As Minister for Employment Michaelia Cash, who has been described as sounding like a “wharfie”, screeches her way through Senate Question Time demanding the reintroduction of the Australian Building and Construction Commission to deal with the supposed ‘widespread lawlessness’ exposed by the Royal Commission into Trade Unions, there is a far more pervasive ‘lawlessness’ going on that she doesn’t want you to know about.
In October last year, the Association of Superannuation Funds of Australia released figures showing that an estimated $2.75 billion has been lost through the non-payment of compulsory super and is understood to have affected more than 650,000 Australians.
The average loss per person earning a gross annual wage of $80,000 is the equivalent of $4000 or nine months’ worth of super.
ASFA chief executive Pauline Vamos said the industries that were among the worst offenders included construction, hospitality and taxi services
In 2013/14 Construction and Building Industry Super (CBus) helped recover almost $110 million in unpaid super for its members but estimates there could be a further $400 million that needs to be retrieved.
CBus chief executive officer David Atkin said the building industry continued to plagued by employers failing to pay their staff their super entitlements.
“In sectors of the construction and building industry the cash economy is rife, there is sham contracting, insolvencies and phoenix activity,’’ he said.
“The industry is also highly competitive and not paying superannuation entitlements can give some employers an unfair advantage when cash flow is tight.”
Prime Minister Malcolm Turnbull says the conflict revealed in the Royal Commission report is between the members and the union bosses who sold their members out by trading off the workers conditions for undisclosed payments.
The fact of the matter is that the shady dealings of employers far outweigh anything a few individuals in union management may or may not have done.
And then there is the government’s own attack on workers’ retirement savings.
Despite a pre-election promise that there would be “no adverse changes to superannuation”, it quickly became obvious that only applied to employers and to investors who use superannuation as a tax minimisation strategy. Workers were to face “adverse changes” that would cost them tens of thousands of dollars.
Not only was the low income co-contribution scrapped, under new laws, the Superannuation Guarantee will now not reach 12% until July 2025, 7 years later than the Labor government legislated for.
And it gets worse.
The government has been considering a proposal to freeze the SG at 9.5% indefinitely.
Figures published by Industry Super Australia (ISA) shows that keeping the super contribution rate at the current level, and abandoning increases to 12 per cent by 2025, would have serious financial implications over time for most workers, but especially for younger workers who still have most of their working lives ahead of them.
For example, a worker aged 25 earning $70,000 could expect to be almost $102,000 worse off at retirement age, while a 30-year-old on a $125,000 salary would have their super pot reduced by more than $135,000 by the end of their career. A 25-year-old earning $40,000 would be almost $60,000 down at a retirement age of 67, and a 40-year-old earning $60,000 would have around $33,000 less at retirement.
A typical female industry super fund member, earning at most 70 per cent of average full-time wages, could expect to lose $74,293 in retirement benefits in real terms over her entire working life under the proposals.
CEO David Whiteley said the proposed freeze would cut a person’s super balance at retirement by 20 per cent and reduce national super savings by more than $900 billion by 2055.
ISA modelling also shows the government would need to pay 6 per cent more in age pension outlays to make up for the shortfall in superannuation savings, which would increase pressure on taxpayers and the long term budget.
“Freezing the superannuation guarantee now will mean future generations will be paying for those retiring today.”
There are already mechanisms in place to prosecute the few union officials who have done the wrong thing. Why has there not been a similar outcry against the widespread rorting by employers? Why has the unions’ role in retrieving entitlements for their members not been recognised?
And who will hold to account the government whose attack on workers’ entitlements has been far more damaging than any alleged action by a union?
Stop the screeching Michaelia and look in the mirror.
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