Don’t delay the Super increase
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.”