vA.
I I A'
PRIME MINISTER
TRANSCRIPT OF THE PRIME MINISTER, THE HON P J KEATING MP
SPEECH FOR THE NATIONAL SUPERANNUATION EDUCATION
CAMPAIGN LAUNCH, BERLEI FACTORY, RYDALMERE, SYDNEY
8 AUGUST 1995
E& OE PROOF COPY
Thank you indeed Paul ( Elliott), Lord Mayor, Jennie George, Richard Glass,
the Managing Director of Berlei, and Berlei executives, and members of the
work force, workers here at the Berlei factory, ladies and gentlemen.
It's a great pleasure to be here today, to be party to the launching of this
campaign to provide information to Australians about superannuation. Award
superannuation is one of the great undertakings of th6 isfdecade, and it is
now starting to blossom as a result of the Budget measures we announced
just a few months ago. It will be such that by 2002 which is not far away
every Australian working person will have 15% of their income going on their
account into a superannuation fund into a superannuation account for them.
What this will mean is when they retire, someone joining the work force will
retire on what is now twice the age pension, someone who is in the work
force already in their 30s perhaps will retire on about three-quarters of the
age pension, plus the age pension. So, it's going to mean a dramatic lift in
the standard of living of Australians in retirement, and, of course, put together
a huge pool of national savings, which can make a country stronger, which
means we will rely less ' dhV6Yverseas savings and overseas debt, and which
means we can power along investment and employmnent and exports. So,
this is a scheme that came from firstly, a lot of iriiagination, and belief in the
fact that Australian working people would put some of their income away as
savings for their long run retirement. And because they would be prepared to
do that, the Government would also be prepared to put income away, by way
of the tax concessions and direct payment, paying the tax cuts into
superannuation accounts. So as a consequence, we are going to see as
they say a very large pool of savings develop on behalf of each and every
person. To give an example, someone on average weekly earnings now that's
someone on about $ 32-33,000 when they retire, they will retire on a lump
sum just under half a million dollars. And someone on one and a half times
weekly earnings, will retire on a lump sum of over $ 600,000. And this will
produce an income stream in retirement which will guarantee them a much
higher standard of living than they have today.
You don't need to be a demographer to know that the Australian community is
aging. When my generation moves through to retirement, there will twice as
many retired aged people as there are today. And we will be relying upon the
people-the-n in ihelvork force to provide the standard of living in retirement
most of us have come to expect but there will be twice as many of us. So,
this Government, back in the 1980s with the ACTU saw the opportunity to
start to move towards some sort of national contributory scheme for all
workers, not just people in the public se~ f& o0-r somfe p-rivate cdTpanies, but
for all workers where something was put away by employers on their behalf in
lieu of wages. Some of the Accords we did in the 1 980s with the ACTU were
built on claiming less in cash at the time to allow something to go away in
savings for the future. And that's now up to around it will be 9% in 3 or 4
years from now, and then to that we add the Budqet contributions of this year,
3% tax cuts paid as super, and 3% from employees themselves, so the 9%
becomes 15% 9 plus 3 plus 3. And what it will mean is that we will see a
huge lift in national savings. A decade ago we had about $ 40 billion in super
funds. This year we have got $ 180 billion, and in the year 2020 when this
scheme is fully mature and up and running, we think we will have $ 2 trillion
that is 2 thousand billion dollars in superannuation fund assets. And people
talk about our national debt, and ttiat is an issue. But our national debt is
$ 160 billion we have already got $ 180 billion in super fund ass-ets thit year.
And we are going to have something like 2 thousand billion dollars, as I say,
in about 2020, or one thousand billion by the year 2000 not so many years
away. So, this is a mighty change. This is something most countries would like to
see their Governments do with their work forces. And this has been done by
a Labor Government with the work force, through the Accord. And it's not
been done bytax concessions to high income tax payers it's been done by
the fair and equitable way of this being allowed to go, these tax concessions
being widely available to all working Australians.
One of the things that I am most particularly pleased about, and that is the
support which super has given to women. Jennie already made reference to
that, and she has been herself a great stickler and supporter of this
advantage coming through to Australian women. You know that the pattern
of Australian female employment has been in respect of super that wherever
a person was actually lucky enough to have a superannuation fund, a woman
would have that tallying up for her. But if she left work to have a family, it
would then be either paid out as a lump sum and finished and terminated,
and mostly what she would get would be her contributions back and that
was the end of it. And if she happened to come into the work force later, she
could try and pick something up afresh from a cold start, but there was no
continuity. Now, there's preservation to age 55. Now, every one every
working woman will have a benefit in superannuation. And in the case, say,
of somebody going off to have a family, those earnings will continue to accrue
and will be there if and when that woman comes back into the work force.
