Nationalise Super?

Alan Kohler has cashed in the franchise with a piece in the Australian today advocating that Super be nationalised.

Superannuation is the only product where choice and competition are not only completely pointless, they are counter-productive.

That’s because choice and competition just set up inequality: different people end up with vastly different retirement outcomes through no fault of their own, as a result of making an uninformed, barely conscious choice 40 years ago.

That’s why there should be one national fund, providing whole of life savings. That is, not simply coughing up a cash lump sum at retirement, to be taken off to a financial adviser and skimmed and invested until it’s all gone.

Mandatory super savings should be collected into a single national fund that saves to retirement and then pays a pension until death. It should be a continuum.

Competition should be confined to the fund managers competing to manage the money by providing the best returns and lowest fees.

I’ve got a better idea – why not simply let the politicians spend our Super on nation building exercises and then pay us a pension out of future tax revenue? What could possibly go wrong?

 

This entry was posted in Budget, Economics on the left, Superannuation. Bookmark the permalink.

80 Responses to Nationalise Super?

  1. Pyrmonter

    That the suggestion is remotely plausible indicates how rotten the existing super arrangements – the industry funds’ governance, the fee-gouging, inconsistent tax concessions, non-collection of contributions and all – are.

    Time to vest the lot and start again with a product neutral retirement savings policy.

  2. Infidel Tiger

    Holy crap. Kohler has been drinking deeply from the water fountain at ABC HQ.

    I note that Alan is multi-millionaire who made his fortune swindling Rupert during one of his divorce periods and has no need of a retirement fund.

  3. Bear Necessities

    I can just imagine the asset allocation that would occur with these funds. Would there be a compulsory “Sustainability” class?

    Letting the bludgers who have given us NBN, RET, NDIS and Fairwork Australia decide on a framework for our retirement funds would be the final straw for Australia.

  4. JC

    Kohler get stupider as he gets older. Time for News to write off the purchase and send him off.

  5. kae

    Oh goodie, say pollies.

    Another future fund to raid.

    Isn’t this what happened in the 40s or thereabouts with an increase in income tax to cover future pensions?

    Everyone knows there’s only only account the Government uses, they call it Consolidated Revenue.

  6. Econocrat

    How long ’til the Government decides that they would use it better than you would, then expropriates it all via taxation (or for a few magic beans).

  7. Tom

    choice and competition just set up inequality

    FMD. Kohler finally confesses he loathes capitalism. And wants the government to nationalise super — which would double the cost of providing it.

    My theory is that, ever since he induced Ruperdink Mudrock to pay overs for his Fairfaxian business commentary site (no substance required), he has decided to become the resident Stalinist at News Corp, with a series ever-more hysterical neo-communist rantings.

    And the more he comes out, the more he is a liability at News Corp.

    Of course, Boris Whittaker’s secret strategy may well be to steal even more of the clueless big business readership from the dying Fairfax anti-business daily with a sort of Venezuela Today daily feature.

  8. Pickles

    Who could have foreseen any of this?

  9. duncanm

    I’m so f’n glad SMSF’s exist.

    It makes it that much harder for the government to steal (more of) our money.

    Harder .. but not impossible.

  10. George

    Astounding – does Kohler do any research before he writes? Has he checked (for example) the state of Italy’s national super scheme?

  11. thefrolickingmole

    Im with Pickles.
    Anyone under the age of 40 who thinks there will be “super” in any recognizable form available in retirement isnt paying attention.

  12. That’s why there should be one national fund, providing whole of life savings. That is, not simply coughing up a cash lump sum at retirement, to be taken off to a financial adviser and skimmed and invested until it’s all gone.

    Yeah, we could call payments in as the Compulsory Contributions Scheme (CCS), and payments out as a “pension”. You reckon they have a nice ring to them, Doomlord? I know, CCS payments could be taken out with PAYG income tax installments. That would be innovative, eh Sinc?

    Mandatory super savings should be collected into a single national fund that saves to retirement and then pays a pension until death. It should be a continuum.

    Sounds good, Doomlord. We could call it the National Welfare Fund (NWF). What do you reckon, Sinc?

    Maybe you should get your “top PhD graduate” onto it, before it all “disappears into the mists of history”, as a certain well-known economist once speculated here.

    .
    No, I’m not going to put a /sarc tag on it.
    1946 here we come.
    Again.

  13. Empire GTHO Phase III

    MV provided the narrative some time back and here they come!

