Sally McManus, secretary of the Australian Council of Trade Unions, commented on the proposal after former prime minister Paul Keating took a swipe at the current government’s dismissal of indexing the legislation.
Keating was reported in various publications as saying that a young person today, on average earnings, will have more than $3 million upon retirement.
“This level of contributions and compound earnings will guarantee personal super accumulations in excess of $3 million at retirement, reducing the call by the age pension on the Australian budget to 2 per cent of GDP in the 2050s,” the former Labor prime minister said in a statement.
McManus said she believes the tax should be indexed “because you’ve got to make sure eventually people don’t end up there”.
“But that’s a very long time in the future. Super isn’t there to be a tax fraud. It’s there to make sure you’ve got a dignified retirement,” she said.
“I think that it does need to be indexed so I do support what [Paul Keating] is saying, but I don’t think there’s some urgent need to do so right now.”
However, Prime Minister Anthony Albanese repeatedly dodged questions on Keating’s comments on Sky News this morning.
“Paul Keating is right to support superannuation, and it’s a creation of the Hawke and Keating Labor governments that Paul Keating, of course, as treasurer, then as prime minister, championed superannuation to improve retirement incomes for Australians,” he said.
“We think it’s important for individuals’ retirement incomes, but it’s also important to take pressure off future budgets as well. These are very modest changes discussed. You stay on Paul. I’ll stay on superannuation. I’m not commenting on various things that you tell me other people have said.”
Earlier, Amanda Rishworth, Minister for Employment and Workplace Relations, also defended the government’s proposal, stating the legislation will only affect “people with very large balances of $3 million”.
“Of course, we listen to different views, and we listen to Paul Keating respectfully, as we do others,” she said.
“I think a lot of Australians feel that they are very far off from a balance of $3 million. I think if people checked their super balances today, they would feel very far off, going to 12 per cent helps with that.
“But of course, what we’re doing is a very modest change for those that have very large balances of $3 million. It is 0.5 per cent of account holders. This is a modest change. And it is about sustainability in our super system.”
She added that in the Australian taxation system, automatic indexation is not a feature.
“It’s not a feature for the increased contributions required by high-income contributors when they go over that threshold.”
“And it’s not a feature of our taxation system. So, it’s not a built-in feature of our taxation system currently as it stands.”
Ted O’Brien, Deputy Opposition Leader, said Keating is “dead right”.
“I can’t believe I’m on national television as a Liberal defending Paul Keating against the Labor Party,” he said.
“Labor’s new superannuation tax is super big, it’s super bad, and over time, millions of Australians are going to be captured. Paul Keating has belled the cat. And I don’t blame him for being upset. I mean, this is the Prime Minister who did establish the scheme, which was meant to be a retirement-saving scheme so families can go into retirement with wealth.
“Labor today, under Anthony Albanese, is turning it into a scheme for revenue collection. This is a blatant tax grab. And the younger you are as an Australian, the higher the chances are that you are going to be stung by Labor’s new super tax.”
Oh, so modest (repeated ad infinitum)…