Cloud hangs over future of super under Coalition

AUSTRALIA has one of the largest, best performing and well governed superannuation systems in the world.

In the 1970s and 1980s unions campaigned for the right of millions of workers to have workplace superannuation for the first time, and to have their contributions made to superannuation funds that placed the interests of members first.

Today, over 90% of workers in Australia are entitled to receive superannuation contributions. Millions will have more money to live on when they retire. Fewer will experience poverty and hardship when they stop working.

Abbott Factor-superannuation

Now all Australian workers will be entitled to an extra 0.25% contribution from their employer towards their superannuation savings. It is the first step on the way to a legislated increase of the Super Guarantee from 9% to 12% in 2020.

The Liberal-National Coalition has a long record of opposing progressive reform of super:

  • They opposed workers who campaigned for workplace superannuation in the 1970s and 1980s.
  • They opposed the introduction of compulsory employer contributions in 1992.
  • During the 1996 election campaign they promised to continue with the Labor government’s plans to increase compulsory super above 9% . As soon as they won the election they dropped their promise.
  • During the 11 years of the Howard Government they repeatedly refused to increase the rate of employer contributions above 9% to help workers save more for their retirement.

If elected in 2013 a Coalition government will put superannuation at risk.

  • The Coalition voted against the legislation which will increase employer contributions to 12% by 2020. Then Tony Abbott said he would not reverse the rise if he was elected. Then he said he would delay the full increase until 2022 – costing Australia $46 billion in lost retirement savings . The truth is many of Abbott’s senior colleagues don’t want any rise in contributions at any time. The Coalition doesn’t like that employers have to make super contributions. They can’t be trusted to increase retirement savings.
  • Under Labor over 3.5 million low-income workers no longer pay tax on their super contributions. This helps to boost their retirement savings. Tony Abbott has said he will restore the tax if he wins the election. This will force those that can least afford it to pay more and save less.
  • While wanting the lowest paid to pay more tax on their super, the Coalition wants the very wealthiest to receive generous concessions and tax-breaks on their contributions.
  • The Coalition wants to remove superannuation from the system of Modern Awards – weakening the ability of workers to secure better superannuation in their workplaces.
  • The industrial relations system helps to ensure that many workers’ super is paid to funds that are run on a not-for-profit basis. Tony Abbott wants to weaken this protection, making it easier for funds owned by profit-hungry banks to get their hands on super.
  • A Coalition government will increase uncertainty about the future of super. Tony Abbot says he will not make ‘negative unexpected changes’ to super if elected. But Coalition spokespeople later admitted that this commitment is only for the first year of a Coalition government. After the first year – who knows what they will do?