Have you heard the one about how increasing your superannuation savings is going to mean you can’t afford to pay your bills anymore?
I know, it would be funny if it wasn’t the sort of junk economics being pedalled by a cabal of ideologues in Scott Morrison’s government.
The campaign to undermine Australia’s world class retirement savings program that most of us call “Super” is continuing in Parliament, with its usual assortment of fear and smear tactics and pretzel logic.
Just remember, the Super Guarantee is legislation that was passed by the Abbott Liberal Government in 2014, mandating a graduated increase of the employer superannuation contribution to 12% by 2025.
This was to offset Abbott’s decision to freeze the rise in contributions planned by the then Gillard Government in 2012 to 9.5% in 2014.
That’s right, the Liberal anti-retirement lobby led by Tim Wilson and Andrew Bragg, are campaigning against legislation created and delivered by their own party.
On Tuesday in Senate Estimates, Senator Bragg was at it again, trying to link Australia’s record low wages growth with a rise in the Super Guarantee.
Senator Bragg asked a series of questions of Treasury Secretary, Dr. Steven Kennedy, about the link between a rise in the Super Guarantee and wages growth.
Dr. Kennedy posited the economic theory that wage increases would be lower if the Super Guarantee were increased. The evidence? Tumbleweeds could have rolled through the Senate Estimates hearing at that point. It was all just theory and guess work. Keep in mind that Treasury has a reputation for its wage forecasting being about as accurate as a game of pin-the-tail one the donkey at a kids party.
Michael Buckland is the CEO of the progressive research body the McKell Institute. He points out the fact that without a rise in Super contributions, wages were dead on the slab already.
“There’s a certain amount of economic theory that talks about wages and trade-offs that is relied upon to produce these kinds of estimates.
“However, what we’ve seen is that there was no observable increase in wages when the superannuation guarantee was last put on hold. The idea of putting it ( a rise in the Super Guarantee) on hold would mean that wages would suddenly shoot up was a complete myth.” Mr Buckland told On the Job.
Economist Dr. Jim Stanford is the director of the Centre for Future Work at the Australia Institute. He backs up Michael Buckland’s assessment.
“Wage growth since 2013 has been consistently weaker than any time since the 1930s. In that time, the super guarantee hardly changed at all.
“It is preposterous for the government to blame rock-bottom wage growth on the superannuation guarantee system. The government’s own policies are the main culprit in wage stagnation: attacking unions and collective bargaining, freezing pay for public sector workers, and opposing minimum wage increases. On wages, this government lives in a glass house – it really shouldn’t throw stones.” Dr. Stanford said.
The Liberal’s attack on the Super Guarantee has been a campaign of fear and misinformation, rolled into its general assault on the sanctity of the Superannuation savings system itself.
There has been the opening up of super balances during the pandemic that has seen tens of thousands of workers (the majority of them women) emptying their super balances in order to survive the COVID19 crisis, robbing themselves of a comfortable retirement.
Melbourne MP Tim Wilson has run a relentless and disingenuous campaign claiming that by saving for your retirement, you won’t be able to save for a home deposit.
Wilson is basically conceding that this government has given up on the basic promise of good government – to provide the opportunity for decent work and a home for all Australians and a dignified and comfortable retirement.
Tim Wilson and his mates think you should have to choose between the two of them.
Michael Buckland rejects these scare campaigns.
“No one should be afraid of the superannuation guarantee (at the moment) the superannuation guarantee is the only way workers are going to receive any benefit from their increased productivity.”
Mr Buckland said that the low wage environment is here to stay for the time being, and it clearly isn’t because of Superannuation.
“The overwhelming evidence is that workers bargaining power and productivity have the greatest impact on wages. If productivity is increasing, as we can see in some of the some of the figures coming through, then the reason that wages aren’t increasing is because of a need for greater workers bargaining power,” Mr Buckland said.
Jim Stanford dismisses the choices being framed by Tim Wilson and others, saying workers deserve better and the economy can afford it.
“Workers deserve both higher wages and stronger retirement incomes, and there is no economic reason why they can’t have both.
“The Coalition claim that workers must give up wages if they want better super is a political assumption, not an economic reality. By strengthening wage supports in our economy (through strong collective bargaining and higher minimum wages), we can lift wage growth back to normal levels at the same time as we strengthen superannuation.
“Workers deserve both – and employers can absolutely afford to pay both.”