Ditching superannuation changes heartless, unfair: Paul Keating

Two former Labor PMs have blasted moves to defer or stop the legislated increase in the superannuation guarantee to 12 per cent.

Paul Keating has lashed the proposed changes to superannuation.

Paul Keating and Kevin Rudd have blasted moves to defer or stop the legislated increase in the superannuation guarantee to 12 per cent, accusing the Morrison government of “heartlessness” and mounting “bullshit” arguments.

In a co-ordinated joint press conference on Monday afternoon, Mr Rudd in Brisbane and Mr Keating in Sydney came to the defence of the superannuation sector, which fears the government will use a landmark review into the retirement income system to junk a legislated increase in the superannuation guarantee.

“They want to gyp ordinary people by 2.5 per cent of their income for the rest of their life,” Mr Keating said from his Sydney home.

“This is cruel assault by (Scott) Morrison on the retirement income of working Australians, using cover of COVID to try to get away with it,” Mr Rudd added, suggesting Mr Keating deserved thanks for establishing the compulsory saving system during the 1980s and 90s as treasurer and prime minister.

“You know why we still have AAA credit rating — it’s because we have a huge bucket load of nat­ional savings,” Mr Rudd added. He said arguments that increases in compulsory super came at the expense of wages, a position advanced by Grattan, most economists and the Reserve Bank, had “no statistical foundation, no logical foundation”.

“Pigs might fly. It’s the biggest bullshit argument have ever heard,” he said.

Mr Keating agreed that workers wouldn’t get wage increases unless the super levy were increased. “There’s been no wages growth in eight years, so if they don’t get it in super, they won’t get it at all … This is grand theft, Liberal Party-style,” he said.

“The gall of it, the heartlessness of it, the unfairness of it … to say nothing of the broken election promise.”

Ahead of release of the retirement income review, expected before the October budget, support for the legislated increase has been dwindling.

Superannuation Minister Jane Hume has come under fire from the super sector after suggesting she was “ambivalent” about the increase.

Employer-aligned directors of large industry funds AustralianSuper and Cbus have started speaking out against the increase, which has been strongly backed by the Labor Party, the union movement, and the funds management industry.

Mr Keating also slammed the government’s early superannuation release policy, which is expected to see more than three million Australians withdraw more than $40bn from super accounts by the end of the year, to help them through the recession.

“Not to take a chink out of super, but to actually destroy it,” Mr Keating said of the policy. “They intend to do this in two ways … they want to drain money out of the bottom of the system, and stop money coming into the top of the system.”

The Abbott government delayed the scheduled increase in the guarantee, which is due to begin in July next year, rising to 12 per cent by 2025.

Mr Keating said going ahead with the increase was a “litmus test” for Josh Frydenberg, who has maintained that no final decision had been made on axing the superannuation guarantee.

Mr Rudd said superannuation gave retirees “decency, dignity and independence” in retirement, and without it, more people would be on the Age Pension.