Transcripts

Radio National Breakfast 25/07/19

July 25, 2019

E&OE TRANSCRIPT

RADIO INTERVIEW

ABC RN BREAKFAST

THURSDAY, 25 JULY 2019

 

SUBJECTS: Liberals undermining super; wage stagnation; Newstart; productivity decline; Liberals’ union bashing; John Setka.

 

FRAN KELLY: Jim Chalmers is the Shadow Treasurer and he joins me in the Parliament House studios. Jim Chalmers, welcome back to Breakfast. 

 

JIM CHALMERS, SHADOW TREASURER: Good morning, Fran.

 

KELLY: Andrew Bragg says the super system is not working for Australians.  By the middle of this century, four out of five retirees will still be receiving an aged pension. What is it all about? If we are forced to pay compulsory super with fees attached - and I'll come to them - when so many people still end up relying on a pension, on the public purse?

 

CHALMERS: What the Liberals are trying to do here is they're trying to rob 13 million Australian workers of the superannuation increases that they need and deserve and were promised and have seen legislated. At a time when we've got rampant wage stagnation, we've got all of this wage theft, the Liberals want to come after people's superannuation as well. They're always looking for excuses to undermine super. They've been doing that now for three decades or so and we need to call them out for it when we see it.

 

KELLY: And Labor always defends super partly because it was a Labor Government who brought it in, partly because unions have massive interests in it. But just this week a new report from the Association of Super Funds found the median super balance for people between 16-64 is $154,000 for men and $122,000 for women: well below the $545,000 the industry says is needed for a comfortable lifestyle. Compulsory super has been in place for 27 years. Would you have expected a stronger balance sheet by now? Do you think Paul Keating would have expected a stronger balance sheet by now for individuals?

 

CHALMERS: First of all Fran, we defend superannuation partly because we've created it - we are proud of it - but mostly because superannuation is delivering a more dignified and decent retirement for Australian workers than would be the case otherwise. At the same time, it's amassed this $2.8 trillion pool of savings which allows our nation to invest in its own future. Superannuation has been a massive success for this country and we shouldn't run it down. It is the envy of the world. Other nations come here to observe our superannuation system and to try and replicate it.


KELLY: 
That is true but I suppose I'm asking you again would you have expected that the compulsory super savings for individuals would have been higher than now? $154,000 for men, $122,000 for women. These people have been saving compulsorily for a long, long time. Is there something wrong with the system that that's where the balance sheets of individuals at this point?


CHALMERS: Without compulsory superannuation those workers would have probably saved nothing.

 

KELLY: Well they might have paid off their house. They might have got bigger wages. Well that's the argument. That's the argument from even the Henry Tax Committee for instance.

 

CHALMERS: When superannuation was first conceived it was about a trade-off between superannuation and wages but I don't accept for a minute that what Andrew Bragg and others in the Liberal Party are saying right now is out of some concern for wage stagnation. We've had extraordinary wage stagnation under the Liberals. Their real agenda here is not to get more money into people's pay packets. That 2.5 per cent which has been legislated, that increase in superannuation, that could go to wages or it could go to super. The Liberals want it to go into the profit share of companies. That's what their real agenda is.

 

KELLY: Well hang on. Andrew Bragg's argument, much of his argument, for talking about voluntary super is largely focussing on people earning less than $50,000 a year, people who need - you'd have to concede - more money in their pockets now and would, if offered the chance to have more money in their pocket now than locked away for 30 or 40 years, might be a position to say yes please. 


CHALMERS: Fran, it's absolutely laughable that the Liberal Party of severe wage stagnation wants us to believe all of a sudden that they're worried about wages. They just cast around and look for the usual excuses to undermine super because they've never believed in it.

 

KELLY: Yeah but they're not the only ones. The Grattan Institute, plenty of others, do the sums and say listen people have been, this isn't working, it's taking money from the taxation pool for all Australians and also, it's putting too much money into the hands of the superannuation funds themselves. $30 billion of people's money in fees. I mean no wonder, with that kind of figure there's doubtless a good deal, is the answer to do more to slash those fees?

 

CHALMERS: Well obviously there are issues in other parts of the system but primarily what we're focussed on now is that we want to see workers get that 12 per cent super that they need and deserve and were promised. Now the Grattan Institute is a quality institution. I respect them. I have no beef with them. I don't agree with them. Their conclusions are actually hotly contested. There's no consensus amongst the people who look at superannuation that their conclusions are right. Michael Rice from Rice Warner - they're the sort of top shelf actuarial crowd in this country - Michael Rice has said that if you have a superannuation guarantee below 10 per cent it means most Australians would have the pension as their primary source of income. So there are other quality contributions to the debate which say that this idea that Andrew Bragg or Grattan or others have proposed is a bad idea. On the AM program just a few minutes ago the seniors groups and the retirement incomes groups were lining up to smash this idea so there's certainly no consensus around the Grattan approach.

 

KELLY: The Treasurer Josh Frydenberg is going to commission a review of retirement incomes. That follows a Productivity Commission calling for an independent assessment of whether the system is working, is achieving its stated objective. It wants the review before the next rising compulsory super in 2021. The Treasurer and the Finance Minister have ruled out any change to that Superannuation Guarantee increase to 12 per cent. It's been legislated. Are you satisfied with those assurances? And are you are happy with the idea of waiting to see what this review comes up with?

