Secret super plan could dud workers

A SECRET plan to nationalise Australia’s $3 trillion super system could rob millions of workers out of six figure sums – all to provide a slush fund for political pork-barrelling, a new report has found.

Industry Super Australia (ISA) chief executive Bernie Dean says such a scheme would dud workers and become a political plaything to allow politicians to pork-barrel electorates in a bid to buy votes.

“This plan would funnel millions of Australian workers into an expensive and poor-performing government-controlled super fund – all so politicians can get their hands on people’s money,” Mr Dean said.

“Workers’ savings would become a slush fund for pork-barrelling by politicians chasing votes rather than investment returns.”

He says ISA modelling shows that a 30-year-old worker in such a government-run fund would pay exorbitant fees, earn lower investment returns and end up $126,000 worse off at retirement compared with being in a top-performing industry fund.

The report called “Nationalising Super: Why politicians should keep their hands off your retirement savings” reinforces earlier evidence from the Productivity Commission that a government-run super fund would be prone to political interference and riddled with conflicts of interest.

The ISA report warns governments, with almost unchecked power to spend workers’ savings, could find it hard to resist ladling out money for pork barrels in marginal seats, all for the purpose of chasing votes rather than good investment returns.

Political ideology could also trump the financial interest of members, especially when a government makes itself the investment officer, trustee, owner, regulator and supervisor, the report said.

“If the Treasurer wants to nationalise super, he’ll need to explain to millions of Australians why he shoehorned them into a dud fund that could leave them $126,000 worse off at retirement,” Mr Dean said.