The Labor Party is calling on Prime Minister Scott Morrison to finally put an end to the war on superannuation waged by government backbenchers, in an effort to ensure Australia rebounds from COVID-19 "faster and better".
Financial Standard has obtained a copy of an address to be made to the Chifley Research Centre today, in which Labor's superannuation spokesperson Stephen Jones says the Prime Minister should see to it that members of his own government put down their weapons and cease attacking the super system, as Morrison urges unions and business to work together for the benefit of the nation.
Jones' speech comes as Liberal Senator and former Financial Services Council policy director Andrew Bragg releases his book on how to fix the superannuation system, which includes suggestions on opening the system for Australians to use as a means to buying their first home, among others.
Bragg's tome drew the ire of Industry Super Australia chief executive Bernie Dean, who said the book pedaled "some of the most radical and baseless super theories going round", in comments provided to Financial Standard by ISA, and also published in the Sydney Morning Herald.
|Sponsored by Franklin Templeton|
Market Volatility Centre - Tools to Help Stay the Course
"His ideas, which he has been spruiking for many years, would turn super into just another retail financial product," Dean said.
"At his most radical Bragg has argued that low income earners would be better off opting out of super and taking a little extra cash to spend now. His fallback option is to allow everyone to access their super at any time they're feeling the pinch - like a bank ATM.
"What this would mean is that super funds would have to hold more cash to pay out like a big bank ATM, rather than getting better returns by investing in assets for the long term."
In his speech, the shadow assistant treasurer and shadow minister for financial services says Morrison's request is something he agrees with, but adds that for the Prime Minister's words to be anything more than an empty slogan, his government "has a few swords of its own to sheath".
Jones says there is a "real" war against universal superannuation being waged by "wreakers" in the government's ranks.
"By storm or by stealth the objective is to destroy that part of our economy which has done so much to see us through the worst of the crisis and is critical to building our future," Jones says.
"Make no mistake, if the opponents of universal super win, the consequence will be the destruction of jobs, the crippling of economic growth, an increase in taxes and a less secure future."
Jones says the system - which has seen Australia amass the fourth largest pool of pension savings in the world - has been opposed by the Coalition "from the get-go", and that if there was ever an opportunity to get in the system's way, the Coalition has done so. This, despite universal superannuation being an amalgamation of both Liberal and Labor values, Jones says.
"Self-reliance, which the Liberals often claim as their animating force, means providing for yourself and not being a burden on others. Having a universal system upholds the egalitarian value of Labor. The principle that every citizen deserves to retire with dignity and some independence," Jones points out.
Jones says the system's ability to help Australians weather the storm through early access to their retirement funds is a result of its design shining through.
"For the last 30 years it [universal superannuation] has been quietly building a stronger economy owned by Australians," he says.
"During this crisis, super has provided emergency relief to individuals and stability in capital markets that can only be assured by large, long term investors with a key stake in the national interest."
Jones says the National Party should pay particular attention to the actions of industry fund Rest, whose $500 million commitment to new agricultural investments in New South Wales and Queensland address the party's long-held concerns about the foreign ownership of Australia's farms.
"Here we have the opposite - Australian businesses owned by the savings of Australian workers through their superannuation," he says.
Jones claims the government is "paving the way" for the introduction of a plan formulated within the Liberal Party to dismantle super by scything the superannuation guarantee, ending the preferential tax treatment of super for low and middle income earners while safeguarding it for the wealthy few, and removing union representation from the system while separating it from the workplace.
"Let us be very clear about what this means," Jones says.
"Higher taxes, lower productivity, fewer jobs and a bleak future for retirees. Foreign debt will increase as once again we are dependant on the savings of other countries.
"Productivity will stagnate as the industry's ability to invest for the long term is crippled. All fund members will suffer as they see their retirement savings deteriorate. Inequality will grow with a monstrous distortion of existing tax concessions."
Jones finished by saying that if the Prime Minister is "genuine" about putting down the weapons, he should start by ending the war on super.
"If he does this we can rebound faster and better because a stronger superannuation sector means more jobs and a stronger economic future for all Australians," he says.