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Paul Keating Lashes The Federal Government (Read 1034 times)
whiteknight
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Paul Keating Lashes The Federal Government
Jan 14th, 2021 at 4:57am
 
Paul Keating lashes federal government for considering 'opt-in' superannuation
The Age.
January 13, 2021


Former prime minister Paul Keating has hit out at a federal government proposal to allow workers to put some of their superannuation into their take-home pay, lashing the idea as "ideological" and driven by "zealot" backbenchers.

The plan is one of several options in the early stages of discussion in the Morrison government and has not gone to cabinet. It could allow workers to choose whether to take additional payments over the 9.5 per cent guarantee as extra income rather than a superannuation contribution.

Former prime minister Paul Keating said the 'opt-in' super model being considered by the government has been "prompted by zealots in its back bench".


The super guarantee is currently set to rise to 12 per cent in 2025, rising 0.5 percentage points a year from July. Multiple government sources said the new scheme would either keep the current rate, or let one rise go through to 10 per cent as mandatory contributions while the remaining amount up to 12 per cent would be optional.

Mr Keating, the architect of the nation's superannuation system, has now criticised the idea as "designed only to break the principle of 'universality' in the retirement system" with the Liberals trying to "poke a hole in super".



"And what is this all about? What is the high point of ideological objection here – it is that trade unions, through not-for-profit industry funds, have a role in capital markets – shocking," he said.

The increase in the superannuation guarantee to 12 per cent is already legislated, but about a dozen Coalition MPs and Senators oppose the rise, with several saying a higher super guarantee will mean lower wage growth.

"Were the government, prompted by zealots in its backbench, to fall for the idea of an 'opt-in' or 'opt-out' approach ... the government would have to legislate to compel employers to pay the 2.5 per cent as wages, because the enterprise bargaining system cannot pay them, as the last eight years [of little wages growth] have demonstrated," Mr Keating said.

Former prime minister Kevin Rudd also criticised the proposal as an "ideological obsession" using the rhetoric of "choice" when the whole point of super was that it is compulsory.

"This delivers a private benefit for individuals, who are helped to invest for decent retirement, and a public benefit by reducing pressure on the aged pension, creating a strategic pool of investment funds and stabilising the economy against international shocks," Mr Rudd said in a statement.

"Why not make the Medicare levy optional for people who don’t want to use public healthcare? ... Australians will resist any attempt to force them down an American path where working people are forced to retire in poverty," he said.

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Superannuation funds are concerned about the proposal, with Australian Institute of Superannuation Trustees chief executive Eva Scheerlinck calculating the additional 2.5 per cent would boost the average couple's retirement by $200,000.

"There are lots of ways to deal with low wage growth but forcing people to use their retirement savings to fund their own pay rise shouldn't be one of them," she said. The Association of Superannuation Funds of Australia chief executive Martin Fahy said making any element of the system voluntary would affect long-term retirement outcomes and bring "additional complexity for employers and employees".

Industry Super Australia deputy chief executive Matthew Linden said the federal government should follow through on the legislated rise rather than "exploring underhanded ways to renege on it".

"Removing the guarantee in the super guarantee to make it 'optional' is a recipe for higher taxes, lower lifetime incomes, and a red tape nightmare for business," Mr Linden said. "This isn't choice – it's a sneaky tax grab that will leave people worse off and rip up one of the system's founding principles."

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However, Grattan Institute household finances program director Brendan Coates supported the idea, saying it added "flexibility" to the system and could be easily delivered in tax refunds. Mr Coates has been critical of increasing super above the current rate as research undertaken by the think-tank found the current level was adequate for most in retirement.

"This is better than the increase just going ahead as planned," he said. "It neutralises the debate about a superannuation-wages trade-off."

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Mix_Master
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Re: Paul Keating Lashes The Federal Government
Reply #1 - Jan 14th, 2021 at 8:44am
 
A few things about this proposal "get my dander up".

Firstly, we have a Coalition Government which, let''s face it, is likely to be in power for the majority of time going forward as Australians want the LNP in power federally, for good it would seem, which is increasingly looking for ways to "tighten the screws" on pension eligibility. Eventually, they'll introduce "mutual obligation" to the Age Pension.

