Press Conference: Morrison's Assault on Superannuation

E&OE TRANSCRIPTPRESS CONFERENCE31 AUGUST 2020BRISBANEKevin RuddThe reason I'm speaking to you this afternoon, here in Brisbane, is that Paul Keating, former Prime Minister of Australia, and myself, have a deep passion for the future of superannuation, retirement income adequacy for working families for the future, the future of our national savings and the national economy. So former prime minister Paul Keating is speaking to the media now in Sydney, and I'm speaking to national media now in Brisbane. And I don't think Paul and I have ever done a joint press conference before, albeit socially distanced between Brisbane and Sydney. But the reason we're doing it today is because this is a major matter of public importance for the country.Let tell you why. Keating is the architect of our national superannuation policy. This was some 30 years ago. And as a result of his efforts, we now have the real possibility of decent retirement income policy for working families for the first time in this country's history. And on top of that, we've accumulated something like $3 trillion worth of national savings. If you ask the question today, why is it that Australia still has a triple-A credit rating around the world, it's because we have a bucketload of national savings. And so Paul Keating should be thanked for that, not just for the macroeconomy though, but also for delivering this enormous dividend to working families and giving them retirement dignity. Of course, what we did in government was announce that we would move the superannuation guarantee level from 9% to 12%. And we legislated to that effect. And prior to last election, Mr Morrison said that that was also Liberal and National Party policy as well. What Mr Keating and I are deeply concerned about is whether, in fact, this core undertaking to Australian working families is now in the process of being junked.There are two arguments, which I think we need to bear in mind. The first is already we've had the Morison Government rip out $40 billion-plus from people's existing superannuation accounts. And the reason why they've done that is because they haven't had an economic policy alternative other than to say to working families, if you're doing it tough as a result of the COVID crisis, then you can go and raid your super. Well, that's all very fine and dandy, but when those working people then go to retire in the decades ahead, they will have gutted their retirement income. And that's because this government has allowed them to do that, and in fact forced them to do that, in the absence of an economic policy alternative. Therefore, we've had this slug taken to the existing national superannuation pile. But furthermore, the second big slug is this indication increasingly from both Mr Morrison and Mr Frydenberg that they're now going to betray the Australian people, betray working families, by repudiating their last pre-election commitment by abandoning the increase from 9.5% where it is now to 12%. This is a cruel assault by Morrison on the retirement income of working Australians and using the cover of COVID to try and get away with it.The argument which the Australian Government seems to be advancing to justify this most recent assault on retirement income policy is that they say that if we go ahead with increasing the superannuation guarantee level from 9.5% and to 10, to 10.5 to 11, to 11.5 to 12 in the years that are to come, that that will somehow depress natural wages growth in the Australian economy. Pigs might fly. That is the biggest bullshit argument I have ever heard against going ahead with decent provision for people's superannuation savings for the future. There is no statistical foundation for it. There is no logical foundation for it. There is no data-based argument sustained. This is an increment of half-a-percent a year out for the next several years until we get to 12%. What is magic about 12%? It's fundamental in terms of the calculations that have been done to provide people with decent superannuation adequacy, retirement income adequacy, when they stop working. That's why we're doing it. But the argument that somehow by not proceeding with the increase from 9.5 to 12%, we're going to deny people a proper increase in wages in the period ahead is an absolute nonsense. There is no basis to that argument whatsoever.And what does it mean for an average working family? If you're currently on $70,000 a year and superannuation is frozen at 9.5%, and not increased to 12, by the time you retire, you're going to be at least $70,000 worse off, than would otherwise be the case. Why have we, in successive Labor government's been so passionate about superannuation policy? Because we believe that every Australian, every working family should have the opportunity for some decency, dignity and independence in their retirement. And guess what: as we live longer, we're going to spend longer in retirement and this is going to mean more and more for the generations to come. Of course, what's the alternative if we don't have superannuation adequacy, and if this raid on super continues under cover of COVID again? Well, it means that Mr Morrison and Mr Frydenberg in the future are going to be forcing more and more people under the age pension and my challenge to Australians is simply this: do you really trust your future and your retirement to Mr Morrison's generosity in years to come on the age pension? It's a bit like saying that you trust Mr Morrison in terms of his custodianship of the aged care system in this country. Successive conservative governments have never supported effective increases to the age pension, and they've never properly supported the aged