MIKE CARLTON:
Well, I hope you heard Paul Keating, the long chat we had to him after eight o'clock this morning, and the big bee in his bonnet at the moment, well, it has been for a long time, is superannuation.
Now he introduced the nine per cent contributions, so that all working Australians would have a nest egg put aside when they retired. But he wants that increased, and has for a while, wanted that to go up to 15 per cent. He says that the superannuation contribution from the employer should now be 15 per cent, to make that nest egg really worthwhile, otherwise, the coming generation over the next 10 or so years, are simply not going to have the money to live on in their retirement.
And Paul Keating said Howard and Costello should have done it, but he also makes the point that this present, this current Labor Government, should do it as well.
And a couple of times he's had a shot at the Minister for Superannuation, the Tasmanian Senator, Nick Sherry, and fair enough too, he's a former Prime Minister, he's entitled to do what he likes.
Senator Sherry has rung back to have a - I presume, a shot back. Good morning.
SENATOR NICK SHERRY:
Good morning, Mike, good morning to your listeners.
MIKE CARLTON:
Are you going to introduce a 15 per cent superannuation contribution?
SENATOR NICK SHERRY:
Well, the original Keating model, the model that Paul talks about, was nine per cent from the employers, which he introduced, starting back in 1987, and then on top of that, a universal co-contribution, three per cent from the employee, three per cent from the government, and that was scheduled to start back in 1997.
Now unfortunately the previous Howard/Costello Government abandoned that, and I think that was a big mistake, because it would have lifted the retirement savings. Now what we've established is the Henry tax process, and that will consider ways...
MIKE CARLTON:
Now this is a review of the taxation system?
SENATOR NICK SHERRY:
Correct, and that includes retirement incomes, it includes superannuation and the age pension, and that will consider the ways in which retirement incomes can be improved in Australia. So we've got a process, there are a number of ways to do it, superannuation is one way, but there's also the issue of the age pension, it's a battle for people living on a full age pension, they have very little super...
MIKE CARLTON:
Absolutely.
SENATOR NICK SHERRY:
And even with 15 per cent contributions which Paul Keating advocates, the majority of Australians who are currently retired, have very little, or no superannuation, which is why it's important in the retirement incomes equation...
MIKE CARLTON:
Well what he's saying, he's saying that the current lot of baby boomers about to go - are largely beyond help, you know, we've made that particular bed, and we've got to lie in it, he's talking about generations to come.
SENATOR NICK SHERRY:
Well, he's right on both scores, I mean it is difficult for current people who are retired, because they have very little super, they weren't in the system long enough, they didn't accrue enough, and that's why it was such a bad mistake not to have had that universal co-contribution all those years ago.
But the issue - that's why the issue of the age pension is just as important as superannuation contributions, because even if you have higher superannuation contributions, and you started that in the next couple of years, you've still got the majority of people currently retired, or those about to retire, who will have very little super, for whom the age pension becomes their sole source of...
SANDY ALOISI:
But we're talking about, I suppose kids my age, [sic] Senator, if you like, in their early 20s, isn't it something that your government can look to to the future, that they won't be in the same position as baby boomers like me?
SENATOR NICK SHERRY:
Well we certainly can, and I've got a list a mile long of ways in which we can improve superannuation contribution levels in Australia, and I'm putting them into the Henry Review.
MIKE CARLTON:
So that is part of this whole review of the taxation system being done by the Treasury Secretary, Ken Henry?
SENATOR NICK SHERRY:
Correct, it's to look at the two fundamental parts of retirement income. One is the age pension, because as I say, it's a real battle to live on the basic age pension if you don't have any superannuation, and secondly the long term view is how we can add to retirement income specifically...
SANDY ALOISI:
But when will that review be complete?
SENATOR NICK SHERRY:
Well, the Henry Tax Review will be complete by the end of next calendar year, and that will set out some options for the government...
SANDY ALOISI:
So there's no way that super would increase before then?
SENATOR NICK SHERRY:
Well no, I don't believe that there's any way in which we will be adding to superannuation contributions adequacy beyond what we've got, until the Henry Review has completed its report.
MIKE CARLTON:
All right, but do you accept Keating's basic idea, that if we don't do something, there are going to be an awful lot of people, retired out there, battling on very little money, and that pool of retired people will just get bigger and bigger and bigger, and their kids and grandchildren will just have to support them?
SENATOR NICK SHERRY:
Well, I support the view that we should lift retirement savings, and there are two basic ways to do that, or a combination. One is superannuation, and the other is the age pension, and I think both require some attention, and we'll set out the options for improving retirement incomes over the next year.
MIKE CARLTON:
It's going to be one of the big challenges your government faces, isn't it, absolutely?
SENATOR NICK SHERRY:
Well it is, I mean there's no doubt that there are a significant group in the community, I'd have to say mainly low, low middle income earners, who will face a real battle in retirement...
MIKE CARLTON:
Absolutely.
SENATOR NICK SHERRY:
even with their current nine per cent superannuation, it's only been nine per cent since 1 July, 2002, it phased in over about 15 years. Even for people who've been in the workforce over the last 20 years, we're looking at very modest levels of superannuation saving on top of their age pension, so for low, middle income earners, I do accept, and I think the government accepts, there are some great difficulties there, and that's why we've established a process to do it, but there are some very complex issues, and they both revolve around superannuation and the age pension.
MIKE CARLTON:
All right, we'll see how it comes out in the wash. Thanks for calling us, appreciate that.
SENATOR NICK SHERRY:
Thanks to you, good morning.