17 August 2020


SUBJECT: Superannuation.

STEPHEN JONES MP, SHADOW ASSISTANT TREASURER: Thanks for your time this morning. I just want to confirm that Australian Labor is 100% committed to protecting the retirement savings of working Australians. Labor created the superannuation system and it has transformed this country. It's providing more dignity and more security in retirement for older Australians, but it's also creating a pool of national savings which are more critical now than ever. This is a savings tool which is available to invest in local enterprise, creating jobs and we will be calling on this over the years to come to help us recover from the COVID-19 recession. To hear from the minister responsible for Superannuation this morning that she's ambivalent about committing to an election promise, that she's ambivalent to implementing the legislation parliament has already enacted is nothing short of outrageous. We know that the government set up this retirement incomes review as a stalking horse for their campaign to attack workers' superannuation. They've been sitting on it for the last three weeks. We learned this morning that the minister and the treasurer has got the 650 page report and that they won't release it. We demand that the report is released and we demand that the government for its commitment to superannuation. The superannuation that they went to the last election promising that they would leave intact. It's time for them to stand up today and the confirm that commitment.

JOURNALIST: What do you say to Scott Morrison saying that COVID changes everything, it's a significant change and is now the right time to be increasing the cost of employing workers in the Australian economy?

JONES: Can I make this point? If we listen to the Liberal Party, there would not be one dollar of superannuation in a worker's superannuation fund today because they have opposed the first increase and every single dollar that has gone into superannuation since then. So that 30 billion dollars that has been taken out of superannuation to help workers through this hardship, not one dollar of that would be there today if we listen to the Liberal Party. I don't think we should be listening to the Liberal Party on superannuation. They have opposed it from the very beginning and every argument they are rolling out today they have rolled out for the last 30 years. We support superannuation. It is a very modest increase, a very modest increase indeed. And after over 500,000 Australians have completely wiped out their superannuation savings, we think that superannuation of workers have done the heavy lifting in stimulating the economy. It's time for the government to step forward. Over 30 billion dollars worth of stimulus has come from workers' own superannuation accounts because the government hasn't got a plan for jobs and hasn't got a plan for economic recovery. Surely they have got something better than this than to renege on an election promise, to renege on something that's already legislated and say to those workers; we're going to have to pay twice, pay once by withdrawing your superannuation and you're going to pay again because we're not going to stick to our election commitment.

JOURNALIST: It’s not just the Liberal Party though, ACOSS and Grattan Institute have both said that the legislated super risers could restrict wages growth. So isn't that going to offset any benefit? 

JONES: I'm so glad you've asked me of this issue about wages. Let's just go through the numbers. 1/4 of Australian workers are on awards. The Fair Work Commission has already handed down a decision which are going to determine award based wage increases for the next two years. So they're already out of the picture. They made that decision in the full knowledge that the SGL was set to go up by point five percent in July next year. So one quarter of the workforce already out of the picture. Another one quarter of the workforce, let's call them government employees, have had their wages frozen by a government decision and they already have above SGL increases anyway, so they're out of the picture as well. Then we've got about a 1/5 of the workforce that are independent contractors and self-employed, they’ll put in place their own arrangements. And then the rest of the workforce that are on existing enterprise agreements, so can we not just get caught up in what sounds like a superficial attractive argument but when you drill down into the detail, it's simply not true.


JONES: There is an enormous benefit to individual workers and to the economy and the government. Dignity in retirement, less reliance on the pension, taking the relief off the budget and ensuring that we have a pool of domestic savings, over one trillion dollars in domestic savings, a pool of domestic savings which is available for investment in Australia. It's transformed Australia from a nation that borrows to a nation that lends to the rest of the world. Why would you want to pull that apart? Now, yes, we admit that there is a relationship, but let's not buy this argument that workers are going to get a wage increase if we freeze superannuation, that's simply not true and Jane Hume herself admitted this this morning when she said; yes, if we do this, we hope things will improve but we can't guarantee it.

JOURNALIST: What about the effect on hiring though? Do you dispute that increasing the cost of employment will have an effect on jobs? 

