Thursday, 4 February 2021
Ever since Paul Keating introduced superannuation, those opposite have never grown out of wanting to fight against superannuation. They have never given up on their dream of dismantling super in this country. The Prime Minister now wants to use COVID as cover to do the things he's always wanted to do. You see it with cutting wages, you see it with destroying secure work, but you see it also with superannuation. He's wanted to sneak through those wage cuts to attack old enemies, to weaken job security and to cut the universities while he's at it. All of these old Liberal dreams are assembled together. This agenda is being snuck through under the cover of COVID.
When the pandemic arrived, the Prime Minister encouraged people to drain their superannuation accounts just to survive the lockdown. As everyone predicted, this has decimated super balances around the country. As a result of the early release scheme, nearly one million workers under the age of 35 have either closed out their accounts entirely or have less than $1,000 in savings. For young people, this will be devastating in retirement. If a 30-year-old withdrew $20,000 over the last year, as they have had the opportunity to, at a conservative rate of five per cent a year interest, that would have compounded to $110,000 by the time that person reached the age of 65. At eight per cent, you're talking about $300,000 lost from retirement incomes. That is the magic of compound interest for you.
What the government has done here is ask young people to fund the stimulus that our economy needed. Yes, our economy needed stimulus, but how is it fair to have a 30-year-old shop assistant doing the heavy lifting with stimulus? Not content to drain a million accounts, the Prime Minister's now backing away from the legislated cuts in super, the cuts that he's already promised. He's got COVID as cover to try and do this. As things stand, the median superannuation account at retirement is $183,000; less than that for women at $118,000. It is not enough. But think about this jump from 9½ to 10 per cent. What does it mean for employers? It means about $7—maybe a bit less—for someone on the median wage. It's shocking how little it is and to what lengths those opposite will go to stop that modest increase in superannuation for an ordinary working person. But when we get to 12 per cent, what will the difference be? A 30-year-old on the median income will be over $100,000 better off by the time they retire.
Those opposite say 'You have to choose between wages or super.' The truth is they actually don't want you to see an increase in either. They don't want you to have better wages. They don't want you to have better super. They don't want you to have either. Former Prime Minister Tony Abbott said you have to choose between super and wages. He promised wages would go up when he froze super. In fact, we've had seven years of no wage growth. Wages didn't go up after that promise. We know that cutting super won't produce higher wages.
The government are suggesting that people tap into the value of the family home when they retire to tide them over and to make up for this decline. They're talking about reverse mortgages. The minister for superannuation suggests that that's a great idea. I don't know if people have looked up the reverse mortgage product that the minister for superannuation is recommending to Australian families. They're charging 4½ per cent interest. You can go to the bank and get a loan for less than two per cent. The government want you to tap into the value of your home and then they want to charge you 4½ per cent per annum for the privilege of doing it. They want to cut your super now and leave you poorer in retirement. It's a disgrace.