Former prime minister Paul Keating has demanded the treasurer stare down the “pipsqueak ideologues” and “bumpkins” on his backbench and dismiss calls to ditch legislated increases to the 9.5 per cent compulsory superannuation guarantee.
Mr Keating, who as treasurer between 1983 and 1991 played a leading role in the introduction from 1992 of the superannuation guarantee, on Monday told reporters returns on labour productivity rises since 2012 had all gone back to companies.
He said that with wages likely to remain stagnant throughout the COVID-19 pandemic and its aftermath, the super guarantee increase was the only rise workers might get.
The current super guarantee has sat at 9.5 per cent since 2014 and is legislated to increase to 10 per cent next year before gradually rising to 12 per cent.
A number of coalition backbenchers have called for the annulment of this legislation to reduce strain on businesses, a measure not yet ruled out by treasurer Josh Frydenberg.
The legislated increases had already been delayed a number of years in 2014 by former prime minister Tony Abbott and treasurer Joe Hockey.
“Working people have contributed just on 10 percentage points of labour productivity since 2012 and none of it has gone to wages, zero,” Mr Keating told reporters.
“The only bit that can go to wages is the 2.5 per cent super (increase).
“We’ve had 10 per cent labour productivity … what is the superannuation guarantee asking for? It’s asking for a quarter of the productivity to come back to them.”
Mr Keating also accused government members of hypocrisy as they take home a 15.6 per cent superannuation guarantee while seeking to cancel a super rise for others.
He said the super guarantee issue would serve as a “litmus test” of Mr Frydenberg’s ability to enact structural change in the economy amid the pandemic.
“The gall of it, the heartlessness of it, the unfairness of it,” Mr Keating said.
“This malarky they talk of ‘if they take it in super, they won’t get it in wages’ … as the (statistics) make clear, there’s been no wages growth for eight years and there’s not going to be.
“It’s a dipstick into whether the government has any ideas about the future.
“The so-called party of business (in Australia) does not understand capital.”
Mr Frydenberg last week pointed to Reserve Bank governor Philip Lowe who recently said increasing the guarantee could reduce wages or delay wage increases over the next few years.
Shadow treasurer Jim Chalmers accused Prime Minister Scott Morrison and Mr Frydenberg of seeking to break their election promise to commit to the super guarantee increase.
Former prime minister Kevin Rudd on Monday echoed Mr Keating’s remarks, telling reporters the government would be guilty of a “cruel assault” on Australians’ retirement income if it annulled the super guarantee after already permitting some to raid their accounts.
Australians negatively affected by the COVID-19 pandemic can until the end of the year extract up to $10,000 from their superannuation accounts.
“When those working people go and 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,” Mr Rudd said.