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Thanks for the opportunity to talk to you this afternoon. I know you’re keen to discuss the challenges facing the Financial Planning profession, and the woeful job the Government has done in standing up the new professional standards body and rolling out an accreditation system.
Before we deal with that, I’d like to touch on a matter which cuts across every aspect of the retirement savings. It’s the attack on the very foundation of universal superannuation itself.
So much of the noise going on about superannuation at the moment comes from politicians who get 15% super themselves, but don’t support superannuation for others and want to knock it off. That would be a disaster for the country. The challenge of paying for unfunded pension liabilities has not gone away. If anything it’s got bigger as the Governments budget problem and debt grow on a monthly basis.
Of course the Government’s budget problems would be even bigger if it hadn’t used superannuation as a privatised stimulus program through the early access scheme. A lot of the money that has been released through the scheme has gone to people in hardship or who are afraid that are about to enter financial hardship. Labor welcomes that.
But it is now very clear that the Government was more interested in privatising fiscal stimulus than responding to hardship. The Tax Office is the agency administering the scheme. They’ve taken a hands-off approach to assessing eligibility. 3 million claims totalling $32 billion have been processed. This is more than the amount of money spent of JobKeeper to date.
There is now a mountain of evidence that there are significant problems with the scheme. Millions have been stolen in fraud, and independent research from research firm AlphaBeta raises significant questions about the administration of the scheme.
The point is simple: if the Government wanted to use superannuation to subsidise its own stimulus package – they should have just said so. We’d have had a very different debate. One which questions the burden that this privatised stimulus is placing on young Australians now and into the future.
Industry analysis has shown that the aggregate loss of savings for Australians under the age of 35 is more than $44 billion. The loss of savings across all age groups is in excess of $100 billion. This is bad, but it gets worse.
Now there’s a campaign to cut superannuation being pushed by the Prime Minister and Jane Hume – now known as the Minister for Ambivalence. Most of the people pushing this barrow have opposed super from the very start. If we’d listened to them there would not have been one cent to use during this pandemic. If they have their way this time, it is ordinary workers who will be worse off.
Cutting super is a pay cut, pure and simple. But it’s worse than that. Less money now, and less money in retirement. We know this to be true.
The Abbott Government cancelled scheduled super increases, arguing it would improve pay for workers. Wages have flat-lined. People might be fooled by this trick once, but they aren’t mugs. They won’t be fooled again.
So it is time for people to stand up to the Government on this. They promised they wouldn’t cut super. They must keep that promise.