Honey pots attract bees as well as wasps. So it would seem the $3.3 trillion (US$2.3 trillion) sitting in various super funds for the retirement benefit of Australian workers attracts interested parties.
Such a huge sum of money can be very influential. Those administering such eye-watering amounts have a huge impact on investment for major projects.
For the government, it can provide economic stimulus and social outcomes with other people’s money. And apparently, the treasurer, Jim Chalmers, in his recent statement on superannuation is going down that pot-holed road.
Ultimately, the money of which people speak and pontificate when they talk about super funds is the hard-earned income of Australian workers. In any discussion on the topic, surely the interest of the workers should be paramount.
While nice-sounding definitions and objectives of superannuation legislation are debated, the interest of the workers is too often overlooked.
Given the vast bulk of the funds are there due to the compulsory nature of the scheme, the fiduciary responsibility of the government and fund managers to the workers should be branded on their collective brain.
We have the treasurer wanting a nice motherhood “objective clause” inserted in the legislation to define the purpose of a super fund—while the opposition wants different wording.
Legislating the purpose of a compulsory scheme that takes money off workers may be a worthy and honourable objective. But the difference between the theory and practice may well be akin to the gap in the Grand Canyon.
Labor in 2015 had a proposal to insert wording to the effect of workers having access to the resources of a “dignified” retirement. One suspects this meant a retirement on the aged pension was not seen as dignified. Hardly a Labor mantra.
One Word, Countless Meanings
Suggestions that a well-constructed objectives clause would take the heat and politics out of super and indeed stop the super wars for the future is as naive as it is arrogant.The current government wants to shoehorn its definition and then declare the objectives clause a no-go zone. Hardly likely given that with every new government comes a change of policy and intention and indeed imperatives.
The fact the Australian trade union movement has gained a stranglehold over the super funds and milk literally millions of dollars of members’ funds for their pet causes via sponsorships and direct funding, including political parties, the approach taken by the new Labor government is to be expected.
Of course, that does not make it right.
The PR campaign advocating for parliamentary approval of the legislative change to the superannuation legislation is off and running with all the rhetorical flourishes of “equity,” “dignity,” and “sustainability.” Like “nice” and “good,” the words can mean everything to everybody and polar opposites at the same time.
To help unpack the deeper meaning of the grandiose wording, the treasurer provided some insights.
Apparently, the savings of individual workers in superannuation should apparently not be allowed for purchasing a home.
First, it is the workers’ money. Second, those who own their home in retirement, thus obviating rental payments, are substantially better off than their rent-paying counterparts.
So, just explain that trio of words—equity, dignity, and sustainability—again in practical terms.
Punishing Those Who Work Hard and Save
Using savings to help you through tough times is surely preferable to increased borrowing. This is another concerning insight into the treasurer’s thinking.The none-too-subtle hinting that superannuation accounts with over $5 million may be categorised as “excessive” reflects the deep-rooted envy and jealousy toward those who have worked hard and saved.
The virtue of saving has not been promoted sufficiently in recent decades and this latest expression suggests that in the eyes of the government, there is such a thing as saving too much.
In the current climate, it is difficult to rationalise such thinking unless it is founded on an ideology that promotes envy, and sees equity as cutting everyone down to the same common denominator.
Clearly providing rewards for those who make an effort to save larger amounts is not on the agenda.
A Way to Promote the Government’s Progressive Agenda?
The most concerning aspect of the treasurer’s speech about revamping the 10.5 percent portion of a worker’s wages for super is his view he can simply direct the funds into social policy initiatives of the government of the day—Chalmer’s new “values-based capitalism.”For the current government that means social housing, the care economy, and the transition to clean energy.
If these were such lucrative investment opportunities providing windfall returns for Australia’s workers one suspects the superannuation funds would be pushing each other out of the way to invest.
The fact that government direction is needed proves that fund managers aren’t doing their job, or that these suggested new investments just don’t provide good returns.
The duty of fund managers is to provide the best return for workers’ compulsory contributions, not to help subsidise a government’s social platform. Dressing this up as delivering a “double dividend” is the sort of language which even George Orwell couldn’t conjure up.
In this whirlwind of policy mayhem, one voice is missing—the voice of the workers whose money is at stake as well as their future well-being.
While the policy pontifications may smell sweet as honey, a drop in returns for workers who watch their money being directed by the government in pursuit of its agenda may see Australia’s nearly 14 million workers deliver a stinging rebuke at the next election.
