That is, to bust the “preservation rule” of superannuation altogether, thereby destroying in Australia the best retirement savings system in the world. In Shepherd’s terms, ruthlessly exploiting a national crisis to secure his own miserable objectives.
Even the conservative British Chancellor of the Exchequer, Rishi Sunak, told his country “this is not the time for ideology” in facing what he described as an “unprecedented emergency” – yet Shepherd, here in Australia, throws any such altruistic motivation to the wind to grab the chance to smash the superannuation system, a system he has recently tried to upend.
Shepherd, and people like him, play on the fact that many people do not know, or understand, that individual member superannuation contributions represent but 20 per cent only of an accumulation at retirement. That the other 80 per cent comes from compound earning in the fund. From the “preservation” rule, the funds are left to gather earnings and interest on interest till retirement. Shepherd’s gambit is to bust that rule.
So he pretends to “help” people by encouraging them to rip out money now, knowing full well it will cost people four times their savings to do so.
Such a policy would destroy superannuation and, over a relatively short space of time, force the whole retired workforce back onto the age pension.
In social policy, Shepherd has form. As chairman of Tony Abbott’s National Commission of Audit, Shepherd was the author of the attack on Medicare with the system of co-payments in Joe Hockey’s ill-fated 2014 budget. Indeed, the great bulk of Hockey’s budget was a straight lift from Shepherd’s Commission of Audit report, including the dumping of the Commonwealth-State agreement around the Gonski education recommendations.
After the abject failure of the Hockey budget of 2014, if you were Shepherd you would have gone into hiding. But not him. Bold as brass, having failed to destroy Medicare, he’s back now to exploit a national crisis to do irreparable damage to superannuation.
Paul Keating was the prime minister of Australia from 1991 to 1996.