I grew up a Keating child. By that I mean I was politicised in the Keating era. As such, I was strong fan of liberal economics with a social conscience and engagement with Asia. Keating’s flair and quick wit has always charmed as well.

But, in recent, years I have found myself more and more distant from the Labor greybeard. What was visionary in the eighties has become more and more stodgy today. Like many pollies he was constantly guilty of revisionism too.

Take his recent statements on super. After the Grattan Institute on Friday released analysis showing that raising Australia’s superannuation guarantee (compulsory super) to 12% would lower wages by $20 billion, the architect of Australia’s compulsory superannuation system, Paul Keating, outright dismissed the findings over the weekend, claiming wages would be unaffected:

Mr Keating dismisses the Grattan Institute’s modelling on superannuation, saying Labor’s plan to lift the amount employers must contribute from 9.5 per cent to 12 per cent will not cost wages.

“That is a lie … It’s a lie, because there’s been no wages growth for five years and there’s not likely to be,” the former prime minister says, arguing that raising the guarantee is “the quickest and easiest way” of ensuring workers get a bigger share of the productivity gains “that companies are sitting on”.

“I mean, the Grattan Institute is bordering on the wicked. It’s bordering on the wicked,” he says, accusing the think tank of “trying to rob ordinary working people” of the extra money.


This is plain wrong. The cost of compulsory superannuation contributions unambiguously falls on the employee, not on the employer.

In addition to the Grattan Institute, the Parliamentary Budget Office came to this very same conclusion last month:

“The increase in the superannuation guarantee to 12 per cent will likely lead to lower wage increases, shifting a greater proportion of earnings into the superannuation system”.


As did the Henry Tax Review:

“Although employers are required to make superannuation guarantee contributions, employees bear the cost of these contributions through lower wage growth. This means the increase in the employee’s retirement income is achieved by reducing their standard of living before retirement…

The retirement income report recommended that the superannuation guarantee rate remain at 9 per cent. In coming to this recommendation the Review took into the account the effect that the superannuation guarantee has on the pre-retirement income of low-income earners”.

As did Bill Shorten nine years ago when he was Minister for Financial Services & Superannuation in the Gillard Labor Government:


Because it’s wages, not profits, that will fund super increases in the next few years. Wages are the seedbed of the whole operation. An increase in super is not, absolutely not, a tax on business. Essentially, both employers and employees would consider the Superannuation Guarantee increases to be a different way of receiving a wage increase.

As did Paul Keating himself in 2007:

“The cost of superannuation was never borne by employers. It was absorbed into the overall wage cost. Indeed, in each year of the SGC growth between 1992 and 2002, the profit share in the economy rose…

“In other words, had employers not paid nine percentage points of wages as superannuation contributions to employee superannuation accounts, they would have paid it in cash as wages…

“When you hear conservatives these days speak of superannuation as a tax on employers they are either ill-informed or they are lying.”


I mean, hello, is this memory loss?

Electoral revisionism is one thing. But when an ex-PM starts to poison the contemporary national interest with dangerously vestigial views about security then the frame of reference moves from rolling one’s eyes to alarm:

Mr Keating says a Labor government would make “a huge shift” in Australian-Chinese relations, while calling for a “clean out” of spy agency ASIO.

“I think what we have to do is recognise the legitimacy of China,” he says.

“China’s entitled to be there … The fact that 20 per cent of humanity has dragged itself from poverty, I mean, is this illegitimate? Of course it’s not illegitimate. It may not suit the United States as a second rate economic power in the world.”

As for the security agencies that would be advising Bill Shorten as prime minister, he says: “You’d clean them out. You’d clean them out.”

“When you have the ASIO chief knocking on MPs’ doors, you know something’s wrong … When the security agencies are running foreign policy, the nutters are in charge.”

Mr Keating praises China as “a great state” and the world’s soon-to-be-largest economy, saying: “If we have a foreign policy that does not take that into account, we are fools.”

Keating’s “great state” is a tyranny that has 1-2m of its Muslim peoples undergoing tortured “re-education”. The dictator is in power for life. The Chinese Communist Party (CCP) has total control of the media and is rolling out technology everywhere to enforce its “social credit score” regime. It imprisons, tortures and executes those who oppose it. Its economic model is pure corruption. It has forcibly occupied neighbours and is strangling the once vibrant democracy of Hong Kong. It is militarising North Asia in contempt of international law and ring fencing democratic allies in Korea and Japan. It has just recently spent several years violating Australian sovereignty by bribing its way to power in the media and parliament.


There were more attacks on the security agencies at Domain:

“They’ve lost their strategic bearings, these organisations.”

He added that they had “gone berko” over the threat of Chinese interference and influence in Australia.

…On Canberra’s relations with Beijing, Mr Keating said there was “healing to be done”.

…He attacked the role of John Garnaut, a former Sydney Morning Herald and Age China correspondent who became an adviser to former prime minister Malcolm Turnbull and co-wrote an influential, classified report on Chinese influence in Australia.

Mr Keating said the spy agencies had “gone berko” since that report was written.

First, I can vouch for John Garnaut. No more sane and courageous journalist exists in Australia. His integrity is above reproach and his China sources second to none. He has personally and professionally risked everything in bringing the truth of CCP interference in Australia to light.


Second, the Australian response to CCP activities has been extraordinarily moderate. We exiled one bloke and created a public register for foreign lobbyists plus refocused Pacific strategy to prevent Chinese quasi-militarisation via the BRI. These are only the most basic steps in defending Australian freedom.

Imagine for a moment what would happen if Australian billionaires were uncovered bribing CCP officials in Beijing to give up on the One China policy. When some poor sod from Rio Tinto bribed a few folks over iron ore prices he spent nine years in prison. Were Australians uncovered messing with the CCP’s core interests then it would be show trials, public executions and massive economic sanctions. We have been fantastically restrained.

I’m no geopolitical pansy. A certain amount of this domestic interference comes with the territory of great power relationships. Fine.


I fully accept that a healthy skepticism for one’s own security agencies is essential in government. Fine.

But for Paul Keating to erase from the discussion every dodgy act that the CCP has been up to, all of it antithetical to Australian values and interests, and in doing so demonstrate a shockingly Orwellian principle that is supposed to guide the incoming government in foreign and domestic security policy, that is very far from fine.

The power of the CCP is obviously dangerous to the Australian way of life, which is based upon its opposite in liberal democracy. Australia’s only protection against it is US enforcement of the liberal democratic order it imposed upon Asia post-WWII. This is not some idle notion. It is the raw truth of power. The US liberal empire that, although deeply flawed, for the most part aims to govern on principles of freedom of expression, freedom of self-determination, freedom of commerce and the rule of law.


To think that replacing this system with one that is governed from Beijing in its own image will lift your lot in life is jabbering lunacy.

Moreover, if Labor follows the dictates of such thinking then it is clear and present danger to the country.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.