Most read
‘Optimistic borrowers’ could endanger housing market, RBA says...
‘Optimistic borrowers’ could endanger housing market, RBA says...
Latest Podcast
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...
Home values up 30% (or are they); NFTs taking the world by storm, and why Keatin...
Resources
There is $17.5 billion in lost and unclaimed super across ...
There is $17.5 billion in lost and unclaimed super across ...
Retirement
Will Aussies be forced to ‘eat their own homes’ for lack of super?
The architect of Australia’s superannuation system believes members need between $300,000 and $500,000 in retirement, meaning that the rate of super will need to rise to 15 per cent.
Will Aussies be forced to ‘eat their own homes’ for lack of super?
The architect of Australia’s superannuation system believes members need between $300,000 and $500,000 in retirement, meaning that the rate of super will need to rise to 15 per cent.
In an ABC 7.30 special report, former prime minister Paul Keating said the government needs to continue to lift the rate of superannuation to 15 per cent, despite government ministers currently debating whether to grow it from 9.5 to 12 per cent by 2025.
“What superannuation is about is personal empowerment,” Mr Keating said on ABC 7.30.
“If you’ve got $300[,000] or $400[,000] or $500,000, you have options.”
Mr Keating warned that without these options, members will be forced to “eat their own homes”, with many retirees forced to downsize in order to fund an adequate retirement.
The program highlighted that the current model of compulsory superannuation is not enough for all Australians, with those who began work after the introduction of superannuation in 1992 unlikely to have enough in retirement.
“When it comes to the definition of what is an adequate retirement income, the metric for that is the replacement rate, saying it should be 65-75 per cent replacement rate of your working income,” Mike Callaghan, chair of the Retirement Income Review, said.
The former PM also opined that in a weak wage growth decade, the only pay rise workers may receive is through the lift of compulsory superannuation.
“The only way that ordinary working men and women are going to get any benefit from their own labour is the 2.5 per cent super.”
“If they don’t get the 2.5 per cent super, they get nothing,” he explained.
While weak wage growth continues to hamper the economic recovery, the Minister for Superannuation Jane Hume said members shouldn’t ‘fool’ themselves as wage growth rises will suffer if superannuation increases.
“It will come as a trade-off of wages and particularly wage growth,” Ms Hume said.
However, the former PM disagreed, noting that by their reasoning, wages should’ve already increased, highlighting superannuation must now increase.
“There has been zero real wage increase in the last 10 years,” Mr Keating said.
“It is the same as the parliamentarians, 15 per cent is optimum.
“Particularly now as yield from shares, yields from bonds have fallen so far, there’s no way a fund at 9.5 per cent can give you the accumulation I believe you need.
“So the answer is 15, currently it’s 12, but the government wants to put the skewers through the 12,” Mr Keating concluded.
About the author
About the author
Superannuation
The 7 reasons you can access your superannuation early
Following the government’s early access to super scheme closing, the ATO is reminding Australians of the sevens ways they can still access their superannuation early. ...Read more
Superannuation
Two industry funds explore merger
An industry super fund for the energy sector and another for the transport industry have entered into a memorandum of understanding towards a potential merger. ...Read more
Superannuation
How you could be $160k worse off in retirement
The government’s new Your Future, Your Super legislation could be casting a favourable light on “high-fee, poor-performing retail funds”, which could cost retirees as much as $160,000, accord...Read more
Superannuation
Veto legislation a step backwards on net zero emission targets
Australia’s transition to a net zero carbon emission future has come under jeopardy, with a major source of funding unlikely to be available following the passing of the government’s new Your Futu...Read more
Superannuation
‘Super to be regarded in the same breath as terrorism’ if reforms pass: expert says
Superannuation would be regarded “in the same breath as terrorism offences” if the veto legislation – part of the Your Future, Your Super reforms – passes Parliament, an industry expert has wa...Read more
Superannuation
Retirees aren’t sitting on their super: ASFA
The vast majority of Australians exhaust their superannuation in retirement, according to data that flies in the face of the Retirement Income Review. ...Read more
Superannuation
‘Home ownership is more important than super’: Senator claims
Senator Andrew Bragg is pushing for the adoption of a policy enabling Aussies access to their super for home ownership purposes. ...Read more
Superannuation
Why industry fund advertising could be on the rocks
Australia’s biggest superannuation funds have plenty of freedom to advertise their interests. That could be about to change. ...Read more
Home values up 30% (or are they); NFTs taking the world by storm, and why Keating thinks Aussies will be ‘poor’ in retirement
Listen now
Raging floods, the tech stock bubble and the ongoing SG debate
Listen now
Meet the Manager with Trilogy’s Philip Ryan: RBA rates and property price growth
Listen now
The continued property boom, ethical investing and engaging with your super fund
Listen now
Superannuation
The 7 reasons you can access your superannuation early
Following the government’s early access to super scheme closing, the ATO is reminding Australians of the sevens ways they can still access their superannuation early. ...Read more
Superannuation
Two industry funds explore merger
An industry super fund for the energy sector and another for the transport industry have entered into a memorandum of understanding towards a potential merger. ...Read more
Superannuation
How you could be $160k worse off in retirement
The government’s new Your Future, Your Super legislation could be casting a favourable light on “high-fee, poor-performing retail funds”, which could cost retirees as much as $160,000, accord...Read more
Superannuation
Veto legislation a step backwards on net zero emission targets
Australia’s transition to a net zero carbon emission future has come under jeopardy, with a major source of funding unlikely to be available following the passing of the government’s new Your Futu...Read more
Superannuation
‘Super to be regarded in the same breath as terrorism’ if reforms pass: expert says
Superannuation would be regarded “in the same breath as terrorism offences” if the veto legislation – part of the Your Future, Your Super reforms – passes Parliament, an industry expert has wa...Read more
Superannuation
Retirees aren’t sitting on their super: ASFA
The vast majority of Australians exhaust their superannuation in retirement, according to data that flies in the face of the Retirement Income Review. ...Read more
Superannuation
‘Home ownership is more important than super’: Senator claims
Senator Andrew Bragg is pushing for the adoption of a policy enabling Aussies access to their super for home ownership purposes. ...Read more
Superannuation
Why industry fund advertising could be on the rocks
Australia’s biggest superannuation funds have plenty of freedom to advertise their interests. That could be about to change. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
