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.
RELATED ARTICLES
About the author
About the author
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Aware Super appoints Simon Warner as Chief Investment Officer
Aware Super has announced the appointment of Simon Warner as Chief Investment Officer, effective 1 December 2025, following a competitive global search to replace outgoing CIO Damian Graham, who ...Read more
Superannuation
Employers call for pragmatic safeguards to ensure Payday Super reform succeeds
Employment Hero chief executive Ben Thompson has urged the federal government to introduce a phased rollout and reciprocal safeguards to support small businesses as the Payday Super reform approaches ...Read more
Superannuation
Aware Super elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
Superannuation
Payday super legislation promises fairer retirement for part-time and casual workers
In a landmark development for the Australian workforce, the recently passed Payday Super legislation is set to transform the retirement landscape for countless part-time and casual workersRead more
Superannuation
Payday Super passes as Employment Hero, OZEDI and Zepto unite to help small businesses meet new seven-day payment rule
With the Payday Superannuation Bill officially passing through Parliament, Australian businesses are now less than eight months away from a major shift in how superannuation contributions are made — ...Read more
Superannuation
Aware Super appoints Simon Warner as Chief Investment Officer
Aware Super has announced the appointment of Simon Warner as Chief Investment Officer, effective 1 December 2025, following a competitive global search to replace outgoing CIO Damian Graham, who ...Read more
Superannuation
Employers call for pragmatic safeguards to ensure Payday Super reform succeeds
Employment Hero chief executive Ben Thompson has urged the federal government to introduce a phased rollout and reciprocal safeguards to support small businesses as the Payday Super reform approaches ...Read more
Superannuation
Aware Super elevates tech leadership with strategic appointment of Richard Exton
Aware Super, one of Australia's largest industry super funds, has announced a pivotal appointment to its executive team, underscoring the growing importance of technology, data, and artificial ...Read more
Superannuation
Rest appoints Marina Pasika as interim head of private markets
Rest, one of Australia's largest profit-to-member superannuation funds, has announced the appointment of Marina Pasika as the Interim Head of Private Markets. This decision comes as the fund embarks ...Read more
Superannuation
Payday Super bill introduces new challenges for SMBs, reveals Employment Hero CEO
The introduction of the Payday Super bill to the Australian Parliament has sparked a significant response from the business community, particularly among small and medium-sized businesses (SMBs)Read more
Superannuation
Rest urges Parliament to expedite payday super legislation
In a significant move towards enhancing retirement outcomes for Australian workers, Rest, one of the country's largest profit-to-member superannuation funds, has expressed strong support for the ...Read more