    Whatever happened to Kohler, be is now owned by “them”.

  14. Squirrel

    Nationalised super – I can almost hear the toot toot of the VFT whizzing along the tracks, and see all those trenches being dug up again to lay a non-“fraudband” NBN – this is the wet dream to end all wet dreams of the rentseekers.

    Simply phasing out the scope for double-dipping would be a somewhat simpler and more practical change, and will probably be unavoidable eventually, anyway.

  15. Gab

    Watch Turnbull jump on this idea faster than you can put your hand on your wallet.

  16. Empire GTHO Phase III

    MV

    The industry funds won’t be delighted by the idea and would have to paid off somehow.

  17. Empire GTHO Phase III

    Astounding – does Kohler do any research before he writes? Has he checked (for example) the state of Italy’s national super scheme?

    I thought the same, George, but for a statanist the Italian experience would be evidence in support of.

  18. Rabz

    Meanwhile, the latest in ALPBC idiocy, example eleventy gazillion and twenty three:

    How the free market failed Australia
    The free market has led to Australia being priced out of its own gas supply, Ian Verrender writes.

    And no, I’m not linking to it.

  19. Infidel Tiger

    Ian Verrender is Australia’s most clueless commentator.

  20. Bob in Castlemaine

    Nothing like having the chosen ones in charge of your retirement nest egg.
    We can be sure that the Labor/union old-boys will manage it as if it were their own…?
    Who could fail to be confident of the outcome with the likes of Combet, Weaven, Bracks, Brumby and in the not too distant future maybe bruvver O’Connor?
    Spend it while you still can I say!

  21. JC

    Ian Verrender is Australia’s most clueless commentator.

    Strange second name too.

  22. Megan

    Ian Verrender is Australia’s most clueless commentator.

    Closely followed by Kohler, A. Superannuation Moron of the highest order.

  23. Bruce

    The “thieving bastard cycle” is about to click over AGAIN.

    It has been done before in Australia’s benighted history.

    Only the names are changed to protect the guilty.

    The old 1930’vintage “Tax Form” was called something like the, “Income tax and pension fund” form.

    Gold, non-perishable pharmaceuticals and small arms ammo; about the only “investments” worth a cracker these days, and I have my doubts about gold.

  24. Atoms for Peace

    The last hollow log is certainly attracting a lot of attention at the national level.
    Fancy having trillions of hard earned dollars just sitting there waiting for an enlightened governmental hand to “help”.

  25. The industry funds won’t be delighted by the idea and would have to paid off somehow.

    True, Empire. I have no idea exactly how, but I’ll bet there’ll be some innovative and agile EBA agreements negotiated. Especially on all the you beaut “infrastructure projects” that they will be able to finance.

    $2.5 trillion in funds earning $170 billion a year, with $130 billion a year in new contributions.
    Think of the fund as 500 Wonthaggi desal plants, plus 60 more new ones a year.
    That’s a lot of work for the bruvvas at maaates rates.

  26. EvilElvis

    Strange second name too.

    Rhymes with surrender…

    I keep telling my beautiful partner (bless her cotton socks) that her valiant and near obsessive squirreling away into super will end in tears. She believes in returns and compound interest, oblivious to the narrative that is taking hold. BS will be straight in, infrastructure financed through super? You bet! All fucking wind turbines and other worthless shit…

  27. Ian Verrender is Australia’s most clueless commentator.
    Closely followed by Kohler, A. Superannuation Moron of the highest order.

    These guys are not floating a new idea.
    They’re simply reading to you from a long prepared script.
    It was all covered in the Murray Financial Review.
    I went through it step by step at the time, complete with links.

  28. H B Bear

    Just when you think these bozos can’t get any worse they do. As noted, Kohler is Rupert’s Myspace of business correspondents proving once again that old people just don’t get the Internet.

  29. Michel Lasouris

    I reckon allowing first home buyers with proven saving ability should be able to ‘borrow’ the deposit from their Super; provided that when they sell that money goes back into their super fund. That way, the scheme should have no influence on increased prices. Perhaps the initial deposit (when returned to the super fund) should have increased by with the Inflation index. If the house remains theirs until retirement, then the asset has remained with them and should not be taxed.

