we [politicians] should collect 15 [per cent] but the mob should only get 9.5 per cent. At the end of June this year, all Australians will be receiving 12 per cent superannuation. That’s a damn good thing.”
Howarth’s comments to APS follow comments attributed to Nationals senators Matt Canavan and Llew O’Brien that workers should be allowed to opt-out of contributions to super above 9 per cent of their salary and receive more take-home pay.
A clear message from the APS has been that the so-called “super wars” between the profit-to-member and for-profit sectors of the industry are a thing of the past, with senior representatives from each side calling for greater co-operation and collaboration within the industry to address the issues facing all super fund members as they approach retirement.
With the hatchet apparently buried, the objective of superannuation enshrined in legislation and now a detente of sorts between the major political parties on the SG, the industry could be facing a period of relative serenity.
However, Howarth’s comments came as the Financial Services Council released new research showing most Australians do not trust either major party when it comes to taxing superannuation.
The research measures net trust in each party by subtracting the number of respondents who mistrust the party from those that trust it. Labor’s net trust rating was negative-13 (31 per cent trust minus 44 per cent mistrust), while net trust in the Opposition was negative-5 (34 per cent trust minus 40 per cent mistrust).
Net trust in Labor fell to negative-18 when its plan to increase taxes on super balances over $3 million was shared with respondents, while net trust in the Opposition was improved to positive-4 when its commitment to “protect Australians’ retirement savings from unfair new taxes” was shared with respondents.
The FSC said “an astonishing” 73 per cent of respondents thought it somewhat or very likely Labor will introduce further tax changes to superannuation if they are elected in the next federal election, and only 27 per cent thought it was unlikely.
Howarth told the APS that also contrary to some other commentary he “loves the Super Members Council” – the successor to Industry Super Australia and the Australian Institute of Superannuation Trustees – despite disagreement on key policies, “like super for housing”.
“We actually think that housing [value] pretty well doubles every 10 years, and that first-time buyers, helping them into their first homes where they can get up to a meeting $50,000 or half of what they’ve got in super to put down a deposit on their first home, and then if they sell it in eight years and make a capital gain, and that money goes back into super plus a share of the capital gain, we think that’s good thing,” Howarth said.
He said he did not believe the policy would put undue upward pressure on house prices given that the Opposition planned to reduce immigration.
Howarth said that prior to the Covid-19 pandemic the Morrison Government limited immigration to 170,000 a year and the Albanese Labor government “has ramped it up to 630,000 a year, and without new tradies we wonder why we’ve got a housing crisis”.
“There’s people throwing things around all the time, people on the back bench or whatever,” Howarth said.
“But whilst I’m there, every super fund has a guaranteed income, 11.5 per cent of everyone’s wage each week, that’s it.
“From time to time, we’ll do different things. Labor voted for early access to super during Covid. That was a time-to-time thing, once in 100 [or] 200 years.”
Howarth said that “apart from a few different policies that we’ve announced before an election, super is here to stay” under a Coalition government.
“We, the Coalition…also set up the scheme as existing right now, the first home super saver scheme,” Howarth said.
“Once again, Labor voted against that because they weren’t thinking about people they represented, and then [in] government, to their credit, left that in place.”
Jones used his valedictory speech to parliament to reflect on the philosophical underpinnings and the strengths of the superannuation system, as well as some of the issues that need still to be improved.
“Everyone knows how passionate I am [about super],” Jones said.
“I was there at the very beginning of it – I’m older than I look – [and] I’ve often thought and I’ve always puzzled on this: if you were a complete stranger to the history of superannuation, but you knew about the political philosophies of the Coalition and Labor, and you came here and you observed our system, you would probably form the conclusion that superannuation was established by the Coalition, because it’s an essentially liberal idea.
“It’s about self-preservation, and it’s about making a small contribution, on a weekly or fortnightly basis, to ensure that you aren’t reliant on somebody else when you retire. What could be more liberal than a philosophy of self-reliance?”
Jones said it has “always just driven me nuts” that there has been such a political divide on the issue of superannuation, when there should be strong bipartisan support when it is viewed in those terms.
“I think our economy is stronger, I think our society is stronger for it, and I’ve been very proud to work with my friend the Treasurer, to ensure that we’ve left the system stronger as a result of this term in government.”
Jones conceded that the system is not perfect and in particular super funds’ service standards are “just nowhere where they need to be, and they need to lift their game”.
“We need to do so much more to provide a better retirement experience, more retirement products and ensuring that that purpose of superannuation is seen through for the five million Australians who are either at or approaching retirement,
“But I’m proud to have been a part of a government that is delivering payday super. I’m proud to have been part of a government that is delivering on super on paid maternity leave with my colleague, Amanda Rishworth. I’m proud to have been a part of government that sees the importance of delivering and improving financial advice.
“I had a great conversation with our colleagues on the cross bench earlier about the importance of realising our commitment to ban genetic testing for access to life insurance. I say this in front of the Prime Minister; this is Labor government policy, and we will ensure that this is legislated.”