care sector either.But the bottom line is, if you deny people dignity and independence through the superannuation system, and these measures which the current conservative government are undertaking and are foreshadowing take us further in that direction. Then there's only one course left for people when they retire and that's to go onto the age pension. One of the things I'm proudest of in our period government was that we brought about the biggest single adjustment and the aged pension in its history. It was huge, something like $65. And we made that as a one-off adjustment which was indexed to the future. But let me tell you, that would never happen under a conservative government. And therefore entrust people's future retirement to the future generosity of whichever conservative government might be around at the time is frankly folly. The whole logic of us having a superannuation system is that every working Australian can have their own independent dignity in their own retirement. That's what it's about.So my appeal to Mr Morrison and Mr Frydenberg today is: Scotty, Joshy, think about it again. This is a really bad idea. My appeal to them as human beings as they look to the retirement of people who are near and dear to them in the future is: don't take a further meataxe to the retirement income of working families for the future. It's just un-Australian. Thank you.JournalistWell, what do you think of the argument that delaying the superannuation guarantee increase would actually give people more money in their take home pay? I know you've used fairly strong language.Kevin RuddWell, it is a fraudulent argument. There's nothing in the data to suggest that that would happen. Let me give you one small example. In the last seven or eight years, we've had significant productivity growth in the Australian economy, in part because of some of the reforms we brought about in the economy during our own period in government. These things flow through. But if you look at productivity growth on the one hand, and look at the negligible growth in real wage levels over that same period of time, there is no historical argument to suggest that somehow by sacrificing superannuation increases that you're going to generate an increase in average wages and average income. There's simply nothing in the argument whatsoever.So therefore, I can only conclude that this is a made-up argument by Mr Morrison using COVID cover, when in fact, what is their motivation? The Liberal Party have never liked the compulsory superannuation scheme, ever. They've opposed it all the way through. And I can only think that the reason for that is because Mr Keating came up with the idea in the first place. And on top of it, that because we now have such large industry superannuation funds around Australia, and $3 trillion therefore worth of muscle in the superannuation industry, that somehow represents a threat to their side of politics. But the argument that this somehow is going to effect wage increases for future average Australians is simply without logical foundation.JournalistSure, but you're comparing historical data with not exactly like-for-like given we're now in a recession and the immediate future will be deeply in recession. So, in terms of the argument that delaying [inaudible] will end up increasing take-home pay packets. Do admit that, you know, by looking at historical data and looking at the current trajectory it's not like for like?Kevin RuddThe bottom line is we've had relatively flat growth in the economy in the last several years, and I have seen so many times in recent decades conservative parties [inaudible] that somehow, by increasing superannuation, we're going to depress average income levels. Remember, the conservatives have already delayed the implementation of this increase of 2.5% since they came to power in 2013-14. Whatever excuses they managed to marshall that time in so doing. But the bottom line is, as this data indicates, that hasn't resulted in some significant increase in wages. In fact, the data suggests the reverse.So what I'm suggesting to you is: for them to argue that a 0.5% a year increase in the superannuation guarantee level, is going to send a torpedo a'midships into the prospects of wage increases for working Australians makes no sense. What doesn't make sense is the accumulation of those savings over a lifetime. If Paul Keating hadn't done what he did back then, there'd be no $3 trillion worth of Australian national savings. Paul had the vision to do it. Good on him. We tried to complete that vision by going from 9 to 12. And this mob have tried to stop it. But the real people who miss out are your parents, your parents, and I'm sorry to tell you both, you'll both get older and you too in terms of the adequacy of your retirement income when the day comes.JournalistSo if it's so important then, why did you only increase it by 0.5% during your six years in government, sharing that period of course with Julia Gillard?Kevin RuddWell, the bottom line is: we decided to increase it gradually, so that we would not present any one-off assault to the ability of employers and employees to enjoy reasonable wage increases. It was a small increase every year and, guess what: it continues to be a very small increase every year until we get to 12. The other thing I'd say, which I haven't raised so far in our discussion today, is that for most of the last five years, I've been in the United States. I run an American think tank. When I've traveled around the world and people know of my background in Australian politics, I am always asked this question: how did you guys come up with such a brilliant national savings policy? Very few, if any other countries in the world have