Paul Keating says Liberal MPs trying to stop superannuation increase are 'super deniers' | 7.30

the man who gave us the compulsory superannuation system back in the 1980s was Paul Keating and he joins me in the studio tonight welcome back to 7:30 mr. Keating Thank You Laura lovely to be here data released today suggests we will soon see the first current account surplus since 1975 and the current account was one of the issues that you are grappling with as Treasurer in the late 1980s along with a terrible national savings and productivity record and an increasingly unaffordable aged pensions bill when you proposed a national compulsory superannuation system it was designed to deal with all of those problems at once wasn't it it was and it is dealing with them you can see it in today's current account the day's trade figures and the current account deficit and you're correct in saying when you and I used to go to press conferences in the Canberra calorie and the IDs the current account deficit was around 5% of GDP very big in other words we had a begging bowl out to the rest of the world playing please provide us the capital because we're a capital poor now the current account deficits under 1% of GDP gone from 5 to under 1 and the trade surplus is appearing for the first time in a long time and that's because the pool of Australian retirement savings in super at 3 trillion are now bigger than the free reserves of China 24 million of us of 25 million of us and 3 trillion so we've now got lots of investments abroad so the income from that those investments abroad that's the interest and and and the capital returns offsetting interest and and dividends out of Australia for foreign investment means the current account deficits improving structurally this could not happen without superannuation well why is it under such a salt on a regular basis we're always having reviews we're always having it attacks we've got these sort of it's like climate deniers we're going to bunch of people in the Liberal Party they've always hated superannuation and they're super denies their superannuation denies someone said yesterday Pizza Lee they're like anti-vaxxers there vaccine yeah this thing has virtually wiped out the current account deficit it's dropped the call on the AIDS save on the on the age pension the call on the budget from roughly four to five percent of GDP to currently two point four the European average is eight percent we're at two point four and the for each astray lien person at work the average accumulation is now two hundred and twenty five thousand dollars so in the recent American survey household survey only ten only 55 percent of Americans could lay their hands on only $10,000 fifty five percent of the American working community put their hands on ten thousand the average for us is to twenty five thousand and in eight years that will be five hundred thousand in eight years after that it will be 1 million in eight years after that'll be two million I mean how mean to try and this only comes because of the compulsion otherwise people don't save and wouldn't have the incentive to say it hasn't increased as much as you wanted it to until now so people are not self-reliant as you hope they would be so there is still a reliance on the pension which makes the system vulnerable and open to question though doesn't it ya know John had knocked off the last three percent I had in the 1996 budget right five-six budget so it was going to twelve and then and then when Kevin Rudd and Wayne Swan put the three percent back Joe Hockey with a vote of of Mr Palmer in this Palmer party in the Senate by one vote he jammed at nine and a half percent so if you work it out Laura for most people most people have nine percent super if you lose three you lose one third of it so if you have three hundred thousand you would have had four hundred thousand right if you've got two hundred and thirty thousand you would have now three hundred thousand I mean how did hockey cost the average worker one hundred thousand as of now as of now well the prime minister and the treasurer said that they will commit they're committed to the twelve percent that's good but some government back benches are clearly urging that it not go ahead along with the Treasury and others they're saying the high cost of superannuation would further reduce the prospect of wage increase yeah well this is the great law you see this is this is the the body analysis of the Grattan Institute along with the Financial Review there's a sort of you know this one guy's the fastest calling a conspiracy but it nearly touches that not they're saying this look if you don't have an increase in superannuation you or if you do you'll lose it in wages so if you take the superannuation the two and a half percent extra you'll lose the wage increase alternatively if you don't take the two and a half percent you pick up two and a half percent wages but it's demonstrably false because nobody since 2014 has had any increase in super there's been no to an opposite yet wages are not increased at all but can you understand the potency of the argument the political potency of the argument to voters who haven't seen a decent pay rising years if people are saying to them that superannuation poses an even bigger threat to them getting there but they're not in this in this low in this technology ribbon low inflation environment they're not going to get wage increases Laura so it's a two and a half percent super or nothing you see the Parliament isn't currently legislated 2.5 