Privatising the pension


Privatising the pension

As wage rises have proven very difficult to get under the Accord, the union movement has been offered something of an alternative in superannuation. The proportion of the workforce covered by super has probably doubled since the mid-'80s. It's worth asking why the wages system has been relatively generous with super while it has only grudgingly conceded small rises to keep wages from getting completely left behind by inflation. Several times, super has been part of national wage packages.

-2>In immediate terms, these deals amounted to wage cuts, since workers were forced to delay part of their compensation for inflation until after they retire. It's likely this will continue. Paul Keating has said he would like to see workers putting 12% of their wages into super by the end of the century.0>

Keating, and other political and business figures, make no secret of their aims. Firstly, they engage in scaremongering based on the fact that the population is ageing; they claim society won't be able to support a larger non-productive population, so people must make their own provisions for old age. As others have pointed out, this is mainly a means of introducing a new tax, of privatising the pension. Workers already make provision for their old age through taxes. But superannuation is a tax paid to private companies that will use it to make private fortunes. It amounts to privatisation of part of the tax system.

At present, people past retirement age are entitled to a pension that should enable them to live in economic security (though often it doesn't). For some, the growing reliance on super will mean a more comfortable income after retirement, but for most it will simply mean that they pay more now for very little change in their lot after retirement.

On top of that, super covers only the working population. It doesn't provide for those who, for any reason, don't earn incomes. Reliance on super could marginalise those who continue to rely on the pension, reducing their ability to defend their interests.

Finally, the biggest risk with super is that a lot of it is in the "safekeeping" of the very people who gambled away billions of dollars in stock market and property speculation over the past decade. As many ordinary people have learned in the past two years, bank crashes and freezes on financial institutions are not just ancient history. They can and do happen right now, and most of the big gamblers appear to come through not too badly, coping with their "bankruptcy" on the beaches of Spain, for example. How many workers who have been forced into the compulsory savings wage deals of the past few years will actually see their money after they retire? (Those who die beforehand certainly won't, and that won't do any harm to the super funds' balance sheets.)

-1>Like most of the rorts worked by the Hawke government against working people since 1983, superannuation is one more sly

way of making ordinary people pay for a social order organised more and more for the wealthy and powerful.0>

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