Former Prime Minister Kevin Rudd has joined the superannuation liars circle, claiming that it is “bullshit” that increases in the superannuation guarantee (SG) comes at the expense of lower take home wages:
Former Prime Minister Kevin Rudd baulked at the suggestion it would depress wages.
“Pigs might fly,” Mr Rudd said.
“That is the biggest bullsh*t argument I have heard.
“We’ve had the Morrison government rip out $40 billion plus from people’s existing superannuation accounts…
“Well, that’s all very fine and dandy but when those working people go and retire in the decades ahead they will have gutted their retirement income.”
“Bullshit”, hey Kevin?
Then why did Bill Shorten as Minister for Financial Services & Superannuation under your Government twice acknowledge that compulsory SG rises are paid for by workers via lower wages?
First in a speech:
“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”.
And also when interviewed by Neil Mitchell:
NEIL MITCHELL:
Okay. When superannuation goes up from 9 per cent to 12 per cent, who pays?..
BILL SHORTEN:
What happens with superannuation is that people’s pay goes up anyway. It goes up each year, by and large. What will happen is that superannuation, the increases to superannuation, will be absorbed as part of people’s pay rises.
…they get a pay rise, of which some will probably go in super, yes…
NEIL MITCHELL:
Okay. So you’re saying that the superannuation increases will be paid for by absorbing money out of the wage increases.
BILL SHORTEN:
That’s the evidence…
NEIL MITCHELL:
Well, so, just to get it clear, business will not be paying an extra dollar, right?
BILL SHORTEN:
No, I can’t see that business will be paying any more in the future than they otherwise would have been if the superannuation changes hadn’t gone through. But what I do recognise is that a portion of what would have been employees’ increases will go into compulsory savings, which is concessionary taxed.
Let’s also recall that the Henry Tax Review, which was commissioned by Kevin Rudd, also explicitly stated that increases in the SG would be paid for via lower take-home wages:
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.
Because of this, the Henry Tax Review explicitly recommended against lifting the SG because of its punitive impact on lower income earners:
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.
The rest is history. Kevin Rudd ignored the Henry Tax Review’s findings and legislated to lift the SG to 12% anyway. But Kevin Rudd has conveniently forgotten those details.
Whenever former Labor party hacks like Kevin Rudd claim that the Coalition is working against people’s standards of living in retirement, they might want to remember that it was the Rudd Government that increased the eligibility age for the Aged Pension from 65 to 67:
The ALP and Kevin Rudd boosted the pension age from 65 to 67.
Yet ALP people keep telling me how bad the LNP is for your retirement.https://t.co/BWRYWtl6Jl
— Cameron Murray (@DrCameronMurray) September 1, 2020
So basically, Kevin Rudd chose to fatten his industry super mates, at workers and taxpayers expense, by increasing the SG while at the same time restricting Aussie’s access to the Aged Pension – Australia’s genuine non discriminatory retirement pillar.
The only one bullshitting here is Kevin Rudd.