  30. Lem

    I’ve said it many times. They will come for your super, it is the biggest honeypot, and Kohler may just be the herald. Anyone who still has super tied up in shares in any sort of institutional fund would do well to consider the benefits at what is likely the top of the market to get out now, start a SMSF with the cash and hang around for the bargains that may be coming. If you have a SMSF they may still figure out ways of extracting value, but at least you will be one step of the game, because when your super is erased through a market correction it will be many many years back through the quagmire to get just to where you started.

    A SMSF is akin to throwing up the barricades to these thieves.

  31. Empire GTHO Phase III

    A SMSF is akin to throwing up the barricades to these thieves.

    Effective ten years ago and not too late.

    Offshoring some assets might be wise too.

  32. rickw

    Fucking Communist!!!! WTF??

    The arseholes in Government can’t run anything and someone wants to Nationalise super?! FMD, every spiv on the planet will be knocking on the door!

  33. stackja

    Didn’t Keating ‘invent’ superannuation to ‘save’ Australia?

  34. .

    Maybe you should get your “top PhD graduate” onto it, before it all “disappears into the mists of history”, as a certain well-known economist once speculated here.

    If you were paying attention, the law was repealed and you ignored it. It is on the Federal Register of Legislation.

    …and no I’m not going to link and do your homework for you (again).

  35. Harald

    Some may think that it is Turnbull who is likely to jump at nationalising Super.

    But .. Just as a gentle reminder, let me quote here Tony Abbott in his book Battlelines (page 108):

    The cost of superannuation concessions is another issue to consider. At some point, saving money by keeping people off the pension while forgoing revenue to encourage them to make alternative provisions becomes counter-productive. It could be simpler and fairer for the revenue forgone in concessions to be provided as a pension instead.

    I spat my beer in my keyboard at the second word: “cost”.
    The instant superannuation “concessions” are thought of as cost to the gov’t, all hope for a reasonable conclusion is lost.

    But there you have it:
    That is the “right wing” of the Libs, the conservative wing, writing down their ideas on Super.

    I agree with one thing Abbott wrote in his book, though: pols do not write enough books. At least you know what you can expect from these duds.

  36. Suburban Boy

    Quite apart from all the other objections already stated about Kohler’s latest brain-fart, there is this one: diseconomies of scale.

    The problem that comes from investment funds of massive scale – such as proposed by our Alan – is that every time you try to trade even a small fraction of your portfolio, you move the market against you. But somehow I doubt he’d ever thought of that.

  37. Dr Faustus

    A SMSF is akin to throwing up the barricades to these thieves.

    It also won’t be obliged to invest in national infrastructure, or social housing bonds, green bonds, gender equality bonds – or any of the proliferating ‘ethical investment’ funds currently picking winners in the low carbon future.

  38. If you were paying attention, the law was repealed and you ignored it. It is on the Federal Register of Legislation.

    No Dot, at the time we last had this out, it hadn’t been repealed, which is why the Doomlord’s “top PhD graduate” could only speculate that it had “disappeared into the mists of history”. As it turns out it was repealed – well after all that discussion, in September, 2014.

    What you and others posted, with much fervor, were links to the repeal of various pieces of legislation relating to the disbursement of CCS funds, not the collection of them.

    But I’m not going to argue about it. You can go on believing
    A) – that this never happened before, and
    B) – today’s announcement by Kohler comes as a complete surprise, out of the blue.

    Not everybody here is so gullible. But you go right ahead.

  39. .

    What you and others posted, with much fervor, were links to the repeal of various pieces of legislation relating to the disbursement of CCS funds, not the collection of them.

    Wrong. It was repealed. Stop carrying on like it is 1985.

  40. Lem

    Offshoring some assets might be wise too.

    Or just “off lining” them. Too late for any assets in super, except to barricade in a SMSF. But you can off line other assets and should. The pickings are getting thin for government, so they will be casting around for whatever they can get. Make it an obstacle course.

  41. Pyrmonter

    Rabz and IT – you’ve overlooked Michael Janda, Michael West and Adele Ferguson. However, they are of a kind.

  42. Oh come on

    The ghost of JK Galbraith called and wants its magic pudding back.

  43. Oh come on

    Ian Verrender is Australia’s most clueless commentator

    Verrender is a low-rent Alan Kohler. Which is to say he’s very fucking low rent.

  44. Roger W

    They call it National Insurance contributions in the UK – but at least you get a guaranteed, indexed, non-means tested pension in return.

  45. Oh come on

    Until the money runs out, Roger.

  46. Lem

    Or they totally inflate the currency they will pay you in away Roger, so your pension buys you zip. How do you not understand the zillion ways they hate you having economic freedom?

