FORMER prime minister Paul Keating has warned that raising the superannuation guarantee to 12 per cent for compulsory contributions will “barely cut it”, and many Australians could be left without enough money for their retirement.
Mr Keating was interviewed on 7.30 last night. He took aim at The Grattan Institute, which recently released a report claiming “the vast majority” of Australians will be “financially comfortable” in their retirement.
“The conventional wisdom that Australians don’t save enough for retirement is wrong,” the report concluded. It recommended scrapping the current plan to raise compulsory contributions from 9.5 per cent to 12 per cent.
It is fair to say Mr Keating did not agree.
“When I introduced superannuation, people retired at 65 and died about 83 or 85. In the 30 years since, people are living three to five years longer,” he said.
“So people now live into their late 80s and the superannuation pool is not large enough to maintain the sort of standard of living we wish for them.”
He called out John Daley, the chief executive of The Grattan Institute, by name.
“This is where John Daley doesn’t get it with his miserable view about having two Australias,” Mr Keating said, suggesting the report’s recommendations would lead to a split between rich Australians with high amounts of super and those stuck on the pension.
“The privileged Australia, where the wealthy can have assets, but ordinary people are condemned to the pension. This is $460 a week. Don’t whoop it up on $460 a week, Mr Keating said.
“What I had intended and what we are seeing is that we have a new community standard where people have some equation between the ordinary working people of Australia and those that have got wealth,” he said.
“In other words, they’re not just condemned to the aged pension, where Daley is recommending people work until 70, eat your house, and then basically find yourself at a certain point in your life where you don’t have financial assets.”
Mr Keating said the age pension was “an anti-destitution payment”, and super was supposed to help Australians avoid needing it.
“In a wealthy society like Australia, where the economic system can produce enough wealth to give people flexibility in retirement … under the Daley proposition you have nothing,” he said.
Mr Daley responded by accusing the former prime minister of “fearmongering”, “making hand-waving assertions” and “disparaging anyone who disagrees with him” instead of actually reading The Grattan Institute’s report.
He said most Australians currently die with savings “almost as large as when they retired”.
If Paul Keating actually read our report rather than repeating ASFA talking points, he would know we don’t advocate “two Australias”. With 9.5% or 12% compulsory contributions almost all workers will have quite a lot of retirement income from super. 1/5 pic.twitter.com/QwR8wF99EI— John Daley (@JohnDaley_)
If Paul Keating actually read our report rather than repeating ASFA talking points, he would know that with 9.5% compulsory contributions very few will be on a full Age Pension until late in life (and even then they will still be drawing down their super). 2/5 pic.twitter.com/uJHDnaGhzE— John Daley (@JohnDaley_)
If Paul Keating actually read our report rather than fear-mongering about low returns, he would know that most people will have enough in retirement even if returns are only 6.5% while working and 5.5% in retirement. 3/5 pic.twitter.com/v3BwwtYLNB— John Daley (@JohnDaley_)
If Paul Keating actually read our report rather than disparaging anyone who disagrees with him, he would know there’s lots of evidence that a higher Super Guarantee will lead to lower wages, including the Henry Tax Review, the Fair Work Commission, and leading academics. 4/N pic.twitter.com/Y6x7XChcl3— John Daley (@JohnDaley_)
If Paul Keating actually read our report rather than making hand-waving assertions, he would know that savings won’t run out at 90 – multiple sources show that on current trends most Australians die with savings almost as large as when their retired. 5/5 pic.twitter.com/9OJfnEKjOo— John Daley (@JohnDaley_)