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Retirement

Keating attacks super withdrawal as a burden on young Australians

  • August 06 2020
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Retirement

Keating attacks super withdrawal as a burden on young Australians

By Cameron Micallef
August 06 2020

Former prime minister Paul Keating has slammed the Morrison government’s controversial early access to superannuation scheme, saying it shifts the burden of economic stimulus onto younger Australians.

Keating attacks super withdrawal as a burden on young Australians

Keating attacks super withdrawal as a burden on young Australians

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  • August 06 2020
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Former prime minister Paul Keating has slammed the Morrison government’s controversial early access to superannuation scheme, saying it shifts the burden of economic stimulus onto younger Australians.

Keating attacks super withdrawal as a burden on young Australians

During an Industry Super Australia event, the man who brought in superannuation highlighted that younger Australians shouldn’t need to stimulate the economy through superannuation, due to low government debt relative to GDP.

“Of the income support in Australia to date in this COVID emergency, $32 billion has been found and paid for by the most vulnerable and lowest paid people in the country. That is the people who have withdrawn the full $20,000.

“$30 billion has been provided by the Commonwealth under JobSeeker and JobKeeper.”

“Instead of JobKeeper and JobSeeker carrying the main burden of income support. What we are finding is the main burden of income support is people ratting their own savings,” Mr Keating said.

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The former PM noted the ISA research, which has found that 600,000 younger people have completely withdrawn their superannuation savings under the government’s early access scheme. 

Mr Keating also pointed out that younger Australians are getting the double whammy of being asked to support the country despite politicians looking to stop superannuation rising to 12 per cent.

“The same things were said when I introduced the superannuation guarantee in 1993. Remember it went up 7 percentage points, up 1 per cent a year out of the recession of 1990,” Mr Keating said.

“A lot of the so-called economic commentators were saying this is not the time, the nation can’t afford this.

“Of course, the SG was completely affordable. We had the profit share in the economy rising, as we did the wage share. We had strong growth in employment all through the 1990s.”

The former PM also pointed out that since 2013 there has been no real wage growth, while productivity growth has increased by 9.6 per cent.

“None of this has been distributed to wages. It all went to the balance sheet of companies. So, the proponents of the SG going to 12 per cent are saying there’s 10 per cent labour productivity banked, and we are asking for a quarter of it back,” Mr Keating said.

Mr Keating finally pointed to an ageing population, with the burden falling on younger Australians.

“I think the killer point is this. When I introduced the SG, six and half people between 15-65 [in the workforce] maintained one person aged over 65. It has fallen to 3.5 now and falling,” Mr Keating said.

“So, we will reach a point where three Australians will be carrying each retired person for the public pension and public health,” the former PM concluded.

Keating attacks super withdrawal as a burden on young Australians
Keating attacks super withdrawal as a burden on young Australians
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About the author

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Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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