Former secretary of the Australian Council of Trade Unions (ACTU), Bill Kelty, has joined Paul Keating in re-writing the history of Australia’s superannuation guarantee (compulsory superannuation).
Kelty, like Keating, is now claiming that lifting the superannuation guarantee from 9.5% to 12% would not lower workers’ take-home pay. From The AFR:
The super guarantee is due to rise to 12 per cent by 2025 but a number of Liberal backbenchers and the Grattan Institute have been pushing for it to remain at 9.5 per cent.
Mr Kelty said the “silly group” of backbenchers who had “never negotiated a wage rise in their lives” should be ignored…
The idea that pausing the super guarantee led to wage rises was laughable, he said. Instead, the money would end up in the pockets of shareholders.
“I do not know one employer who says, ‘I note the super guarantee has been deferred, I’m going to give you a wage increase'”…
“Even if [the Coalition] moves to 12 per cent and goes to the next election saying we want to give low-paid people the option to take their super [as wages], it will be stealing money,” he said.
“It is a terrible thing to do to young people. It is a terrible thing to do to low-paid workers.”
These claims by Bill Kelty completely contradict how compulsory superannuation was established under the Prices and Incomes Accord signed between Kelty (as secretary of the ACTU) and the Hawke Labor Government.
This accord was developed with the specific goal of tempering wage growth in exchange for social security payments and superannuation.
The Government paper announcing the establishment of compulsory superannuation in 1992, Security in Retirement: Planning for Tomorrow Today, explains this goal explicitly:
A major challenge for retirement incomes policy is the need for current consumption to be deferred in favour of future income in retirement …
No loss of remuneration is involved in meeting this national challenge. What is involved, rather, is forgoing a faster increase in real take‑home pay in return for a higher standard of living in retirement.
So too did Paul Keating 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. The fall in unit labour costs and the upward shift in the profit share during the period of the SGC is simply a matter of statistical record. It is not a matter of argument…
Does Bill Kelty also suffer from amnesia?
Raising the superannuation guarantee from 9.5% to 12% would simply ensure that nominal wages grow by less than they otherwise would, with the difference going into workers’ superannuation accounts. This is how the system was specifically designed when Bill Kelty and Paul Keating established the superannuation guarantee in 1992.
It is also why the Henry Tax Review, the Australian Treasury, the Parliamentary Budget office, and the Grattan Institute have all cautioned that raising the superannuation guarantee would lower workers’ take-home wages.
Stop lying, Bill.
