Speaking at an event in Sydney on Thursday (24 October), hosted by Crescent Think Tank (pictured), Mr Hewson — who famously missed out on becoming Australian prime minister — and Mr Kelty, the former head of the Australian Council of Trade Unions (ACTU), surmised that a higher rate of contributions to superannuation is needed if workers are to be able to self-fund their retirements.
Mr Kelty said that the current 9.5 per cent rate of employer contributions hasn’t gone as far as what was originally planned when the superannuation scheme was first developed, noting the figure of 15 per cent.
When asked whether, at a time of historically low wages growth, it was more prudent to give employees a wage rise than more in super, Mr Kelty retorted that such an idea is “total nonsense”.
He said that to his knowledge, no employer in the country had offered their workers a pay rise because the proposed increase to superannuation guarantee (SG) contributions was deferred, meaning that workers missed out on both.
Perhaps more surprising, though, was that former Liberal leader Mr Hewson also conceded that a higher rate is needed to provide enough savings to cover the rising cost of living combined with longer life expectancies.
“It’s never a good time, an employer will tell you, to increase super,” he said.
“But the worker is not convinced by it.”
He said that workers are seeing their wages barely grow despite ballooning living costs, as well as job security fears due to the increasing casualisation of the workforce, as the reason why many workers wanting to see more funds going into their super accounts, and that at least 12 per cent is needed to adequately cater for retirement costs.
Mr Hewson also took a swipe at the federal government over the issue, which he accused of trivialising the issue by relying on “slogans” instead of policy substance.
Yet he admitted that both sides of politics have created problems with the current system.
“Governments have played politics with super over time and it’s become very complicated,” he said.
It comes despite a My Business poll conducted between August and September this year finding that many business owners would resort to drastic actions if the rate of SG contributions did reach the proposed 12 per cent, including employee layoffs and even exiting the business altogether.