Retirement

Nurses and midwives’ super is under attack

August 10, 2020 by Rayan Calimlim 2 Comments

The Federal Government is threatening to use the cover of coronavirus to ruin your retirement.

Since the union movement and workers won employer paid superannuation the Liberals have been out to destroy it. Union members fought for superannuation to be paid on top of our wages because all workers should retire with dignity. Compulsory, employer-paid superannuation is your passport to a dignified retirement, and it is essential that the superannuation guarantee rises to 12 per cent to get that.

Next year, on 1 July, your superannuation will go from 9.5 per cent to 10% without having to do a thing. And by 2025 it will reach 12 per cent. This will add thousands of dollars to your super balance by retirement, which will make a huge difference to your quality of life.

Over the next couple of months, you will hear Liberal politicians, economists, and big business bleat about how super will cost wages or jobs or both. They tried this on us in the 80s and 90s when we won super – workplace by workplace, industry by industry. They tried this on us when we won paid parental leave. And they said that cutting penalty rates for workers would create jobs. But they were wrong every time.

Now they want to cut super and cancel the already legislated increase of super. And the price of them winning is your dignity in retirement.

Super is not perfect and there are things still to address. Women, at the moment, retire with 47 per cent of the superannuation of men, on average. And women over 50 are the fastest growing group of homeless people in Australia. There are real and growing barriers which women face in getting a good retirement. The $450 threshold, that superannuation isn’t paid on parental leave, and super isn’t paid to ABN workers means that women retire with less.

This Government have thrown everything and the kitchen sink at industry super funds, they directed a Productivity Commission inquiry into industry funds, asked the Royal Commission to look into industry funds and are running a parliamentary inquiry trying to tie up industry funds resources. At each test, the industry funds workers built have come out on top. Industry funds perform better and are better run than the scandal-plagued banks and for-profit super funds.

The way we fix this is by reinforcing super, not tearing it down. I haven’t met a single worker near retirement who has said they wish they had less super. Not a single worker is better off by cutting super. We need to reform super to ensure every worker retires with dignity.

Sign this petition to call on the Government to stop their plans to ruin workers’ retirements.

“Untold hardship for hundreds of thousands”: Morrison’s retirement poverty legacy

August 5, 2020 by Rayan Calimlim Leave a Comment

Australian Unions have described the Morrison Government’s superannuation withdrawals scheme as a “reprehensible attack on the retirement savings of working Australians”.

In a statement, Australian Unions Assistant Secretary Scott Connolly savaged the scheme, indicating that the long-term poverty created by the move will be “the greatest legacy of this Government… causing untold hardship for hundreds of thousands of people.”

The Morrison Government’s scheme allowed Australians who were economically affected by COVID-19 to access some of their superannuation, to a maximum of $20,000 between the 2019-2020 and 2020-2021 financial years.

“The scheme is having a disastrous impact on the retirement savings. A 25-30 year old who withdraws $20,000 over these two years will be $79,000-$95,000 worse off by retirement”, Mr Connolly said.

“The scheme shows that the Morrison Government has not done enough to support working people, and has instead decided to force people to sacrifice their retirements”, he added.

To date, 2.5 million Australians have raided their super through COVID-19, with almost 500,000 people emptying their accounts.

This has led to over $27 billions dollars being withdrawn from superannuation coffers.

Don’t delay the Super increase

July 27, 2020 by Rayan Calimlim Leave a Comment

Nurses and midwives stand to lose thousands of dollars a year in retirement income if the Morrison government freezes the superannuation levy.

Is the Morrison government about to take an axe to the retirement savings of workers, including nurses and midwives?

A group of 10 Coalition federal MPs has urged the government to delay or cancel scheduled increases to the compulsory superannuation levy.

They claim employers cannot afford an increase due to the coronavirus pandemic.

Those MPs get superannuation of 15.4 per cent on top of their parliamentary pension and other post-parliamentary benefits.

For the rest of us, superannuation is due to rise from 9.5 per cent to 10 per cent in July 2021 and 12 per cent by 2025.

