Paul Keating was not only a great PM but a magnificent Treasurer who implemented significant lasting reforms.
Paul Keating has blasted “little bitchy Liberals” for undermining the retirement savings system he helped to create, using a rare breakfast radio appearance to ridicule the idea Australia cannot afford to increase superannuation contributions from employers during a recession.
Speaking on RN Breakfast on Thursday, Keating said Australia’s vast pool of super savings of close to $3tn was vital to fund nation-building infrastructure projects and accused a “miserable little backbench group” of trying to undermine the system because it included industry super funds, which are jointly run by unions and employers.
He denounced the “meanness” of Liberal politicians who get a 15.6% rate while trying to deny 12% to “ordinary working people”.
“You know what the Libs are saying? Too good for them,” he said.
Employer contributions, known as the super guarantee rate, are legislated to increase from the current 9.5% of wages to 12% by 2025, starting with a 0.5 percentage point increase next year.
However, the Morrison government is under intense pressure to ditch the increase from the business lobby and a ginger group of backbenchers, both of which argue that the coronavirus recession makes the move unaffordable.
The prime minister, Scott Morrison, is believed to have told backbenchers that the increase to 10% next year will happen because it was an election promise, but he wants to stop at that level.
However, in recent days treasurer Josh Frydenberg has been signalling the government may renege on the election pledge, telling Sky News he was “considering the issue”.
Keating said he had seen all the arguments against lifting the super guarantee rate during the recession of the early 1990s, when he was in government.
“All this was said to me in 1992, ‘Oh if you put the superannuation guarantee on, you know you’ll just lift the cost of wages’,” he said.
“You know, you could hear all the small business organisations out with a handkerchief out crying.”
Critics, including the Grattan Institute, have argued that any increase in super will reduce future wage rises.
However, other economists – and Keating – have pointed out that wage growth has stalled, arguing super increases may be the only way to get an increase.
Keating said that the experience from the early 1990s onwards was that real wages increased until 2013 and at the same time business enjoyed massive boosts to productivity and profits.
He said employers could afford to pay the increase, pointing to national accounts figures released on Wednesday that showed the share of income going to wage earners has fallen below 50% for the first time since 1959.
“We’ve seen a huge increase in the profit share in the economy, and a longtime decline in the labour share of the economy, now what we’re talking about here is 2.5%, 0.5% a year.” he said.
He said this was a third of the most recent increase in the minimum wage, and a sixth of the one before that.
“In an economy like this you want, if you’re the government, you want everyone pulling along, you want everyone in there trying, you want everyone having a go,” he said.
“The last thing we want is some bitchy performance from the Liberal party, trying to knock off the wages of ordinary people.”
He criticised Frydenberg for allowing people to draw up to $20,000 from their super during the coronavirus crisis, saying people hurt by the downturn should instead have been supported by the state.
He said super should be “putting money into investments, into infrastructure, aged care”.
“Instead of that, what have we got, a bunch of little bitchy Liberals trying to knock off 2.5% of people’s income for the rest of their lives.”
He said superannuation made it possible to fund large infrastructure projects, which he said banks were unable to finance.
“There was no capital market before superannuation and there now is,” he said
He said the Australian super regime was the best in the world “because it’s all personally vested in everyone’s name, not some government fund”.
“And these, these monkeys, want to destroy it,” he said.
“They’d like to crack it open for for housing deposits, they’d like to crack it open for health, they’d like to crack it open because they want to be rid of it.”
Keating urged Frydenberg to keep up government payments that have supported Australian households rather than tapering them off as planned.
“What we’ve got to do is support people on the way through,” he said.
“We don’t dump them, like, all we’re happy hanging five on the big waves and all of a sudden they’re in the dumper.
“What we’ve got to do is see the wave into the beach, you know, what the government shouldn’t do is do the dumper, you know, which I think they’re getting ready to do.
“In other words, pull jobkeeper back and pull jobseeker back.”
He also lashed Reserve Bank “bureaucrats” for not doing enough to support government spending.
The RBA should stop producing “silly little minutes” of its meetings once a month and wade into the bond market, he said.
“What they should do is get off their tails and buy more of the government debt, in which case we can afford the jobkeeper, and the jobseeker, right to the beach, not the dumper 100 metres out.”https://www.theguardian.com/australia-news/2020/sep/03/paul-keating-blasts-little-bitchy-liberals-for-undermining-his-superannuation-system