percent extra super from 2021 to 2025 that's 2.5 percent of income whether you take it as savings and super or you get it as cash it still two-and-a-half percent of income if this is refused essentially what the Liberal government would be doing would be would be would be pilfering stealing robbing the workforce of 2.5 percent of income sorry are you saying that there's no prospect in the future in the current environment of people getting pay rises and does that suggest that the push towards free markets which you began has actually gone too far no no that's because the enterprise bargaining system myself which had those massive wage increases just remember you know we've had a 60% increase in wages since 1992 you can't confuse rates and levels the level of wages are 60% higher that 1992 it's just that they're not increasing and they're not increasing because of the because the fact the simplicity of the system might reduce has been walked by Howard with these work choices and then the Gillard government with its remedies get back to my system and people start to get real wage increases again but but you know when they introduced the system 30 odd years ago people they retired about 65 and died roughly about 85 86 but in those thirty years people living six years now 60 lost my glasses six years longer so nine and a half is just not enough you can't stretch the pool to cover you till aged 91 or 92 from nine and a half percent it has to go to 12 these changes were staunchly resisted at the time along with some of the other policies like the fringe benefits tax and capital gains tax is there room for brave policy anymore well providing the straight lines of logical there and and and people in public life mean to do what is right what is good and what is true it wasn't one of the lessons of the election campaign that opposition's shouldn't be brave no I don't think one of the lessons at all I think that I think if you're talking about the Labour Party and why it lost the election it you'd fail to understand the middle-class economy that Bob Hawke and I created for Australia and so much the Labour Party's policies were devoted to the bottom end of the workforce and the community paid for by cuts in tax expenditures if the cuts in tax expenditures had have been employed in reducing tax rates then it would have been a big tax reform and I believe I success a much more successful outcome but instead of that the Labour Party was actually increasing the top rate of tax from 45 to 47 percent which of course you know in pub opposed so at the next election given the way the budgets going do you think there is room for another big change in the tax mix that we broaden the base essentially yes we used to say they do what I did in the eighties that is you broaden the base friends benefits capital gains the abolition of entertainment as a deduction and cut the rate so I cut the top marginal rate from sixty under jonhoward to forty seven percent it's still at 45 now thirty years later I mean how pathetic is that it should the top marginal rate in Australia shouldn't be a jot over 39 percent over the weekend we saw a step up in pressure on Australia from the United States to take sides in its strategic battle with China so if I could ask you what I asked you white last night defense secretary ESPA seems to have laid the ground for new arms race in the region should we be alarmed about that or put this way let the Americans do what they wish to do themselves but intermediate range of missiles have always been part and parcel of the American submarine fleet anyway when they removed in Europe the only reason they were ever land-based intermediate missiles were placed in Europe is because the Europeans were worried about the old Soviet Union and they had the Americans placed them there because Reagan and Gorbachev took them away China was never part of that treaty so it's called it's got hundreds of intermediate-range new cults so when the Americans want to have a capacity for intermediate-range and use on their submarines is one thing but putting them on land base land bases is entirely another you know and particularly land-based ones focused on China like we should have no bar no bar of having American intermediate-range missiles stationed in this country directed towards the Chinese how dangerous is it for Australia in terms of its relation with China for us to have been put on the spot like this well you know Pompeyo there look the Americans know we have difficulties currently with the Chinese brought about by the Turnbull government and more likely you know so a little bit of diplomacy and manners wouldn't have gone astray but Pompeo run rough roads into town rude doing the Rodney rude act you know saying you either have you know soybeans or you look after you saw where's that effect what do you say has somebody something yeah I mean the only could the only thing to know about American secretaries of state these days is under Trump they don't last long mr. Keating thanks for joining us tonight hi I'm Leigh sales thanks for watching this story if you'd like to watch more of 730 stories they are on the left of your screen and tap on the button below to subscribe and get the latest from ABC news

Channel: ABC News (Australia)

Views: 50,243

Keywords: Australia, paul keating, super, superannuation, liberal, labor, mike pompeo, wages, economy, missiles, us, china, politics, government, former prime minister, 7.30, abc, abc australia

Id: 98Ex1a8wtkU

Length: 12min 2sec (722 seconds)

Published: Wed Aug 07 2019