Labor's mining tax attack

The government taunts Labor in
question time on Tuesday as the opposition attacks the mining tax repeal
and associated cuts in spending
Former Prime Minister Paul Keating has launched a blistering
attack on the Abbott government, labelling the federal government's deal
with the Palmer United Party to pause the rise in superannuation
contributions at 9.5 per cent until 2021 "wilful sabotage of the
nation's universal savings scheme".

The intervention came as Prime Minister Tony Abbott said the
deal meant workers would have more money in their pockets that would
otherwise have been squirrelled away in superannuation funds, and as
Labor attacked the government for effectively reducing Australians'
retirement savings.

The pause in superannuation was agreed by the Coalition and
the PUP on Tuesday as part of a deal to repeal the mining tax but keep
three spending measures associated with the tax - the Schoolkids Bonus, the low-income superannuation contribution and the income support bonus - at cost of $6.5 billion to the budget bottom line.

Prime Minister Tony Abbott and Treasurer Joe Hockey during question time.
Prime Minister Tony Abbott and Treasurer Joe Hockey during question time. Photo: Alex Ellinghausen

In his letter Mr Keating - the father of Australia's
compulsory super system - said the deal would adversely cost baby
boomers as well as their children.

A super contribution of 9.5 per cent over a 35 year working
life for someone earning $100,000 would provide a retirement income of
just 50 per cent of their pre-retirement income, he said, "way below the
the 70 per cent a of pre-retirement income replacement a superannuation
guarantee at 12 per cent would provide".

"The government's connivance with PUP to spike superannuation
at 9.5 per cent has little to do with the budget balance this year, or
in the early out years, and everything to do with cheap ideology," he

Former Prime Minister Paul Keating with shadow treasurer Chris Bowen.
Former Prime Minister Paul Keating with shadow treasurer Chris Bowen. Photo: Alex Ellinghausen

"The Prime Minister and Mr Palmer trotted out the tawdry
argument that working people are better off with more cash in their hand
today than savings for tomorrow ... yesterday's decision is an
appalling one by a government lacking any genuine or conscientious
concern for the nation's workforce."

In question time, Mr Abbott said the decision ensured that
for the next 10 years money would "stay in the pockets of the workers of

"If the workers of Australia wish to invest that money in
superannuation they are perfectly free to do so but, as far as I am
concerned, for the next 10 years that money should stay in the pockets
of the workers of Australia," he said.

Opposition Leader Bill Shorten.
Opposition Leader Bill Shorten. Photo: Alex Ellinghausen

"We support a decent retirement policy. We support security
for older Australians. We do support moving the superannuation
contribution to 12 per cent, but in the right time, consistent with
returning this budget to long-term sustainability."

Treasurer Joe Hockey dismissed out of hand a warning from the
Financial Services Council - the super industry's biggest lobby group -
that workers would miss out on $128 billion in savings over a decade
from the pause.

"The suggestion that people are losing ... $128 billion, I
completely reject, because they're getting it in their pockets," he

Labor focused its political attack on the case studies to
illustrate the impact the pause in contributions would have on
Australians, with Opposition Leader Bill Shorten arguing a 25-year-old
on an average income would miss out on $100,000 in savings by the time
they retired. 

Mr Shorten labelled the extended pause to super a political
broken promise that would have "catastrophic consequences" for
Australians' retirement savings and that he didn't "trust this
government to support increase in workers' wages".

Deputy Opposition Leader Tanya Plibersek pressed the Prime
Minister on the fact that a woman earning $37,000 a year, who would miss
out on the low-income superannuation contribution when it was scrapped,
would lose $500 each year from 2017.

Follow us on Twitter