Freezing the levy at its current rate would cost a 30-year-old worker earning $40,000 a year about $10,000 less each year in retirement, according to former Labor prime minister Kevin Rudd.

Rudd said the Liberal Party was “softening the electorate up” for a superannuation freeze even before Covid-19 struck.

He pointed out that the government commissioned a former Liberal government staffer, Mike Callaghan, to head an inquiry into retirement incomes. Callaghan’s report was due in late July.

The public intervention by 10 Liberal MPs “dispelled any doubt as to the strategy” Rudd wrote in the Sydney Morning Herald.

“You simply do not get one-in-five backbenchers speaking in unison like that unless it has been authorised by the leader, especially when the group includes a gaggle of ministerial aspirants,” he said.

“Using the bushfires and pandemic as political cover, Morrison is determined to fulfil the Liberal Party’s long-held desire to freeze the compulsory super guarantee levy at its current 9.5 per cent rate.”

Pandemic political profiteering

ACTU Assistant Secretary Scott Connolly described Liberal attacks on superannuation as “pandemic political profiteering”.

“If the Liberal Party’s only solution to the problems of the pandemic is to raid people’s super, then they’ve clearly run out of ideas,” Connolly said.

“These backbenchers need to be put in their place by the Morrison government, and workers need to be given reassurance that their retirement savings will go up as currently legislated.”

Until the late 1980s, only high-income earners and public servants enjoyed decent superannuation. Most workers – including almost all women – had no super at all.

From the late 1980s, unions began to win superannuation as a part of enterprise and award bargaining.

Unions set up industry super funds such as Hesta to look after the retirement savings of their members.

In 1992, the Keating Labor government introduced a com-pulsory superannuation levy as part of a tripartite agreement between the government, employers and the unions.

The Liberals opposed any levy.

Labor planned for the levy to reach 15 per cent but the Howard government halted it at 9 per cent.

In 2010, the Rudd government announced it would incrementally raise the rate to 12 per cent by 2020 but Tony Abbott froze the rate at 9.5 per cent in 2014, citing a “budget emergency”.

According to former prime minister Kevin Rudd, this was “classic Abbott bullshit to advance a long-standing, ideological agenda”.

Rudd disputes the current claim by many Liberal MPs that businesses cannot afford a super increase.

He said labour productivity had risen about 9 per cent since the Abbott freeze, easily outstripping the stalled 2.5 per cent rise in contributions.

“They also conveniently ignore that (Rudd’s announced increase to 12 per cent) was coupled with business-friendly measures including a company tax cut, phased implementation and an instant asset write-off.”

Fund members face Super ‘double whammy’

July 27, 2020 by Rayan Calimlim Leave a Comment

About 2.4 million people have applied to withdraw funds from their super accounts under the government’s “early access scheme” put in place during the pandemic.

By July, about 500,000 people had already accessed the scheme, which allows members to withdraw up to $20,000 from their super fund.

Industry super funds have warned that people who make withdrawals under the scheme face a double whammy if the planned increase in employer contributions from 9.5 per cent to 12 per cent is cancelled.

According to Industry Super Australia modelling, if the increase is abandoned, a typical man who draws down the maximum $20,000 allowed under early release rules will lose $180,000 in retirement savings.

To make up the difference, he would have to work an extra 6.5 years past retirement age, to 73 and a half.

A woman would lose $150,000 and have to work eight years longer, until she was 75, to make up the difference.

Experienced business analyst Glenda Korporaal, an associate editor of The Australian newspaper, says the early access scheme has set a dangerous precedent.

“The danger for the super industry is that if easier access conditions are continued or not well monitored, they will be seen as a handy ATM to draw down funds for all events of future hardship,” she wrote.

“Another severe bushfire season? Allow those affected to draw down their super. People affected by severe flooding or cyclones? Allow them to draw down their super. The list goes on.

“Allowing early access to super simply means that there will be no money, or a lot less money, for people – sadly, the more vulnerable in society – once they get to retirement age.”

Housing trends undermine retirement system

May 29, 2017 by Rayan Calimlim

Australia’s declining rate of home ownership threatens to sink our superannuation and pension systems.

