This reckless government and its business and media mates are determined to damage superannuation

Innes Willox, the chief executive of the Australian Industry Group, a Liberal party loyalist and ex-Liberal staffer, this week decided to break ranks with other industry groups that form part of the industry super firmament.

Willox may have been responding to the slur cast on industry representatives of industry funds by Michael Stutchbury in his infamous Financial Review editorial of Wednesday 2 October, where he claimed that employer representatives on industry funds were “cowed” by their union collaborators.

Whether this explains Willox’s volte-face or not, Willox claimed that one of the things needing to be weighed up was the cost of the 2.5% increase in the super guarantee to business.

Willox is kidding us. Labour productivity has been running at 1.1% per year for the last five years and, by 2021, when the SG is set to rise by 0.5 percentage point, the accumulated labour productivity will either be 8.8% or 9%.

Not a dollar of this labour productivity has been distributed to wages over the last five years and is unlikely to be over the next three.

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In other words, Willox’s members at AiG will have pocketed in their balance sheets at least 9% of their workers’ productivity, of which Willox now says they will have difficulty paying 2.5% back as extra super.

“Difficulty” paying a quarter of the undistributed labour productivity to their employees’ superannuation accounts.

Liberal and National party MPs who cavil at the prospect of ordinary people getting a further 2.5% of income into their super happily enjoy the government contributing 15.4% of their income into their parliamentary retirement accounts.

Ordinary working men and women have been jammed by the Liberal party at 9.5% of wages going to super, while parliamentarians, without a hint of reflection or embarrassment, pocket 15.4% into their own super accounts.

And even though the parliament, and I emphasise the parliament, has legislated to compulsorily provide 12% of wages to the super accounts of the great body of the Australian workforce, the Liberal party wants to take it away. They want to kill the last two-and-a-half percentage points.

So the case Willox is effectively arguing is 15.4% for the pollies, just 9.5% for workers and a mean clawback of the extra 2.5% which the parliament has otherwise legislated.

The meanness and avarice of it has to be seen to be believed.

But Willox, in his breakaway from the industry fund firmament, is not doing this for himself. He is doing it under pressure from the government, which intends to jam superannuation at 10% coming up to the 2024 federal election.

Because of the legislation, the government will not be able to stop the first half percentage point being paid to workers ahead of the next poll. This will take everybody’s super to at least 10 percentage points.

But as the government has now set up this review group, including on the movement to 12% super, on the recommendation of Karen Chester – even though the matter of the legislated 12% was never part of Chester’s specific terms of reference – it is obviously the Trojan Horse the government will employ to attack both compulsion in superannuation and the mandated 12% contributions.

The government has repeatedly relied upon the discredited analysis of the Grattan Institute, which claims that if employees take extra income as superannuation they will lose the equivalent in wages.

This, of course, is a demonstrable lie. There has been absolutely no addition to compulsory superannuation contributions over the last five years, yet there has not been a jot of increase in real wages over the same period.

For the Grattan analysis to have been correct, we would have seen real wages rise by at least 2.5%, where, in fact, they have not risen at all. And what’s more, given the current international division of labour, the likelihood is, will not be rising.

So, were the government to convince the Senate to undo the current legislated 2.5% increase in super from 2021, Australian workers will simply lose 2.5% of personal income for the rest of their working lives.

Making this simple – working people will either get the 2.5% extra super or they get nothing.

So the battalions of regression are out in force. John Daley of Grattan, wishing to push Australians back on to the age pension, walking away from the massive self-provision of superannuation, while Michael Stutchbury orchestrates his permanent Financial Review campaign against what he calls Big Super and what he believes are its prospects in controlling large industrial companies.

Active corporate management is not Stutchbury’s bag. Incrementalism and old boy directorships is where he feels at home and where his paper is most comfortable.

Superannuation has revolutionised Australia. It is the greatest reform to capital markets in the history of the country.

At $2.93tn in total accumulation among a workforce of 12.9 million, the pro-rated savings of each working Australian comes to a remarkable $230,000. A sum actually vested in every working person’s name – not some government fund.

More than that, the superannuation guarantee has virtually wiped out Australia’s net income deficit for the first time since European settlement. For the first time in our history, Australia has now become a capital-exporting country. And the domestic manifestation of this is and has been a much lower cost of capital to Australian business.

This year, an Australian 10-year Treasury bond pays less than 1 percentage point. Yet the larger industry funds this year recorded returns on average of 9%. A truly remarkable outcome. And an outcome putting asunder the mealy-mouthed notion that superannuation is somehow inefficient.

Where else, in this low interest rate world, would an ordinary working person be able to earn 9% on their savings?

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So, what else should anyone expect super to do – polish their shoes? Or maybe put out the garbage?

Only a government of indecipherable recklessness would upend or damage such a system. Yet this is what the Liberal party and its business and media cohorts are in the process of contemplating.

Karen Chester’s retirement review, so unauthorised in its conception, yet so enthusiastically adopted by the government, will no doubt be the cat’s paw the government will employ to tear away at the economic security Australians were coming to rely upon as they approach or enjoy their retirement.

• Paul Keating was prime minister of Australia from 1991 to 1996, and treasurer from 1983 to 1991