 

CHALMERS: Cormann and Frydenberg have guaranteed the 12 per cent the trajectory to 12 per cent and that's welcome. But I think that's a real test of their authority that since they locked into that 12 per cent, we've had I think more than a dozen Liberal backbenchers now in open revolt saying that they don't want to see superannuation go to 12 per cent and then some of the more drastic ideas like Andrew Bragg's idea. So this is a test of authority.  Of  Frydenberg's authority and Cormann's and also Scott Morrison's. Remember, he went to the party room on Tuesday and said to his colleagues, please stop talking publicly about super. And since then we've had multiple Liberals out there bagging Frydenberg and Cormann's position.

 

KELLY: Now of course here you are accusing these Liberals of wanting to attack the future savings of individuals. And is that a bit rich given you were the ones who went to the last election campaign with dividend imputation? What the Coalition badged successfully as it turned out against you a retiree tax.

 

CHALMERS: Yeah the point I'm making Fran, is that these guys wandered around the country crying crocodile tears for retirees at the same time as they had these plans in the Liberal backbench, substantial parts of the Liberal Party, to attack people's superannuation and we had Craig Kelly yesterday saying that the family home should be part of the pension assets test. So they shouldn't have wandered around the country pretending they care about retirees at the same time as they held these extreme views about cuts to pensions and super.

KELLY: You're listening to RN Breakfast. Our guest is the Shadow Treasurer Jim Chalmers. For a lot of older Australians right now, new studies of their retirement income because they're unemployed and on Newstart long before they hit retirement age and can access any super they have. Yesterday Labor backed a Senate motion calling for the allowance to be increased but you won't join those calling for a 75 per cent a week lift in Newstart. Why are you so reluctant to put a dollar figure on that? Do you think $75 is too much?

 

CHALMERS: We haven't been prepared to put a dollar figure on it, you're right. We think that there should be some rigour in coming up with that number.

 

KELLY: Well people haven't plucked it out of the air - just because it's been around for a long time doesn't mean ACOSS just imagined it. They've looked at what the current earnings are, and they've looked what you might need to - even then you're not going to be rich.

 

CHALMERS: Well as you know Fran, we took to the election a position to review Newstart with an eye to increasing it. Didn't win the election. Got to look for other ways to get a rise in Newstart because Newstart is inadequate - a point that John Howard, John Hewson, KPMG, the Reserve Bank and others have all made. So the ball's in the Government's court. We'll see what we can do in the Senate, perhaps with a Senate inquiry to try and progress this issue. We do think it's important that the Government act on this. We do think Newstart is inadequate, and if we do lift Newstart in this country we'll help to alleviate poverty, but we'll also help people back into work. They'll be able to support themselves back into work, and it will also be good for the economy which is floundering.

 

KELLY: Okay. Two quick issues. The outgoing Secretary of Prime Minister and Cabinet Martin Parkinson says that we will face a significant decline in our financial well-being - all of us, within a decade, a sharp decline - without improvements in productivity. In large part he's blaming the weak productivity on the policy paralysis and instability that's been going on over the last decade or more. Of course it started with the leadership turmoil of Kevin Rudd and Julia Gillard. Do you accept what he's saying, that that leadership instability from then until now has largely been responsible for lack of long-term policymaking, and good policymaking?

 

CHALMERS: I know Martin Parkinson really well and I wish him well. He's been one of the most distinguished public servants that we've had in this country. He's made an extraordinary contribution. I agree that we have a massive productivity problem in this economy and that has big consequences for our economy. Productivity growth has been weak for five years now. It's actually gone backwards every quarter for the last four. We've got a big problem. It's part of the reason why the economy is growing at its slowest rate since the Global Financial Crisis. I also agree with Martin when he says that there's an issue with policy paralysis, and the issue here is the Government has absolutely no idea and no plan to turn productivity around. They won't turn productivity around with union bashing or finger pointing or talking about the Labor Party. They have a political strategy but they don't have an economic policy and that's the problem.

 

KELLY: Well talking of unions, looks like Jacqui Lambie, who is likely to hold the key vote in the Senate, might pass ensuring Ensuring Integrity Bill in the Senate - that's the so-called union busting bill - her message to Labor is, you've got a problem with the IR Bill and it's called John Setka. If this legislation passes is it because of Labor's failure to deal with John Setka. 


CHALMERS: Labor's taking steps to deal with John Setka - 


KELLY: Well not very successfully. He's still there. 


CHALMERS: Well we suspended him from the Labor Party and we're looking - 

 

KELLY: Yeah he's appealing it. It's in the courts.

CHALMERS: Well we suspended him. He's not currently an active member of the Labor Party and we're looking to expel him. I think that's decisive action from Anthony Albanese. We are doing our bit to remove John Setka from the Labor Party. His views are not consistent with the Labor Party's views and so we are taking that decisive action. As for the Ensuring Integrity Bill, I mean we all know what's going on here Fran. They're attacking unions as a distraction from their failures on the economy. This whole week in the Parliament has been designed as part of a political strategy to hide the fact that they don't have an economic policy.

 

KELLY: Maybe so but has it come home to roost? Lack of action on unions and their behaviour? Jacqui Lambie says, well you know you might pay this price.


CHALMERS: At a time when we've got stagnant wages and rampant wage theft it makes no sense for the Government to be going after the unions as a distraction from their failures on the economy.

 

KELLY: Jim Chalmers thanks very much for joining us. 


CHALMERS: Thank you, Fran.

 

ENDS

 

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