JONES: If this was a massive increase, you might have an argument but it's a very modest increase indeed. If you're a worker on $50,000 a year, we're talking about $4.80 a week, not a huge amount. But after the devastation that has been done to workers' superannuation over the last four months, we've got to get back to the project of making Australians more self-reliant in retirement and having greater dignity in retirement. Self-reliance once was a Liberal value, by the way. It was something that they once stood for. Quite literally what Jane Hume and these Liberal rebels on the backbench are saying to Australians is; don't prepare for your own retirement, rely on the pension and hope in the face of past practice, by the way, that some future government is going to be more generous about pension increases than any government in the past has been. 

JOURNALIST: Speaking of Liberal and democratic values, Australia seems to be alone in the western world in not letting its people out of the country. Should the government be relaxing some of those restrictions?

JONES: I know that some people are able to get out of the country if there are work or other commitments. I think health advice has got to be given primacy in all of this, so if Chief Medical Officer says or any other state medical officers, this is the significant health risk then we should be following that advice. But I know from my own experience, I’ve got a nephew who's about to get on a plane to head over to London for a work commitment. I'm sure they're many thousands of Australians who are in a similar position. I think to the greatest extent that it is consistent with their health advice and we should be assisting Australians and fulfilling their employment and other obligations. 

JOURNALIST: If the retirement income review finds that the benefits of superannuation increases are limited would Labor accept that?

JONES: Look, I don't think anyone is going to argue and the discussion paper of the superannuation retirement income review made it quite clear that superannuation was an important part of our retirement income system. The question for the government is why won't it released that report? It releases reports when they're happy with the response. Why are they sitting on a 650 page report they've had three weeks, when they want to ignite a debate? When they're thinking out loud about changing our superannuation system, but they won't release the report which was supposed to be the evidence based on which this is all formed.

JOURNALIST: Labor seems to be offering some pretty serious intellectual economic heft around this today. Ken Henry who was more associated your side of politics than the Liberals, ACOSS, the Grattan Institute are supporting the negative gearing and franking policies. And the RBA Governor hasn't been scared to criticise this government on a whole lot of other things fiscal policy. Why they are wrong and why should people believe that politicians on Labor’s side and the super funds that they are close to, are right?

JONES: Of course, we always have the greatest respect to anything that the Reserve Bank Governor has to say. We listen very carefully to that. I’ve just gone through what's going to happen with wages in the next 12 months if the basis on which the government is proposing to freeze, cancel and reverse a legislative superannuation increase of point five percent in July next year, is that it's going to boost wages. Well that just doesn't stand up to scrutiny because those wage rises for the majority of the workforce are either existent, frozen or existent baked in. So it sounds like an attractive argument when you look at it from 3 thousand feet, but when you get down into the workplace and look at what is determining wages in most workplaces, one quarter of the workforce is award dependent. The Fair Work Commission made a decision that will flow through next year. About the same amount of government employees, governments will decide what happens with wage increases in those areas. Most of them are frozen wage increases. SGL, no impact on that. You're left with a very small group some of which are already covered by enterprise agreements, nothing we do SGL is going to impact on that next year either. That leaves independent contractors and self-employed who determine their own arrangements. Yeah, we're always listening. Of course, we always listen with respect to what the Reserve Bank Governor has to say, but on this one, we think those wage increases already baked in or the absence of those wage increases already baked in, what's a cancellation of a point five percent increase in July next year going to do anyway. Is the government going to mandate a wage increase for all workers, they haven't said that and they won't do that.

JOURNALIST: You said that might be the case over two years for some of this already baked in, but this is going to have a permanent ongoing impact on wages and employment. I think you’ve got to look beyond the two years and take into account the ongoing impact this is going to have in the long run.

JONES: Sure, which is why John, we say the government has to have a bigger plan for the future of our workforce. Surely the government is going to have to have a bigger plan economic recovery then freezing workers superannuation. Is that the extent, is that really the extent of their economic plan for the future? Freezing that part of the economy which has done so much of the heavy lifting to get us through the crisis. 30 billion dollars worth of stimulus, half a million workers already wiped out their retirement income savings. What happens if this isn't the last time we faced something like this and you're half a million workers who don't have access to their superannuation savings? I think we've got to have a bit more of a robust think, a bit more of a robust plan about how we recover from this and asking the workers of Australia to pay for this twice is not a robust plan. Thanks very much.