As the global financial institutions and corporate monopolies wield their ‘market forces’, Australian workers face increasing job insecurity during their working lives and fading dreams of a ‘comfortable retirement’.
Courtesy of the austerity budget, the age pension, already miserable, will be indexed to the consumer price index rather than average male weekly earnings, from September 2017. Other benefits such as disability support, carers’ payments and veterans’ pensions will also take a hit.
Assault on workers’ superannuation
Compulsory superannuation, paid for by employer contributions, is sometimes supplemented by a means-tested part pension, which together is supposed to provide workers with a reasonable standard of living in their retirement years. In addition, better paid workers can make voluntary contributions to add to the employers contributions.
The current employers’ contribution is set at 9.5% of wages, and was due to increase to 10% next year, rising to 12% by 2019.
Now, as a result of the Abbott government deal with Clive Palmer to repeal the Mining Tax, workers’ superannuation earnings will be slashed. The 9.5% employers’ contribution will be frozen until 2021, when it moves to 10% and will not reach 12% until 2025.
This means that younger workers especially, will lose many thousands of dollars from their retirement ‘nest egg’ by the time they reach an age when they can access their superannuation.
Analysis carried out by Industry Super Australia for The Australian shows the massive impact this will have on retirement income. At retirement age, for example…
- 30 year old worker on $50,000 p.a. will lose $19,632
- 30 year old worker on $80,000 p.a. will lose $31,411
- 40 year old worker on $50,000 p.a. will lose $13,706
- 40 year old worker on $80,000 p.a. will lose $21,930
But that’s not all.
Another part of the austerity budget sought to scrap the $500 low income superannuation tax rebate for workers earning less than $37,000 in a tax year. With many workers in part-time and casual work or low-paying jobs, from 2017 when it commences, this measure will take a large chunk out of their expected retirement savings.
For a worker earning $35,000 p.a. from 22 years old until retirement at 69 years, it will amount to a loss of 16.7% of their final lump sum.
Where does the money go?
In the case of the increase in employers’ contributions being frozen and delayed, the money stays in the bosses’ pockets!
The bosses and the bourgeois economists say that this will allow them to hire more workers and pay for future wage increases. Yeah, and pigs can fly?!
As for the low income superannuation tax rebate, that stays in the government coffers to shell out among favoured big business mates and expensive consultants and military adventures.
Socialism – secure work, secure retirement
In contrast to the system of class rule by a small core of exploiters and profiteers, socialism uses the wealth and energy of the nation to build a society that meets the needs and interests of the people, especially the working class.
In contrast to capitalism, socialism guarantees secure and meaningful work, it guarantees decent healthcare and education, decent housing, efficient public transport and a good standard of living in retirement.
It guarantees participatory democracy in the decisions affecting people at work and in the community, in the formulation of public policies and in their implementation, and not just the election of (dud) representatives every so often.
It guarantees respect for the environment and promotes clean and sustainable energy in place of the old polluting industries and profit-driven exploitation of the land, rivers, sea and air.
As the superannuation rip-off shows, whatever small gains workers can achieve in this system are soon taken back, the goal-posts keep moving and insecurity returns. Capitalism cannot be reformed, regulated or resurrected, it must be abolished.