  47. Oh come on

    Honestly, I can’t believe this shit is being rehashed. The likes of Milton Friedman discredited it decades ago.

    Honestly, a colossal number of economists are just grossly stupid. Apparently in the 50s these ‘national insurance’ and compulsory public defined benefit schemes were viewed as literally miraculous money trees that somehow paid out more than was put in. The prevailing economic wisdom never countenanced the possibility that the system may stop functioning so miraculously if more money was taken out of the system than was put in.

    Just the most bizarre failure by supposed experts to apply primary school-level arithmetic to their theorising.

  48. Tel

    The Left have finally realized that direct theft of Super will be detected by the now battered and awake population. Thus, they need to go for Plan B which is find an excuse to nationalize and then start the theft.

    Pretty transparent bunch.

  49. Tel

    Come to think of it, the Liberal Party should consider writing a three line perl script that sends SMS to every single mobile number in Australia, send from from YOUR SUPER FUND with the simple message, “The ALP want to steal your Super. They will rob you blind.”

    It’s probably slightly more honest than Mediscare from last election, and there’s an established legal precedent that such things are (somewhat strangely) fully within the acceptable bounds of Australian electoral law. I mean, if there was a problem with it, then someone would have been prosecuted already, right, right?

  50. Lem

    The problem is Tel, that the battered are not so awake, and likely will fall for the promises of another Ponzi that is nationalised super, to relieve themselves of thinking about their own true self interest. After all, there’s always another episode of MKR to watch.

    The merry go round of “government” freakin’ well could pull this off. Watch out for a bipartisan project to achieve it in “the national interest”.

  51. .

    If I am forced to be part of a forced savings ponzi scheme, at least let me choose where the money goes.

    This might be more about choice of super being attacked rather than a tax grab.

  52. Lem

    Except, Dot, you are not forced to be a part of a savings ponzi scheme yet. And you should fight such a deeply evil thing to the death.

  53. Eyrie

    Relax people, I’ve told you before Kohler is a COMEDIAN. The best satire is nearly indistinguishable from the truth.

  54. Neil of Sydney

    Just as well Costello locked up the Future Fund otherwise Rudd/Gillard would have spent it. I have seen lots of lefties say we should be doing something with the $100B in the FF.

    Costello started several other funds now looked after by the FF. One was called HEEF but Rudd changed the name to EIF, Education Investment Fund and then started to raid the fund. Costello’s idea was to keep the capital and add to it in future years and spend the interest. But Labor spent some of the capital.

  55. Lem

    Just as well Costello locked up the Future Fund otherwise Rudd/Gillard would have spent it. I have seen lots of lefties say we should be doing something with the $100B in the FF.

    The greatest defenders of the spending of the FF will be the beneficiaries, who also direct policy to whoever is holding the baton: the public servants (sic). They’ll fight off the politicians as long as they can to defend that bucket of money.

  56. L.B.Loveday

    The Singapore Central Provident Fund works extremely well and has played a big part in their economic “miracle” which has resulted in a higher per capital GDP than Australia and a home ownership rate of >90%.

  57. Lem

    Yeah, will that would be great if we were Singapore.

  58. john constantine

    The future fund is already gone, their left quote net government debt zeroing out the future fund balance.

    The nations super funds are already committed, to meet the nations crippling unfunded future liabilities.

    All that is required is to focus group a few approaches and develop the path of least resistance to allowing the proles to accept their super being ‘gone’.

  59. JohnA

    Nationalize?

    Did Alan Kohler fall from the sky in that last light shower of rain?

    And did he hit his head (hard) on the ground?

  60. Rob MW

    With more than a Trillion $$$$$$ dollars just sitting there and with the overall national (Fed, state + local) debt being just short of a Trillion $$$$$$$ it was only a matter of time before the word “Nationalise” would come up. The polies have been licking their lips since the sale of Telstra to ideas of where they can get their hands on more free money to spend on identity politics, victimhood, race baiting and swelling the size of the swamp. Why is anyone surprised that someone actually said what the political and elite class have been thinking since Howard sold the last Gov monopoly, and spent ever so well !!!!!!

  61. C.L.

    Ian Verrender is Australia’s most clueless commentator

    Two words, my friend:
    1. Paul.
    2. McGeough.

  62. Justin

    Time to scrap super. It is a failed experiment. The numbers never added up. It depresses consumption and economic growth and costs the budget. Its failed.

