Bill Kelty, the man who played a leading hand in getting the unions and the Labor government to agree on the Prices and Income Accord in 1982 and paved the way for the introduction of the superannuation guaranteed in 1992, has pleaded with people and policy makers to stop making changes to superannuation beyond scheduled rate increases.
Speaking on a panel at the inaugural Crescent Think Tank in Sydney today, Kelty implored people to “stop all the changes to super, stop all this nonsense and stop threatening it all the time.”
“Leave it as it is,” the former ACTU leader said. “For God’s sake, leave it alone so that the generation can get confidence again in the system.”
Kelty acknowledged that the super system isn’t perfect, and the scale of funds – almost $3 trillion – warrants getting it right. “But people are making generational decisions and they’re tired of governments coming in and changing it,” he said.
His plea comes on the back of Finance Minister Mathias Cormann’s comments yesterday that the government’s planned retirement income review “will not lead to any change”, because voters are tired of the government “tinkering” with the superannuation system.
The Labor party was famously – and surprisingly – defeated in the federal election early this year, largely because of a plan to abolish excess franking credits, which the incumbent Morrison government called “class warfare” and large swathes of the mature-age electorate railed against.
Kelty’s comments ran along the lines of voters looking for consistency in the system that largely houses their life savings.
“Leave it alone so people can say it’s my money for my generation,” he said.
Kelty, who also served as director of the Reserve Bank from 1987 to 1996, said the only real change we should be looking at for superannuation are the existing scheduled increases to the superannuation guarantee rate from 9.5 per cent to 12 per cent between 2021 and 2025.
“Not one employer, has said they will increase wages if the superannuation guarantee increase is pulled back… not one,” he said, before calling the debate “nonsensical”.
Also on the panel was Ex- Liberal party leader John Hewson and the inaugural chair of the Crescent Think Tank, Emeritus Professor Dianne Yerbury. Hewson agreed with Kelty that stopping super increase wouldn’t automatically lead to wage increases.
“Bill’s right, any employer will tell you its never a good time to increase super,” Hewson said. “The wage system has to be looked at separately.”