SUPER: THE BIGGEST RORT IN AUSTRALIA
THE biggest rort in Australia is compulsory superannuation. The billions of dollars that the managers of money rip off millions of Australians every year utterly dwarfs the excesses exposed in the banking royal commission.
Outrageously, both the Government and the Opposition are running a unity ticket to ratchet up the rort, by mandating that even more of your money must – compulsorily, by law; and if you don’t like it: tough – be handed over every year.
Labor wants to send more money to the uniondominated industry super funds – which will create yet even more lucrative featherbedded jobs for ex-Labor pollies who lose their seats in federal or state elections.
The Coalition wants to send more money into the hands of the corporate and retail ‘for-profit’ (especially for their managers) super funds.
The money is your money, on two levels. It’s first, what could otherwise come directly to you in wages and salary. But it’s also the cost in higher taxes from the tax concessions handed out both on the money flowing into the funds and then on their income.
Labor wants to add a vicious little twist to this, by ending the refunding of socalled excess franking credits. This will mostly hit self-funded retirees and direct investors. But super funds and especially
industry super funds should be able to sidestep it and keep the money, your money.
The whole justification for compulsory superannuation was that over a lifetime it would build up balances so that most people would not have to go on the Age Pension
and would actually end up with a better retirement than if they did.
That’s to say it would be a clear win-win. It would end up saving taxpayer money – the pension savings would be greater than the tax benefits; and yet retirees would be better off.
Well, after nearly 30 years, it’s now blindingly clear that is not going to happen. It’s not going to happen with the 9.5 per cent of wage/salary that goes into super now; and it still won’t happen if that’s bumped up to 12 per cent.
The retirement balances will still be insufficient; most retirees will cash some or all of theirs, sufficient to get them on to a full or part pension.
The only absolute winners along the way would be the super funds and their managers, as they got to take their slice of the extra money flowing into the near-$3 trillion pot of super money.
The far Left-wing Grattan Institute got it halfright in pinging the rort. But it got it even more ludicrously wrong in claiming people would retire wealthy with the 9.5 per cent.