this. But what we have done is a marvelous piece of long-term planning for generations of Australians. And with great macroeconomic benefit for the Australian economy in terms of this pool of national savings. We're the envy of the world.And yet what are we doing? Turning around and trashing it. So the reason we are gradual about it was to be responsible, not give people a sudden 3% hit, to tailor it over time, and we did so, just like Paul did with the original move from zero, first to 3, then 6 to 9. It happened gradually. But the cumulative effect of this over time for people retiring in 10, 20, 30 40 years' time is enormous. And that's why these changes are so important to the future. As you know, I rarely call a press conference. Paul doesn't call many press conferences either, but he and I are angry as hell that this mob have decided it seems to take a meataxe to this important part of our national economic future and our social wellbeing. That's what it's about.JournalistSo we know that [inaudible] super accounts have been wiped completely. What damage do you think that would do if it's extended? So that people can continue to access their super?Kevin RuddThe damage it does for individual working Australians, as I said before, it throws them back onto the age pension. And the age pension is simply the absolute basic backbone, the absolute basic provision, for people's retirement for the future. If no other options exist. And as I said, in office, we undertook a fundamental reform to take it from below poverty level to above poverty level. But if you want for the future, for folks who are retiring to look at that as their option, well, if you continue to destroy this nation's superannuation nest egg, that's exactly where you're going to end up. I can't understand the logic of this. I thought conservatives were supposed to favour thrift. I thought conservatives were supposed to favour saving. They're accusation against those of us who come from the Labor side of politics apparently is that we love to spend; actually, we like to save, and we do it through a national savings policy. Good for working families and good for the national economy.And I think it's just wrong that people have as their only option there for the future to be thrown back on the age pension and on that point, apart from the wellbeing of individual families, think about the impact in the future on the national budget. Most countries say to me that they envy our national savings policy because it takes pressure off the national budget in the future. Why do you think so many of the ratings agencies are marking economies down around the world? Because they haven't made adequate future provision for retirement. They haven't made adequate provision for the future superannuation entitlements of government employees as well. So what we have with the Future Fund, which I concede readily was an initiative of the conservative government, but supported by us on a bipartisan basis, is dealing with that liability in terms of the retirement income needs of federal public servants. But in terms of the rest of the nation, that's what our national superannuation policy was about. Two arms to it. So I can't understand why a conservative government would want to take the meataxe to [inaudible].JournalistFollowing on from your comments in 2018 when you said national Labor should look at distancing themselves from the CFMEU, do you think that's something Queensland Labor should do given the events of last week?Kevin RuddWho are you from by the way?JournalistThe Courier-Mail.Kevin RuddWell, when the Murdoch media ask me a question, I'm always skeptical in terms of why it's been asked. So I don't know the context of this particular question. I simply stand by my historical comments.JournalistDo you think in light of what happened last week, Michael Ravbar came out quite strongly against Queensland Labor as that they have no economic plan and that the left faction was a bit not tapped into what everyone was thinking normally. So I just wanted to know whether that's something you think should happen at the state level?Kevin RuddWhat I know about the Murdoch media is that you have no interest in the future of the Labor government and no interest in the future of the Labor Party. What you're interested in is a headline in tomorrow's Courier-Mail which attacks the Palaszczuk government. I don't intend to provide that for you. I kind of know what the agenda is here. I've been around for a long time and I know what instructions you're going to get.But let me say this about the Palaszczuk government: the Palaszczuk government has a strong economic record. The Palaszczuk government has handled the COVID crisis well. The Palaszczuk government is up against an LNP opposition led by Frecklington which has repeatedly called for Queensland's borders to be opened. For for those reasons, the state opposition has no credibility. And for those reasons, Annastacia Palaszczuk has bucketloads of credibility. So as the internal debates, I will leave it to you and all the journalists who will follow them from the Curious Mail.JournalistDo you think Labor will do well at the election, Mr Rudd?Kevin RuddThat's a matter for the Queensland people but Annastacia Palaszczuk, given all the challenges that state premiers are facing right now, is doing a first-class job in very difficult circumstances. I used to work for state government. I was Wayne Goss's chief of staff. I used to be director-general of the Cabinet Office. And I do know something about how state governments operate. And I think she should be commended given the difficult choices which are available to her at this time for running a steady ship. [inaudible] Thanks very much.