Summary

The ACTU and its affiliated unions played a foundational role in winning superannuation as an industrial right for all working people, and with employers established and continue to be custodians of workers’ retirement savings through industry superannuation funds. Living well after work is fundamental to the wellbeing of working people and attaining dignity and independence in retirement for all working people is a core goal of the union movement.

Superannuation is an essential vehicle for ensuring that working people maintain their standard of living during their working life into retirement. Superannuation should supplement the Age Pension in retirement to ensure working people have a high quality of life. The principal objective of Australia’s retirement income system is that no one should retire into poverty. In order to achieve this, working people need a higher Age Pension, adequate superannuation savings, and their own home or affordable rents if they do not own a home. While consideration of the delivery of retirement incomes is sound, it should be recognised that many workers are still retiring into poverty due to inadequate retirement savings as a result of the Superannuation Guarantee (SG) being too low to ensure a dignified retirement, gaps in the system, or unfair exclusion from the right to earn superannuation on top of their wage. The superannuation system is still maturing. Most workers retiring now accumulated superannuation at a far lower rate than the 10 per cent prescribed today, and many won’t reach the 15 per cent essential for an adequate retirement.

The central objective of the Government should be to take every step to improve the adequacy of retirement incomes. Women and Aboriginal and Torres Strait Islander workers retire with less than half of the superannuation, on average, of men. Government should be taking urgent action to rectify this including confirming the legislated increase of the SG to 12 per cent and establishing a pathway to 15 per cent immediately abolishing the $450 per month minimum threshold for SG, paying superannuation on parental leave, taking real action on superannuation theft by ensuring 1 it is every worker’s right to recover unpaid superannuation, and ensuring that every worker, no matter how they’re engaged, earn superannuation on every dollar.

The position taken by the Government is that far too many workers do not efficiently use their superannuation and that this is borne out by too many retirees not using all their superannuation by the time they pass. This, however, is a luxury many workers do not have. The vast majority of workers deplete the entirety of their superannuation before they die and are forced to rely on the inadequate Age Pension for the remainder of their lives. The Retirement Income Review’s assumption that superannuation savings is more than adequate for retirees comes from their view that retirees should take out reverse mortgages should they be lucky enough to own a home. The Retirement Income Review found that one third of the value of superannuation will be passed on as inheritance, however this overstates the problem facing retirees. Much of the value of superannuation passed on as bequests are part of estates with multi-million-dollar superannuation balances, used to avoid tax rather than meaningfully save for retirement. The Retirement Income Covenant will not reduce the number of bequests made by families with tens or even hundreds of millions of dollars in superannuation. Those families have made plans and are executing them. There must be action to reduce the tax concessions enjoyed by the very richest Australians within superannuation. No person needs half a billion dollars in their self-managed super fund and rorts like these must be stopped.

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