Paul Keating says the 12% rate of compulsory super contributions from 1 July will \u201cguarantee\u201d a young Australian joining the workforce today will have more than $3m in savings by the time they retire.<\/p>\n
A statement from the former prime minister celebrating the day \u201cthe system finally matures\u201d came with an implicit criticism of Labor\u2019s proposal<\/a> to put an extra 15% tax on earnings from super balances over $3m.<\/p>\n The Australian Financial Review has reported<\/a> that the former prime minister has privately blasted as \u201cunconscionable\u201d the Albanese government\u2019s decision to not adjust the threshold each year in line with inflation or wages growth.<\/p>\n Keating on Monday wrote that the 12% rate would \u201cguarantee personal super accumulations in excess of $3m at retirement, reducing the call by the age pension on the Australian budget to 2% of GDP in the 2050s\u201d.<\/p>\n The former PM\u2019s claim goes further than other critics of the policy, which Treasury estimates will affect 80,000 individuals when it comes into effect.<\/p>\n AMP\u2019s deputy chief economist, Diana Mousina, said an \u201caverage\u201d 22-year-old earning $98,000 today would breach the $3m limit by the time they retire at age 67.<\/p>\n The Financial Services Council has estimated that 204,000 workers under the age of 30 will have super balances of more than $3m by the time they retire \u2013 still less than 5% of that group.<\/p>\n None have said workers were \u201cguaranteed\u201d to crack $3m in super savings.<\/p>\n And while other tax policy experts<\/a> have said while indexation is common, they believe it is virtually impossible that the threshold will not be adjusted over the coming years and decades.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n Privacy Notice: <\/strong>Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n Guardian Australia sought clarification on the $3m claim, but Keating was unavailable before deadline for publication.<\/p>\n Despite Keating\u2019s concerns, the policy is expected to pass parliament with the support of the Greens in the senate.<\/p>\n The final scheduled 0.5 percentage-point lift in SG comes 25 years later than Keating hoped when he laid out his vision in a 1991 speech.<\/p>\n \u201cTomorrow, 34 years after I nominated a 12% wage equivalent as the appropriate level of compulsory contribution into superannuation, the system finally matures,\u201d Monday\u2019s statement said.<\/p>\n Keating said the advent of compulsory super had slashed the country\u2019s reliance on taxpayer-funded pensions, pointing out that France spends 14% of its GDP on public pensions, Germany 10%, and the United States 7%.<\/p>\n \u201cAustralia\u2019s pension call on the budget is currently just 2.3% of GDP \u2013 a sunken level thanks entirely to universal superannuation.<\/p>\n \u201cSuperannuation, like Medicare, is now an Australian community standard, binding the whole population as a national economic family, with each person having a place.\u201d<\/p>\n He told the AFR that savers would have been between $250,000 and $300,000 better off were it not for John Howard\u2019s decision in 1996 to freeze the rate at 9% until 2013.<\/p>\n","protected":false},"excerpt":{"rendered":"Paul Keating says the 12% rate of compulsory super contributions from 1 July will \u201cguarantee\u201d a young Australian…\n","protected":false},"author":2,"featured_media":226385,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,2499,16,15],"class_list":{"0":"post-226384","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-personal-finance","11":"tag-uk","12":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114771851018320777","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/226384","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=226384"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/226384\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/226385"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=226384"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=226384"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=226384"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}