It’s time for employers to pay another 3pc, says minister

BY: BRENDAN NICHOLSON From:
The Australian
October 24, 2011 12:00AM

WHILE super funds have lost $75 billion over four years, the minister insists employer contributions must rise to 12 per cent.

Assistant Treasurer Bill Shorten, responsible for financial services and superannuation, said yesterday workers nearing retirement had been exposed to a 35 per cent loss in the value of equities since 2008.

Super accounts have been hammered by the global financial crisis and fears of a double-dip recession in Europe and the US.

The Weekend Australian revealed on Saturday that baby-boomer retirees were being forced back to work with almost nothing to show for contributing $430bn in compulsory super since the GFC.

Mr Shorten said these people were “doing it hard” and many had not saved enough to retire.

“Thank goodness we have compulsory superannuation,” Mr Shorten told the ABC’s Insiders program.

But he said 9 per cent was not adequate for people to retire on: “That’s why it’s so important we lift superannuation from 9 to 12 per cent because we don’t want people working their whole life . . . and then retiring poor.”

Mr Shorten said Australian investors should not lose faith in their own stocks.

“When you look at Australian stocks, at the moment, I still think they’re a good bet,” he said.

” I think the fundamentals of Australia are solid.”

Mr Shorten said that was not just a benefit of the rise of China.

“We’ve got relatively low unemployment compared to the rest of the First World. Our public-sector debt . . . is the envy of the rest of the world.

“And we’ve got a big stream of projects coming on. In the mining and hydro-carbon sector last year it was $47bn worth of projects. This year it’s projected to be $82bn.”

Mr Shorten said Australia’s super scheme had big macro-economic benefits, comparing it to the problems facing the US.

Had the US followed Australia’s lead in 1985 and again in 1992, “the Yanks would have $13 trillion in savings”, Mr Shorten said.