29 August 2020
Dennis Shanahan – Political Editor
Scott Morrison and Anthony Albanese have identified two policy and political issues — superannuation and aged care — that have fresh currency and urgency as a result of COVID-19. They could have as much impact electorally as the handling the coronavirus virus itself.
The competence demonstrated in dealing with the health threat and, perhaps more important, the economic recovery is dominating the national agenda and will do so during the federal election, which could be held late next year.
But the confronting and transformative impact of the coronavirus on administration and public attitudes has changed the nature of fundamental issues that existed before the pandemic.
The Prime Minister can see the potential damage to his standing and the credibility of the Coalition created by the disastrous death rate in aged-care homes as a result of Victoria’s wave of new cases. There have been more than 340 deaths in care.
The Opposition Leader sees aged care as a pivotal point politically. He is single-mindedly pursuing Morrison for being responsible as the commonwealth leader, arguing the Prime Minister has been too slow to respond to earlier warnings and even has been heartless by pointing to 97 per cent of aged-care homes in Australia (more than 90 per cent in Victoria) being COVID-free.
But even Albanese sees the importance of changes to superannuation rules and regulations beyond the pandemic. In a national speech on Thursday about aged care that prosecuted a case of “neglect”against Morrison before, during and after the coronavirus outbreak, the only other issue Albanese raised was superannuation.
The Opposition Leader said it was “sneaky and wicked” of Morrison to allow early access to superannuation funds for workers affected by coronavirus because those with the lowest funds — women and young people — were taking out the most. He said 600,000 accounts had been reduced to zero.
“What’s happening right now is casting a shadow so long it will darken future generations,” Albanese said.
“It will increasingly fall to them to prop up budget spending ever more on aged care and pensions. This means either that future workers will face higher taxation or that future government services — including the Age Pension — will come under pressure.”
He defended Labor’s legacy of compulsory superannuation payments, saying: “Universal superannuation was built to avoid this problem. It was never designed to be a mere safety net.”
Yet Morrison detects a public attitudinal change towards compulsory superannuation payments and preserving super savings, where there was once an almost monolithic acceptance of untouchable superannuation and the aim of self-reliance for retirees through compulsory super.
Like the brutal reality of deaths in aged-care homes, the surprise emergency access to superannuation funds to help those who have lost jobs has struck a deep chord in the public that will colour future political decisions.
Almost by accident Morrison discovered a deep change in attitude when speaking on radio about the early access to superannuation and used the line that “it’s the people’s money, not the fund managers”.
The prime ministerial switchboard lit up strongly enough to supplant the prime ministerial Christmas tree, and a visceral reaction confirmed what the figures were telling the Coalition.
As of this week more than 2.8 million Australians had withdrawn superannuation savings of $34bn early, and the bulk of applicants were low-income earners, essentially women and young people, who preferred to take what they had on hand rather than wait for decades and face the loss of funds through fees.
The reaction, double the Treasury estimate, was testament to a pent-up demand from the public to access their superannuation. It was a signal to Morrison and Albanese that a previously almost unassailable Labor stranglehold on superannuation policy and co-operation with industry super funds within the public and the Senate had been weakened.
The emergency superannuation access powers have broken the banks’ super debate, and a politically and ideologically frustrated Coalition is moving to take advantage.
Apart from a number of legislative victories in the Senate on superannuation and plans for more changes to come there is also the broad question of whether the 0.5 per cent increase in the superannuation guarantee contribution legislated to take effect from July 1 next year will go ahead as promised.
There is enormous pressure from within the Coalition, employers and business to freeze the contribution at the current 9.5 per cent in the name of helping economic recovery and putting money in workers’ pockets.
Using the early access issue, Morrison is building a campaign that it’s better for workers to control their money and that industry superannuation funds aligned with unions and Labor are “misusing” fund members’ money for ends outside their responsibility to provide returns to workers.
After the passage of legislation in the Senate to allow more choice for workers on which fund they use, Morrison told parliament: “It’s important legislation which understands that people’s superannuation money is their money — not the Labor Party’s, not the industry fund manager’s, not any fund manager’s.
“We believe it belongs to them because they worked for it, they earned it, they saved it. And when they need it in a time of pandemic we’re going to make sure they can get access to it.”
Morrison claimed Labor MPs were “like puppets on a string on behalf of the union fund managers and they trot out the lines on their behalf. But we have a message for them: it’s not your money. We won’t let you take it from those who’ve earned it when they need it.”
Greg Combet, chairman of Industry Super Australia and a former minister in the Rudd and Gillard Labor governments, told Inquirer that early access for everyone to their superannuation savings for any purpose before their retirement “would be a disaster”.
He also said any backtracking from the legislated rise in the super guarantee would be a “breach of faith”.
“The rise in the superannuation guarantee was an election promise which has been reconfirmed multiple times by the Prime Minister, and it has been legislated by the parliament,” he said. “It would be against the interest of superannuation fund members and as a consequence the industry super funds would oppose such a move by the government.”
He also agreed with Albanese and prepared for a real battle ahead by declaring “ordinary Australians … will have to work years longer to achieve the same level of superannuation savings. Taxes would also need to be higher in order to meet increased demands on the pension.
“The 0.5 per cent increase in the superannuation guarantee due in July next year would only equate to about a $5 per week increase in contributions for a person on $50,000 per year. This is affordable.
“Anyone with any knowledge of the real world knows that if the super guarantee rise does not go ahead, there will be no compensating wage increase. All that will happen is that people get no wage increase and no super.”
Albanese accused the Coalition of “setting us up for a future where millions of Australians are condemned to a very lean retirement”.
“The Liberal Party’s ideological prejudice means they certainly don’t want workers to have self-sufficiency in capital and have undermined superannuation at every opportunity,” he said.
But Morrison and Josh Frydenberg sense a change in the public attitude and can point to seven separate pieces of superannuation legislation passed recently directed at loosening the union and Labor grip on the resources and influence of the industry super funds.
In the lead-up to the seminal debate next year on the rise in the compulsory super contribution there will be more superannuation debates, including the Coalition’s claim that millions of dollars of members’ funds are being “misused” in payments to unions as “sponsored organisations” and marketing and entertainment.
It’s all part of long debate in a changed atmosphere that will be as important as aged care and the pandemic recovery.