Nothing exemplifies better how totally lacking in judgement the Coalition is than the superannuation saga.
(Ok, maybe their determination to exacerbate climate change, but that’s another story albeit very similar in its short-sighted ignorance.)
In the brief moments between discussing dual citizenship and Gestapotato’s latest bid to make us all scared, they sometimes remember we have an aging population.
Their plan to deal with this is to make most of us work until we are 70 and to protect the wealth and tax concessions of rich old investors.
Scomo tears at our heartstrings about all the nanna, nonna and yanni investors who would miss out on their yearly gift from the government if Labor took away their excess franking credit returns. Unlike the Low Income Tax Offset, which can only be used to offset tax you owe – no tax, no benefit.
(I also didn’t hear any concern when they took away the Schoolkids Bonus which was an enormous help to families trying to get kids ready for school just after Christmas.)
Getting back to superannuation….
Having adequate superannuation gives workers who haven’t had enough disposable income left over to buy multiple investment properties or extensive share portfolios a chance to have some quality of life in their retirement. It also reduces the reliance on the aged pension.
So why do the Coalition fight so hard against it?
Compulsory national superannuation was initially proposed as part of the 1972 Whitlam initiatives but up until the 1980s superannuation was solely the privilege of predominantly male professions, clustered in the public sector or available after a long qualifying period in the private sector.
In 1985, a deal struck between the government and the ACTU saw the trade union movement forfeit a claim to 3% productivity improvement as wages to instead be paid in compulsory superannuation – endorsed by the Arbitration Commission and managed by superannuation funds with equal representation of the unions in the industry and the employers.
As usual, the leader of the Opposition, John Howard, saw it as an evil union plot.
“That superannuation deal, which represents all that is rotten with industrial relations in Australia, shows the government and the trade union movement in Australia not only playing the employers of Australia for mugs but it is also playing the Arbitration Commission for mugs”.
The 1996 election saw Howard promise to match Labor’s plan to gradually increase superannuation to 15%, only to dump it six months after the election. Despite fighting tooth and nail every step of the way, they were unable to halt the rise to 9% by 2002, thanks to the Senate.
The Howard government despised superannuation. The idea that organisations of working people should manage large sums of money in the economy was anathema to it. The rich wanted a piece of the action. So, in 2007, the Coalition made changes that turned superannuation into a tax minimisation scheme for the wealthy by allowing people to invest up to $1 million in super and take the benefits tax free.
To this day, they still resent and regularly attack industry super funds despite the fact that they continually outperform the retail funds. They don’t want workers’ organisations benefitting from the scheme they set up.
When Labor won government, they reintroduced the gradual rise in the SG but only got to 9.5% before the Coalition nixed it again. This supposedly temporary freeze, unlike the temporary freeze on politicians’ wage rises and the temporary budget repair levy, seems to have turned into permafrost.
Any suggestion that increasing the SG would be an imposte on employers is not borne out by the facts. Small business has already had a tax cut and have benefitted from instant asset write off and reduced penalty rates. Unit labour costs have been stagnant or falling while company profits are soaring to record highs. But none of this has led to wage rises.
If the Fair Work Commission and government refuse to legislate for pay rises, and with the unions largely blocked from the negotiating table and hobbled in the action they can take, increasing the SG, and the penalties for not paying it, would be a good start on forcing companies to give the workers a share of the wealth their labour creates.