Former Prime Minister Paul Keating has criticised the ALP for not adopting his proposal for extending compulsory superannuation.
Keating described the ALP’s attitude as a “failure of imagination”.
In an interview on the ABC’s The World Today, Keating also commented on former Western Australian Premier Brian Burke.
The interview was conducted on the 24th anniversary of the election of the Hawke government in 1983. Following the interview, a ringtone was produced using the more memorable Keating quotes.
- Listen to Keating (11m)
- Listen to the ringtone (10s)
Transcript of Paul Keating’s interview with Eleanor Hall on The World Today.
ELEANOR HALL: As the Federal Labor leader continues to take political heat from the Government over the Brian Burke dinner, he’s also attracting criticism from closer to home, on another matter.
Former Labor Prime Minister Paul Keating has criticised the Labor Party for failing to take up his compulsory superannuation plan.
Mr Keating had proposed that contributions be raised by a further 6 per cent to 15 per cent, with half to be funded by the Government, and the rest by employees.
That would bring average earners up to about the same level of contribution enjoyed by most public servants and higher-income earners, and go some way to avoiding the shortfall most retirees face.
But in what the former prime minister describes as a “failure of imagination”, the Labor Party has announced that it will leave the system as it stands.
Paul Keating has agreed to talk to us about both the Brian Burke situation and the superannuation, and he joins us now in The World Today studio.
Paul Keating, welcome.
PAUL KEATING: Thank you, Eleanor.
HALL: So, Mr Keating, Kevin Rudd is already facing an attack from the Government, he hardly needs you in there criticising him as well, does he?
KEATING: Oh, well, I think this is a more technical issue than it is a political issue in that sense.
Just the simple fact that if you were born in the 1940s, and a great proportion of the Australian workforce was born in the 1940s, 9 per cent in the SGC is not enough to retire on. You know, the Government’s now introduced these if you’ve got, what I call the top end of town adjustment, if you want to put a million dollars into super by 30 June, if you’ve got a million, you can do it. But if you’re a wage and salary earner, one of the mums and dads out there looking after families and kids, and all you have is the SGC, the compulsory 9 per cent, if you join the workforce at 20, say, and retired at 60, you’ll have a reasonable retirement accumulation. But if you didn’t get the 9 per cent until the 1990s, or 2000, then 9 per cent’s not enough if you were born in the 1940s. You really need to go at least to 12, and that should really happen by tax being paid as savings, not as cash.
HALL: The Labor Party, though, says that it would be too costly to implement your proposal now. It says that you’d been locking up $6 billion worth of government funds, and you’d have to admit, in an election year, that’s a big call for an opposition.
KEATING: No it’s not. Look, the money, the surpluses are now going into the so-called Future Fund. The Future Fund’s one of these rinky-dink names like WorkChoices, you know, it’s a future fund when it’s not a future fund.
There’s only one future fund, that’s superannuation. It’s got a thousand billion in it. The Future Fund, the Government’s one, has 20 billion in it.
So obviously if a government’s running surpluses, where are the surpluses safest? Are they safest in Eleanor Hall’s private superannuation account, where you can’t touch it till 60, or is it safer on the Cabinet table so National Party ministers can spend it on dams, roads to nowhere, you now, tax cuts paid as cash, which the Reserve Bank then recovers in interest rates?
Obviously outlays to GDP are running at lower levels than revenue to GDP, therefore the government budget is going to be in surplus, and therefore that surplus is best left with ordinary men and women, preserved to age 60.
Now, if the Labor Party doesn’t stick up for ordinary working bods, who is?
HALL: Did it surprise you that the Labor Party supported the Government’s latest changes to super in the Senate last week?
KEATING: No, no, they’re fine. Look, Costello’s changes are fine as far as they go. But let me tell you why they did it.
I changed the whole system in 1984, ’83, so after ’83 there was a dramatic change to super, and we have a pre and post ’83. If you ever talk to an investment adviser, you’ll talk about pre and post ’83.
With the multiplicity of funds and movement under Choices, the Tax Office couldn’t track the pre and post ’83. So in the end they had to admit they couldn’t track it, so they’ve said let’s remove all the taxation. That’s where the initiative came from, it wasn’t some bright idea of Peter Costello’s.
Basically, the commissioner has said to him, look, Treasurer, we can no longer track the pre and post ’83 payment, why don’t you change, you’ve got all this surplus money, why don’t you remove the tax at the back, on the end result. And that’s what he’s done. And that’s fine as far as I’m concerned.
HALL: Does the Labor Party solve part of its problem, though, by looking at policies to help low and middle-income earners that are not the 15 per cent contribution, but something to counter that …
KEATING: Well, let’s, look, I was regarded … remember, when I started this nobody had, no working person had super much. If you were in the top end of industry or the public service you had it, but if you were an ordinary bod you had nothing. And I started this with Bill Kelty with 3 per cent of wages in 1985.
Now, if I was taking a cue from Nick Sherry and others, I just wouldn’t have done it, you know, much less then legislate the 9 per cent in 1992.
It requires some imagination, you know. There’s a trillion dollars now, there’s only a workforce of 10 million in Australia, and we have the fourth largest pool of savings in the world.
HALL: So why do we need more?
KEATING: Hmm? Because it’s not enough, it’s not enough to give you an income and retirement without the big step down from your wage.
So, you know, 64 years of age, you get a certain wage, and 65 you go down to a much lesser sum and you’re still relying on the pension.
