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Government could dismantle super: Hewson

Sarah Kendell
— 1 minute read

A former Liberal Party leader has added fuel to political speculation that the government may be preparing to dismantle compulsory super, saying the Coalition was using “any argument” not to increase super entitlements for workers.

Addressing the ACTU’s Emergency Super Summit virtual event on Monday, former Liberal Party leader John Hewson said the current debate around increasing the super guarantee was “a test of the government’s capacity to think strategically” around the longer-term challenge of the ageing population.

“This is not a political issue, it’s not about the need to exit the COVID recession – it’s about longer-term strategic challenges,” Mr Hewson said.

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“It’s a challenge for good and responsible government, it’s got nothing to do with the other short-term challenges that can be used as an excuse. 

“The government is now finding any argument not to [increase the SG]...if you step back you have to wonder if their aim is to kill off compulsory super altogether.”

Mr Hewson said while the super system could be improved, Australia’s progress in the retirement space was “commendable” and should be protected against the government’s desire to bail the economy out of the short-term quagmire of the COVID crisis.

“It’s not to say the present systems are as good as they could be – we know the system discriminates against women, low income earners and casuals, and the concessions people might take advantage of are skewed heavily in favour of the wealthy,” he said. 

“The COVID recovery has become a test of whether to look at this issue in the context of the desperate need to recover from the recession – it’s a test of the government’s capacity to think strategically and stick to a reform agenda that is clearly in the national interest. 

“It’s an opportunity for dealing with a longer-term structural change that was started decades ago and needs to be finished.”

Mr Hewson pointed to successive Coalition governments’ preference for delaying or scrapping elements of the super contribution system, saying the current debate around increasing the super guarantee by a further half a per cent next year was based more on political ideology than economic expediency.

“Howard scrapped the original 3 per cent employee contribution when he came to power in 1996, and Abbott deferred the legislated path by six years, leaving employers stuck at 9.5 per cent,” he said.

“So it’s not defensible to say circumstances are tougher than they were when we last delayed the decision – that’s not an argument, it’s an excuse based more on ideology than an honest, objective assessment of the system and its weaknesses.

“It’s a litmus test of whether this prime minister understands the issue of super and is prepared to lead on that issue – if you want to claim expediency and tough times in a recession, that is an irresponsible attitude.”

 

Government could dismantle super: Hewson
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