  63. Dr Faustus

    Watch out for a bipartisan project to achieve it in “the national interest”.

    Well, that’s nearly certain.

    Australian Government of all flavours is firmly up against structural debt, the implied social compact that exchanges their livelihoods for the obligation to deliver an adequate unearned living on the public purse – and no means to pay for it all without disturbing the vote-nest.

    The two sources of income with the lowest vote-risk are: $2 trillion in super ($1.1 trillion owned by an electorally-small number of non-mattering voters) and death duties on ‘wealthy’ non-matterers, who have come to the end without consuming their own resources.

    It will happen.

  64. Hydra

    Superannuation is the last trick of the left, waiting to be properly unleashed.

    Backpackers are already taxed at 95%.

  65. NewChum

    I reckon allowing first home buyers with proven saving ability should be able to ‘borrow’ the deposit from their Super; provided that when they sell that money goes back into their super fund. That way, the scheme should have no influence on increased prices. Perhaps the initial deposit (when returned to the super fund) should have increased by with the Inflation index. If the house remains theirs until retirement, then the asset has remained with them and should not be taxed.

    Or maybe the most sparsely populated continent on earth could release more land for building houses on, and maybe even think about starting a couple of new regional centres. They could even hold Oklahoma style land races, and sell the rights to reality TV.

    SMSF is just the latest wave to keep the air in the property bubble. We still are not investing or trying to get started any high growth, high return industry. And we are trying as hard as possible to chase out all the existing industry and replace it with public servicing and baristaring.

    The saw must be getting through the last legs in the table now, surely? Or is it just immigrant flow trading on our status as the last safe and stable country on earth keeping the bubble inflated?

  66. harry buttle

    I have always assumed that my super will get pillaged before I can access it, as a pool super is just too much money for Gov’t to keep its grubby mitts off of.

  67. Crossie

    from YOUR SUPER FUND with the simple message, “The ALP want to steal your Super. They will rob you blind.”

    Tel, that is a cracker of an idea that Mal and Scott Morrison will never use as they plan to rob us just as much as Bill Shorten.

  68. Entropy

    C.L.
    #2332158, posted on March 20, 2017 at 10:22 pm
    Ian Verrender is Australia’s most clueless commentator

    Two words, my friend:
    1. Paul.
    2. McGeough.

    Here are another two words: Peter Martin.
    Let’s face it, a target rich environment. All wrestling with ways to get hold of OPM.

  69. Pyrmonter

    CL/Ent

    Nah, Peter Martin’s a step up from that lot. Not good, but not illiterate. Whereas Stephen Long and his advocacy for high unemployment and low productivity deserves addition to the list:

    http://www.abc.net.au/news/2017-03-21/have-the-right-to-strike-laws-gone-too-far/8370980

  70. tgs

    Kohler has always been an utter moron.

  71. and this is coming from the same allan kohler who is passionately advocating the spending of superannuation funds on renewables? the man has lost the plot

  72. Newchum, history clearly shows that where production is routinely stolen, production falls to subsistence levels. There will be no worthwhile investment in this country until the thieving stops. But instead, it’s being ramped up.

  73. Working Canadians (except Quebecois) pay into the Canadian Pension Plan, the CPP. There are pros and cons to this plan : http://business.financialpost.com/fp-comment/cpp-is-a-gamble-not-a-guarantee

  74. Gold, non-perishable pharmaceuticals and small arms ammo

    Yes, and the NFA is poised to tightly regulate and restrict the amount of ammo you are able to purchase or store to what the government feels is “sufficient” for your needs.

  75. Bruce

    Bruce in WA:

    Surely there couldn’t be a link between “restrict the amount of ammo you are able to purchase or store to what the government feels is “sufficient” for your needs.” and the creative financial shenanigans, could there?

  76. Bruce in WA

    Surely there couldn’t be a link between “restrict the amount of ammo you are able to purchase or store to what the government feels is “sufficient” for your needs.” and the creative financial shenanigans, could there?

    I guess anything is possible, but I think that’s giving them far more credit for intelligence than they deserve.

    I’m sure their reasoning is more along the lines of, “Can’t shoot no-one if you don’t got no bullets”.

  77. Bruce

    A gun without ammo is just an expensive and over-engineered club.

    I note that such a policy has been a roaring success with the live-stock and little boy fanciers with their trademark “hot” Glocks.

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