Home-owning retirees will increasingly be forced to use some or all of their superannuation to pay off their mortgages.

An increasing proportion of retirees will live in privately rented housing and be forced to spend a higher proportion of their income on rent.

As a result, fewer Australian retirees will be able to support themselves without relying on the age pension and governments will face growing pressure to raise the age pension and Commonwealth rent assistance.

These are the main findings of a report written by economist Saul Eslake for the Australian Institute of Superannuation Trustees (AIST), a lobby group for not-for-profit super funds.

The report, No Place Like Home: The Impact of Declining Home Ownership on Retirement, says Australia’s retirement income system is based on the assumption that the vast majority of retired people will have very low housing costs.

It presumes most of them will own their own homes, with mortgage debt fully paid off, and that those who rent will typically be accommodated in cheap government housing.

“These presumptions have allowed successive Australian governments to maintain age pensions at lower levels than in most other ‘advanced’ economies without resulting in higher levels of poverty among retirees,” it notes.

These assumptions are under-mined by three trends that have emerged over the past two decades:

Declining rates of home ownership among people of working age, especially those in their late 20s and early 30s;
A rising proportion of home owners, particularly among those in their late 50s or early 60s, who still have mortgage debt outstanding;
A declining proportion of people aged 65 and over living in accommodation rented from state or territory housing authorities, and an increasing proportion living in private rental accommodation.

These trends are likely to leave more retirees wholly or partially dependent on the age pension than is currently assumed.

That will generate political pressure for increases in the level of Commonwealth rent assistance, in the age pension itself, or both.

“These prospects should encourage Australia’s current generation of political leaders to give more thought to what can and should be done to ameliorate or reverse the long-term decline in home ownership rates among people currently aged between their mid-20s and their mid-50s,” the report says.

It says there is “little doubt” that first home buyers have been “squeezed out” of the housing market by investors over the past 25 years.

“In 1991–92, both groups accounted for around 17% of total lending for housing (with the balance being for existing home owners ‘trading up’).

“By 2014–15, the share of housing finance commitments going to investors had risen to 53%, while that going to first home buyers had declined to less than 10%.”

The report argues state and federal governments could help more people to become home owners by increasing the supply of homes and affordable rental housing, and using the tax system to reduce competition between first home buyers and investors.

It recommends:

Abolishing or modifying negative gearing and the capital gains tax discount;
Requiring regulators to force a reduction in growth in lending to property investors;
Further tightening rules for foreign investors;
Pressuring state governments to exempt pensioners from stamp duty when ‘downsizing’. ■

High rents forcing nurses out of Sydney

Clinical nurse consultant Marie Coughlan has rented homes in Sydney since she arrived from her native England in 1985. Following steep rent rises in recent years she now pays about half her wage to a landlord and is considering moving to a cheaper city.

“I was paying $250 per week for a one bedroom flat in 2004 and the same place today would probably be around $650,” says Marie.

“Our wages haven’t kept up with the cost of living and though I’m on a fairly good wage now it’s not helpful if half of it goes in rent.

“I specialise in drug and alcohol and I’m also qualified as a nurse practitioner. If I could find a similar specialised position in a cheaper location I would seriously consider moving.

“I am nearing the age at which I should be able to retire, but if I stay in Sydney I will never be able to retire.”

Marie’s $700-per-week apartment is a 30-minute bus ride from her workplaces at Prince of Wales and Sydney hospitals.

A superannuation payout in 2001 gave her enough for a deposit on a studio apartment but no bank would give her a loan.

“They gave two reasons: first, I was a single woman and second, they required me to purchase a place bigger than 40 squares which I would have been unable to afford on my wages at that time.”

She subsequently did two work stints in the United States plus overseas voluntary work and rents skyrocketed in her absence.

“Since returning to Sydney I have never been able to save enough to get a deposit together and pay the rent.”

Marie welcomes the NSWNMA’s attempts to give the issue of housing affordability for essential services workers a higher profile.

“Younger nurses are definitely feeling the pinch, but also older nurses who are still renting will be in trouble if they don’t have massive superannuation. If nothing is done I think Sydney will become another London, where most people cannot afford to live decently.”