Former Prime Minister Paul Keating is locked in a war of words with the chief executive of the Grattan Institute, after the organisation called for plans to increase compulsory superannuation contributions from 9.5 to 12 per cent to be scrapped.
Speaking to Leigh Sales on ABC’s 7.30 program on Tuesday, Keating rejected the institute’s recent report, which also suggested raising the retirement age to 70 and including the family home in the Age Pension assets test, where the value is over $500,000.
The former PM, whose government introduced compulsory superannuation contributions in 1992, said Grattan CEO John Daley had a “miserable view” of the world, adding that while he believes super needs to be increased, the current suggestion of 12 per cent would “barely cut it”.
“When I introduced super 32 years ago, people retired at about 65 and they died about 83 or 85,” he said. “In the 30 years since, people are living three to five years longer, so people now live into their late 80s and the superannuation pool isn’t large enough to maintain the sort of standard of living we wish for them.”
“The privileged Australia where the wealthy people can have all sorts of assets but ordinary people are condemned to the pension,” Keating added. “This is $460 a week. I mean don’t whoop it up on 460 bucks a week. This is the John Daley view of the world.
“Daley’s recommending people work till 70, put their house in the assets test where now it isn’t. In other words, you eat your house. Work till 70, eat your house, and then basically find yourself at a certain point in your life where you just don’t have financial assets.”
However, Daley wasn’t going to back down without a fight and posted a series of tweets in response to Keating’s comments, along with extracts from the report itself.
“If Paul Keating actually read our report rather than repeating ASFA talking points, he would know we don’t advocate ‘two Australias’,” Daley said. “With 9.5% or 12% compulsory contributions almost all workers will have quite a lot of retirement income from super. He would know that with 9.5% compulsory contributions very few will be on a full Age Pension until late in life (and even then they will still be drawing down their super).”
He added: “If Paul Keating actually read our report rather than fear-mongering about low returns, he would know that most people will have enough in retirement even if returns are only 6.5% while working and 5.5% in retirement.
“If Paul Keating actually read our report rather than disparaging anyone who disagrees with him, he would know there’s lots of evidence that a higher Super Guarantee will lead to lower wages, including the Henry Tax Review, the Fair Work Commission, and leading academics. If Paul Keating actually read our report rather than making hand-waving assertions, he would know that savings won’t run out at 90 – multiple sources show that on current trends most Australians die with savings almost as large as when their retired.”