Secondly, allowing workers to take home the extra 2.5%, means that that money will, of course, be taxed at the worker's marginal tax rate. (Saving the Government some $1.8B in foregone revenue, but delivering the worker less in net terms).

Thirdly, those same workers, having spent the (net reduced) 2.5% "through working life", means a reduction of how much(?) in their Super, by way of foregone compound interest.

Lastly, so when they actually retire, they'll:

- Have less in Super to retire on,

- Rely more on an increasingly difficult to get Age Pension, and so will be

- Forced to "eat into" the equity on their home (via a Reverse Mortgage) to have some kind of decent standard of living in retirement.

That's what these "ideas' are setting people up for, down the track.


And for all the bleating and hand-wringing (on these boards and elsewhere) about the "evils" of the Super system as it is, I'm yet to see a coherent case made for a system which is better, and isn't likely to leave workers worse off than they would be under the current system.
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Re: Paul Keating Lashes The Federal Government
Reply #2 - Jan 14th, 2021 at 9:09am
 
Coalition governments never take these kind of changes as policies to elections that they could lose. They always spring them as nasty surprises on workers.

Meanwhile, they always leave it to Labor governments to do the heavy lifting on superannuation contributions, while taking for themselves the credit for the benefits.
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You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.
 
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Re: Paul Keating Lashes The Federal Government
Reply #3 - Jan 15th, 2021 at 5:44am
 
Coalition mulling over ‘opt-in’ superannuation guarantee
Jan 13 2020 New Daily.
The federal government is mulling over a proposal that would allow Australians to substitute future increases in the superannuation guarantee for higher take-home pay.

Nine Newspapers reported on Wednesday that the Morrison government is considering letting the superannuation guarantee rise to 10 per cent in July as is legislated, but could make the next 2 per cent optional.   Sad

The SG is scheduled to rise in 0.5 per cent intervals every July until it reaches 12 per cent by 2025.

But a number of Coalition members have called for the SG to be held at its current level of 9.5 per cent.   Sad

They include Tim Wilson, Jason Falinski, Katie Allen and Craig Kelly.



The solution aired in the Nine Newspapers seems to be a compromise between the forces wanting to scrap SG rises altogether and those – including the ALP, unions and super industry – pushing for the rises to continue as scheduled.

Treasurer Josh Frydenberg believes the COVID recession means a rethink is necessary.

After the release of the long-awaited Retirement Income Review in November, Mr Frydenberg said “We will consider this report, we will consider other views that have been placed out there, and we will make a decision about [the SG] in light of current circumstances before the scheduled increase takes place [in July]”.

Labor’s shadow assistant treasurer Stephen Jones was dismissive of the proposal, describing it as “flying kites”.

“The government should acknowledge that we have a first-class retirement system and allow the SG to rise to 12 per cent as legislated,” he told The New Daily.


“This plan would see workers getting a cut in superannuation and instead having to fund their own wage rise,” Mr Jones said.

“Workers have already lost nearly $40 billion from their retirement savings through the government’s COVID early release measures. That will translate into $100 billion over [their] full working lives so we need measures to build up super savings, not cut them further.”


Deloitte Access Economics partner Nicki Hutley also saw the proposal as problematic.

“I worry that it is pushing the idea that there is an either/or tradeoff between wages and superannuation,” she said.

“For the last decade, wages as a proportion of GDP have declined. What this is likely to result in is older people nearing retirement will take the money as superannuation while younger people will take it as a wage rise.

“We really need young people to save more for retirement, [but] this would turn a COVID emergency measure into a permanent option, reducing retirement balances.”

Plan means higher taxes
Industry Super Australia deputy CEO Matt Linden said not only would the plan reduce super savings for workers, it would also increase the amount of tax they pay.

This is because superannuation contributions are taxed at 15 per cent, while the average worker has a marginal tax rate of 32.5 per cent.

As a result, an average family consisting of two 30-year-old parents would pay $20,000 more in taxation over their working lives if they opted out of the SG rises, and have up to $200,000 less in their superannuation by retirement.

“Removing the ‘guarantee’ in the super guarantee to make it ‘optional’ is a recipe for higher taxes, lower lifetime incomes, and a red tape nightmare for business,” Mr Linden said.

