Former prime minister Paul Keating, the architect of Australia’s superannuation system, has hit out at the Productivity Commission for potentially delaying increases in the super guarantee.
Mr Keating told the Australian Financial Review that workers had already lost a “considerable sum” of money over the past six years as conservatives delayed a rise in the superannuation guarantee (SG) to a compulsory employer contribution of 12 per cent.
Among its wide-ranging recommendations on the superannuation system released last week, the Productivity Commission called for a new independent inquiry into the retirement income system to be held before any possible increase in the current 9.5 per cent SG rate.
“How pathetic is this as a policy recommendation?” Mr Keating was quoted as saying Wednesday.
“It is no news to anyone that the Treasury never supported the advent of compulsory superannuation,” he said.
“It was delivered by political and industrial entrepreneurship. And only by political and industrial entrepreneurship.”
Mr Keating also took aim at mining magnate and political aspirant Clive Palmer for his role in denying a super increase when his party sat in Parliament during the Abbott government.
“In the course of Clive Palmer telling Australians he will make Australia great again – he might explain to the nation’s 12.5 million employees why, in the Senate, his party voted with Joe Hockey to deny every Australian employee an extra 2.5 per cent of superannuation till 2025,” he said.
Periodic increases in the SG are legislated for between 2021 and 2025, ultimately taking it to 12 per cent.
The Coalition government has officially supported the increases, despite many Liberals holding reservations about the increases.
Both the Abbott and Howard governments previously delayed or cancelled higher superannuation because of the immediate cost to the budget and the belief of many economists that workers ultimately receive lower take-home pay in return for higher super contributions.
Mr Keating, who initially introduced compulsory superannuation at 3 per cent of employees’ income in 1992, has urged for the rate to be gradually lifted to 15 per cent.