HALL: Okay, you’re clearly unhappy with the Labor leader, Kevin Rudd, on this issue of policy. How do you think he’s handling the politics, with this attack that he’s facing from the Government over his contacts with Brian Burke?
KEATING: Oh, look, it’s just Howard being Howard, isn’t it, you know. The little desiccated coconut’s under pressure and he’s attacking anything he can get his hands on.
You know, I mean, look, Brian Burke and Julian Grill, they’re the Arthur Daley and Terry of the Western Australian Labor Party, you know. They’re like the wallpaper over there. You can’t visit Perth without running into them, you know.
It’s a bit like Kevin Rudd coming to Sydney, somewhere you’re going to meet Johno Johnson who runs the raffle tickets and things. I mean, it’s just part of life.
And the idea that … I mean, what are they? They’re are a couple of small-time lobbyists. So what, you know, so what?
HALL: Was Kevin Rudd, though, naive to meet Brian Burke at that dinner in 2005?
KEATING: Well, he was the shadow minister for foreign affairs talking about China and what have you. I think, you know, you can’t apply … I mean if, have a look at all the bagmen in the Liberal Party, for God’s sake. I mean, if you applied a sanitary test to those guys, I mean, no minister would do any business in this country.
HALL: He’s said, though, that he didn’t know that Brian Burke was off-limits for state ministers.
KEATING: Well, look, the real problem about Western Australia is this – look, I haven’t seen, myself, seen Burke for 20 years, but the fact is Burke is smarter than two thirds of the Western Australian Labor Party rolled together. That’s why he keeps bobbing up. And instead of leaving him out in the cold, what Gallop and Carpenter should’ve done was bring him in simply as a lobbyist and legitimise him like all of the other lobbyists over there, so all this nonsense goes away, you know. Instead of that they leave him out there so he turns up at these various things or tries to, you know, get himself a quid doing one thing or another.
Now, you know, I mean, Burke was Richardson’s candidate against me for the prime ministership, so I’m not a Burke barracker, you understand, but the idea that someone as clever as that is going to be sat on forever by a Carpenter or a Gallop is of course nonsense. And that’s why he’s been friendly with Beazley for years, you know.
HALL: But you say you’ve not had contact with Brian Burke for 20 years. I mean, shouldn’t Kevin Rudd have been clever enough to try and avoid contact with Brian Burke, knowing his reputation?
KEATING: Look, look, Kevin has done something, he’s met Brian Burke. But I’ll tell you what he hasn’t done – he hasn’t lied to his nation about reasons for committing Australia to a non-UN sponsored invasion and war. He hasn’t turned his head from the plight of a boat full of wretched individuals looking for shelter, and then adding insult to injury by saying they threw their kids overboard first, you know. And he hasn’t prostituted the UN Oil-for-Food program by falsely declaring that Australia’s wheat shipments were not ultra vires of the UN guidelines.
Now, this is what this prime minister has presided over, you know …
I mean, look, you know, Howard has, you know, lied to the country about the reasons for going to war, going to war for God’s sake, and now he wants us to believe it’s a major problem if Kevin Rudd meets Brian Burke, you know, Brian who?
HALL: What did you think of Peter Costello’s performance in the parliament, though, when he raised this?
KEATING: Well, the thing about poor old Costello, he’s all tip and no iceberg, you know. He (laughs), you know, he can throw a punch across the parliament, but the bloke he should be throwing the punch to his Howard. Of course, he doesn’t have the ticker for it.
Now, he’s now been treasurer for 11 years, the old coconut’s still sitting there, araldited to the seat, and, you know, the Treasurer works on the smart quips, but when it comes to staring down the Prime Minister in his office, he always leaves disappointed, you know, he never gets the sword out. You know, you know the thing ‘I’ll huff and puff and blow your house in’, that’s Costello (laughs).
HALL: Has the Government, though, now taken the high moral ground with this by removing Minister Campbell?
KEATING: Look, for John Howard to get to any high moral ground he would have to first climb out of the volcanic hole he’s dug for himself over the last decade. You know, it’s like one of those deep diamond mined holes in South Africa, you know, they’re about a mile underground. He’d have to come a mile up to get to even equilibrium, let alone have any contest in morality with Kevin Rudd.
HALL: You’d have to admit, though, that this has done some damage to Kevin Rudd. I mean, the attack looks like it’s going to continue. Is it likely to permanently damage him?
KEATING: Look, you know, the old thing, it’s a great saying in politics and law, ‘the dogs may bark, but the caravan moves on’.
Now, my advice to Kevin is to move on, let Mr Howard, you know, he’d be … at the moment, you can always tell when he’s twitchy, the old shoulder starts going, and I notice on the TV lately the shoulder’s going. He’s in trouble. He could’ve given the job to Costello and got out at the right moment, but he’s hanging on, you know, like grim death to the job, and now all of a sudden he’s up against it.
HALL: Isn’t there a danger, though, that Kevin Rudd’s not up there on the front foot fighting this charge against him clearly enough?
KEATING: Oh, Kevin’s said all the right things – if you want an election about morality, bring it on. I mean, when you talk about John Howard and the moral high ground, you know, I mean it’s a bit, he reminds me of that cartoon character who’s always trying to, you know the Roadrunner, and he’d always fall down these great chasms. I mean, Howard is down one of those chasms, in terms of morality.
HALL: Paul Keating, thanks very much for joining us.
KEATING: Thank you indeed.
HALL: That’s Paul Keating, the former Labor Prime Minister.