“The government should follow through on the legislated increase to 12 per cent and not be exploring underhanded ways to renege on it.   Sad
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Re: Paul Keating Lashes The Federal Government
Reply #4 - Jan 15th, 2021 at 12:52pm
 
no one gives 2fuks about keating Grin Grin
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FRED.bell58@yahoo.com.au FRED.bell58@yahoo.com.au  
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Re: Paul Keating Lashes The Federal Government
Reply #5 - Jan 15th, 2021 at 1:06pm
 
Attention Deprivation Syndrome?

I would have thought that 10% was adequate IF the system were handled properly and not as a cash cow for mates etc.

Keating's design was deliberately flawed so as to provide ample opportunity for abuse and cheating from 'the big boys', and, of course, had zero impact on his personal lovely superannuation scheme that provided a more than healthy income for life regardless of age.

One rule for the majority - different rules for the self-appointed aristocracy.  Politics isn't a service to the nation and people - it is a business opportunity to be used in every way by those in it.

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“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passion, they cannot alter the state of facts and evidence.”
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Re: Paul Keating Lashes The Federal Government
Reply #6 - Jan 15th, 2021 at 4:46pm
 
I wish Keating would run for the job of Prime Minister again
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Our esteemed leader:
I hope that bitch who was running their brothels for them gets raped with a cactus.
 
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Re: Paul Keating Lashes The Federal Government
Reply #7 - Jan 15th, 2021 at 9:19pm
 
John Smith wrote on Jan 15th, 2021 at 4:46pm:
I wish Keating would run for the job of Prime Minister again


He's a homophobe: 'Two blokes and a Cocker Spaniel don't make a family'.
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Re: Paul Keating Lashes The Federal Government
Reply #8 - Jan 15th, 2021 at 10:27pm
 
Keating does not often speak but when he does he is normally right.
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Re: Paul Keating Lashes The Federal Government
Reply #9 - Jan 16th, 2021 at 9:17am
 
John Smith wrote on Jan 15th, 2021 at 4:46pm:
I wish Keating would run for the job of Prime Minister again


He is nearly 80, do you want us to beat the Yanks having the oldest?  Grin
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Re: Paul Keating Lashes The Federal Government
Reply #10 - Jan 16th, 2021 at 1:38pm
 
Opt in super sounds great. Thanks WK.
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I identify as Mail because all I do is SendIT!
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Re: Paul Keating Lashes The Federal Government
Reply #11 - Jan 16th, 2021 at 4:12pm
 
freediver wrote on Jan 16th, 2021 at 1:38pm:
Opt in super sounds great. Thanks WK.

You're probably one of the gullible who actually believe the Coalition when they say it would result in pay rises.

It won't. The last seven years under the Coalition government had no increases to superannuation at all, and the lowest pay rises since records began over 60 years ago.

[Low wages growth] "is a deliberate design feature of our economic architecture". -- Matthias Cormann.
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You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.
 
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Re: Paul Keating Lashes The Federal Government
Reply #12 - Jan 16th, 2021 at 4:20pm
 
Dnarever wrote on Jan 15th, 2021 at 10:27pm:
Keating does not often speak but when he does he is normally right.



Actually he is normally left. Wink
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Re: Paul Keating Lashes The Federal Government
Reply #13 - Jan 16th, 2021 at 4:30pm
 
lee wrote on Jan 16th, 2021 at 4:20pm:
Dnarever wrote on Jan 15th, 2021 at 10:27pm:
Keating does not often speak but when he does he is normally right.



Actually he is normally left. Wink

Your logical fallacy is ambiguity
Quote:
You used a double meaning or ambiguity of language to mislead or misrepresent the truth.
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You are not entitled to your opinion. You are only entitled to hold opinions that you can defend through sound, reasoned argument.
 
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Re: Paul Keating Lashes The Federal Government
Reply #14 - Jan 16th, 2021 at 4:39pm
 
Bam wrote on Jan 16th, 2021 at 4:30pm:
Your logical fallacy is ambiguity
Quote:
You used a double meaning or ambiguity of language to mislead or misrepresent the truth.



Did I? Never mind petal. You will get over it. Grin Grin Grin Grin Grin
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