And that will then grow and compound to age 55 under the tax concessions.
So, what we call preservation investing will be there for Australian women to
give them that support in their own name in their own right at a later stage
in their life. And this is, I think, an important social milestone, and a good
thing we have been able to do together.
So, there is a lot in this for the country, there's a lot in this for our future. We
need investment to get employment. But this is a big continent. The projects
that are growing all the time in this country as such that it is more than our
current national savings can afford, so therefore we put the call on overseas
savings or overseas debt. And this is where the current account and the debt
comes from. To deal with it, we need to do some things, like adding to our
national savings, like superannuation. We also need to do some things like
putting the Budget into surplus, which the Government has done. So you
have got public saving on the one hand, and you have got private saving with
superannuation on the other. These are the ways in the long term how we
will deal with our debt. Not some imagined productivity commission, or some
bit of economic fairy floss that wouldn't travel a yard under real scrutiny, but a
real national scheme, where the huge force the economic force of that
wealth going in 15% for everybody, every week, into the future. It will mean
a much greater pool of savings, higher levels on investment, therefore higher
levels of growth and employment, higher* levels of exports giving Australia
that sort of savings advantage it's never really had in the past. And, as we
say, that standard of living in retirement.
One of the issues in the United States at the moment as they say, one of the
concerns of Middle America is that many Americans believe that they won't
be provided for in old age. They won't be provided for because they know
there will be many more retired aged people when the baby boom generation
retires than is the case today, and they don't think the tax system, or the
public system, will keep income support up to them. Well, in this country, a
Labor Government thought about all that a decade ago, so that when we get
to that position, you will have people basically on twice the aged pension. So
someone on average weekly earn2injgs just before they retire will actually
retire on an income the same as'average weekly earnings. They will go out
on average weekly earnings, and their pension plus super will add up to
about the same amount. And then that will improve to a point, and then it
drops away, because it is there to support the great bulk of the work force.
So, it's a great change this is a great national scheme. It certainty is, in
financial terms, the greatest private savings arrangement that Australia has
ever had, and by launching this pr6gram today, we are trying to tell people
about it to involve them with it, to give them some confidence that the system
is going to be managed well for them, and that it is going to do good things.
I was particularly pleased to be at Berlei here today, and glad of the
information which Richard and his colleagues were able to give me about the
clothing and textile industry. Because when we started on the big reforms in
clothing and textile 10 years ago, people were talking doom and gloom " that
will be the end of TCF, it will be finished, there is no way we will be able to
compete with people abroad, we won't be able to make high quality
sophisticated things, we will simply be deluged with imports". Now, by again
taking the initiative and having that imagination and belief in Australians and
this industry that it could do better, we are seeing today a modern clothing
industry in Australia, which is not only providing products for this market, but
it is also providing for exports as well.
But the other thing that I thought was interesting about Berlei, was that the
building and the land was owned by the State Superan -nuation Board, and it
makes the point that here is this wonderful fe-iiniic1 -capacity her-t6 produce
a high quality garment, coming out of one of Australia's most committed firms
in this industry, in facilities which are owned by a superannuation fund. And
we are going to see more and more of this all around the country as your
savings will be placed in Australian industry and we will continue to see a
growth in the nature of the stock market, and a maturation where we start
seeing the stock and the investment industry actually supporting the
innovative companies, and we will be seeing a pool of savings needed to be
placed, to actually help all that along. I think this is a very encouraging and
exciting prospect.
So, I would like to, today, thank many people for their commitment to this
great national initiative to our colleague partners in the ACTU, represented
by Jennie George, to all those people in the work force who believed in
something better, in putting something away for tomorrow, to the industry we
have now got to build, to the investment industry who have to now meet the
challenge of what the Government has created, and to all those Australians
who know there can be something better out there in the future. We hope
that this campaign will answer some of those questions what is super? what
are my entitlements? how can I take my money? what is the Government
going to contribute? is the money going to be safe etc? what am I likely to
retire on? These are the questions that we know Australians want answers
to, this campaign is about opening up some of those opportunities to provide
them with those answers. I thank Paul Elliott for being involved with
the having the stewardship of this campaign, iifor those involved with it, I
am very happy today to be here today to officially launch it. Thank you.
ends.