Former PM Paul Keating ‘elitist’ over early super: Jane Hume

Financial Services Minister Jane Hume says early release super gives Australians a buffer in recession and allows them to build some resilience.

Financial Services Minister Jane Hume has savaged former prime minister Paul Keating’s comments over early release superannuation scheme.

Financial Services Minister Jane Hume has savaged former Prime Minister Paul Keating over his “galling” criticism of the government’s early super access scheme, saying his comments revealed how out of touch he was with ordinary Australia.

Speaking to The Australian a day after Mr Keating lashed the government’s decision to give workers early access to their super savings, Senator Hume defended the scheme for allowing Australians to build some financial resilience and provide a buffer through the nation’s first recession in three decades.

“Sometimes we actually have to hear from Paul Keating to remind us of how, while he may have made a good treasurer, he was rejected by voters as an arrogant and elitist prime minister. And I think he has just proven it all over again,” Senator Hume said.

“This is a time for support, for reassurance and for action from leaders, not for protection of legacy. That’s just irresponsible.”

Speaking at an industry super event earlier in the week, Mr Keating said the early access scheme placed the burden of the crisis on young and vulnerable workers, who were clearing out their entire super savings.

“Of the income support in Australia to date in this COVID emergency, $32bn has been found and paid for by the most vulnerable, lowest paid people in the country and $30bn has been provided by the commonwealth under JobSeeker and JobKeeper,” Mr Keating said.

“So instead of JobSeeker and JobKeeper carrying the main burden of income support from the get go, (it is being carried by) people ratting their own savings to the (extent) where 600,000 people — broadly young people — have no super accounts at all.”

Precarious position

Senator Hume said it was galling to see Mr Keating lecture Australians who were in a very precarious position.

“This is not welfare that people are accessing, it is their own savings. And it isn’t compulsory, it is just one suite of the government’s response to the COVID-19 crisis,” she argued.

“For thousands of Australians, the government support through JobKeeper, and JobSeeker has been what’s kept them afloat. But it’s been their ability to access a limited amount of their own savings that has allowed them to pay down debt, to pay bills, to give them peace of mind at a really distressing time.

The early access scheme, in operation since April, allowed workers to access up to $10,000 of their retirement savings, tax free, last financial year and a further $10,000 this financial year. The scheme was originally due to run until late September but the government last month extended it until December 31.

Treasury originally estimated $27bn would be sucked out of super funds by workers hit by the COVID-19 crisis but last week amended its forecast to $42bn. More than 2.6 million Australians have so far accessed their super savings through the scheme, while Industry Super Australia has estimated more than half a million workers have completely cleared out their accounts.

Senator Hume questioned the veracity of the industry super figures on workers wiping out their savings.

“I think the misuse of these numbers is irresponsible, alarmist and has been used for political purposes. And I think it demonstrates that Labor, and certainly Mr Keating, are very much out of touch with what’s going on the ground with ordinary Australians.”

Separately, Senator Hume called on businesses to avail of the super guarantee amnesty in place until September 7. The amnesty allows businesses to back pay any lapse in super payments that should have been made between 1992 and 2018 without incurring any penalties.

Acknowledging the difficulty some businesses would have in back paying super in the current environment, Senator Hume said payment plans were available but they needed to be in place by next month’s cut-off date.

“The ATO will work with businesses that may not be in a position right now to pay the unpaid super. A payment plan extending beyond the amnesty can be put in place, but it can’t be left to the last minute.

“Don’t leave it to the start of September, you’ll simply run out of time. Make sure you address this now, the ATO is willing to be sympathetic but the amnesty will not be extended.”