Commentary
Australia’s superannuation saga began in July 1992, when Prime Minister Paul Keating enacted the superannuation guarantee.
This audacious plan ensured employers chip in for their employees’ super, a stark contrast to our Kiwi cousins who, when faced with a similar proposal, collectively shot it down in a referendum with 91.8 percent voting against it.
Senator Gerard Rennick—part accountant, part economic crusader with a Masters in taxation—has declared that superannuation is the economy’s bête noire, an unforgivable sin against fiscal management.
He told ADHTV, “Superannuation was the worst thing to ever happen to the economy in this country.”
And why, you might ask, should this bastion of bureaucratic bungling be axed? Here are eight reasons to ponder.
1. A Retirement Red Herring
Cameron Murray, an economist, points out in The Guardian that super was never really about nest eggs for your golden years.
Born from a panic over wage increases in 1985, it was a clever ruse by then-Treasurer Paul Keating and Australian Council of Trade Unions (ACTU) President Bill Kelty to keep wages in check, dressed up as a generous future-proofing of workers’ retirements.
2. A Boon for the Banks
With interest rates soaring over 6 percent, the average Joe needs to hustle harder to make ends meet.Senator Rennick bemoans the cruel irony that every dollar funnelled into super is but another brick in the towering wall of mortgage debt, telling The Epoch Times that every dollar put into super is another dollar higher on your mortgage.
Liberal Senator Gerard Rennick during Senate Estimates at Parliament House in Canberra, Australia, on April 6, 2022. AAP Image/Mick Tsikas
3. The Pension Predicament
Fast forward from 1992 to today, and the promised land of pension-free retirement remains as elusive as a dropbear in the Daintree.Senator Rennick points out that the ranks of pensioners haven’t thinned one bit since ‘92, leaving us to wonder, “What’s all the fuss about super, anyway?”
4. The Great Unrealised Gains Gambit
Calculating unrealised gain involves a system so complex that not even the cleverest of accountants can decipher the true cost of an asset before the clock strikes midnight on June 30th.The quest to calculate unrealised gains morphs into a Kafkaesque ordeal, replete with spiralling compliance costs, auditors in abundance, and the ever-looming spectre of liquidity crises. It’s a merry dance around the Maypole of fiscal uncertainty, where the only certainty is the taxman’s grin.
5. The Myth of Free Money
In a revelation that might shock the uninitiated, it turns out that super isn’t a pot of gold at the end of the rainbow but rather a chunk of your pay cheque that’s been spirited away by third-party financial wizards.These conjurers promise to safeguard your hard-earned cash, albeit with the minor caveat that you have as much say in its management as a kangaroo has in your choice of breakfast.
6. A $30 Billion Feast for the Financial Vultures
Australians fork out over $30 billion (US$20 billion) in fees to the very stewards of their future, whilst simultaneously bleeding $50 billion in tax concessions.This economic bloodletting, favouring the top echelon of earners, starkly contrasts with the $55 billion pension lifeline thrown to the bottom 70 percent of retirees.
It’s a banquet of disparity, where the rich get richer on a diet of fees and concessions.
7. The Infrastructure Illusion
Senator Rennick spoke to The Epoch Times about former Prime Minister Bob Hawke who once envisioned a superannuated utopia, where the golden nest eggs of Australian workers would pave the streets with infrastructure.Welcome to 2024 where we find a trillion dollars of this promised gold hoarded overseas. It seems the road to infrastructure was not paved with super contributions.
8. The Woke Broke Phenomenon
In a final act of defiance against common sense, superannuation boards, untouched by the opinions of mere mortal investors, have taken a gamble on the green dream.One example is UniSuper’s foray into the environmentally conscious EV market that ended in a $700 million debacle, proving that going woke might indeed mean going broke.
The super client, who is devoid of voice or choice, watches as their retirement savings are whisked away on the wind turbines of costly investment strategies.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
