The government doesn’t pay your super

Paul Howes had an extended op-ed in the AFR Review on Friday talking about compulsory Super. In it he relates this anecdote:

I can’t recall the member’s name, but she was a middle-aged woman who just started working part-time in an automotive components plant in western Sydney. She was confused and irate about her boss withholding a section of her wages. She was certain it must be a mistake.

We talked it out and it became clear that her problem was her compulsory superannuation contribution. I told her that was actually fine and legitimate. She was not reassured. 

“No, the government pays my superannuation,” she said. “It can’t be up to my boss to take money out from my wages without asking me.”

No, I explained, that was exactly how it worked.

I think a lot of people still think that – certainly a lot of people got that impression during the 2010 mining tax debate that included increasing Super contributions.

What I don’t understand, however, is why the current government doesn’t make more of the fact that ALP anti-business sentiment and policy is undermining the retirement incomes of those millions of Australians that have a large chunk of their life savings tied up in Super.

Also read the Howes op-ed – he has come a long long way since joining the corporate world.

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42 Responses to The government doesn’t pay your super

  1. Nathan

    Nope, he remains a slimeball.

  2. Dr Fred Lenin

    Tgegvernmen doesnt pay anthing ,the Taxayer pays for everything . The only money governments has comes from taxes imposed on productive workers. Governments are leeches ,so are politicians and political aparatchiks .

  3. The government doesn’t pay your super, but as I understand it, technically they own it.

  4. Waz

    Thanks for raising this Sinc………. well the last bit about workers having their retirement savings invested in companies. What really cr*ps me off is that Labor is always banging on about giving cuts to the “Big End of Town” whilst cutting penalty rates, pay rates, attacking unions, reducing workers conditions etc etc etc etc. Yet you never hear the coalition saying actually, the way it works these days is that the workers actually are the major owners of most large businesses recently denied tax cuts!!!! Through their super holdings, the funds that they invest in, and which they rely on for returns are the one and same “Big End of Town”…..go figure. It’s an obvious counter point that is never made; WHY????

  5. Botswana O'Hooligan

    Dr F Lenin
    And you forgot to add, so is that bastard Howes!!!

  6. Cynic of Ayr

    Oh don’t be surprised.
    There are hundreds, more like thousands out there, who sincerely believe that the money the Government spends is “Government Money” not money from the population. Certainly not “their” own money.
    My Boss had a bit of a smoko time discussion with a couple of his employees, down the remuneration ladder a bit. Great blokes! Conscientious workers cheerfully doing a job that none of the higher remuneration mob would have a go at.
    Anyway, it came to Government spending and the boss said he was a bit shitty that the Government wasted so much money – a very legitimate and accurate statement in itself.
    The reply was that it didn’t matter, as it was “Government Money.” Boss said it was their money, from their taxes. No, no, no, it’s “Government Money.”
    The conversation sorta died as the Boss wasn’t a stand over sort of bloke, and if the fellers were happy with that thought, who was he to argue?
    The thing is, I would guess that 90% of the taxpayers really don’t care about Government waste. Oh they get a tad annoyed when Bronnie spends 50 Big Ones on a helicopter ride, but what the heck. It’s only 50.
    The trouble is, that little 50 is only the tip of the iceberg. A brief visit to Parliament House tells anyone that!

  7. Ray

    The Government forces you to contribute to superannuation, then prevents you from touching your own money, taxes those investments year after year, colludes to ensure that large fees are paid to support the union mates who control industry super funds and then readily change the rules when there is a political advantage for themselves. However, it is all OK since the Government doesn’t control your super.

  8. Tim Neilson

    Super for lower paid workers does little if anything to provide them with a secure retirement. None of them will ever save enough to be self reliant. The headline rationale of “helping the workers” has always been a crock.

    The secondary rationale, never trumpeted too loud, has always been to reduce the lower paid workers’ reliance on welfare “entitlements”.

    If that works, then they’re getting little value for money from the super. If it doesn’t work (e.g. they take a lump sum and blow it then go on the pension) it hasn’t done much to improve their standard of living in retirement anyway.

    The real motivation is of course to put as much money as possible under the control of union controlled super funds, to be “invested” in taxpayer underwritten green projects built at colossal costs because of union rakeoffs.

  9. stackja

    MT lacks agility regarding ALP.

  10. Glynn

    Don’t forget the influence of his now wife, who fronted the media every day prosecuting the case for Qantas against the unions, when the airline was shut down due to ongoing industrial action.

  11. Up The Workers!

    Once upon a time, if you had told me that Piggy Howes had uttered those words, I might have said:

    “Pigs Might Fly!”

    It seems now that Piggy has indeed flown, and has been flying ever since he married Olivia from Qantas, two years ago.

    I wonder if Alan Joyce can fix Sally McManus from the A.C.T.U. up with a spouse, as well? She might change her views on the desirability of law-breaking whenever the mood strikes

  12. Neil

    And Super is not working. Apparently what some people are doing is cashing out their Super upon retirement, buying a nicer home then going on the pension anyway. It would be nice to know how many people stop getting the Pension because of Super because that is the aim.

  13. john constantine

    Moving from crony socialism to crony capitalism isn’t really that big a move.

  14. John constantine

    Piggy still a better prime minister than the one taking us over the cliff right now.

  15. EvilElvis

    It’s government money.
    Government pays for super.
    SSM is about equality.
    Renewables are base load power sources.

    The list goes on. Drop a hint of fact and reality into a conversation with nearly anyone on the street and their eyes just roll back in their heads. They don’t want to think, they just like being told how it all works and gobble it up readily.

    Australia, the thick country.

    PS, has Piggy really seen the light or is he just following his employees mantra? Or maybe he’s just pussy whipped?

  16. Splatacrobat

    Funny how a flip occurs when people from one side of politics or the other suddenly change one coat for another once they leave.
    Feel free to add names to the list of Damascus conversions in both directions.

    Towards Damascus:
    Gary Johns
    Keith De Lacy
    Mark Latham
    Martin Ferguson

    Towards Jerusalem:
    Malcolm Fraser
    John Hewson
    Malcolm Turnbull

  17. Bruce in WA

    And Super is not working. Apparently what some people are doing is cashing out their Super upon retirement, buying a nicer home then going on the pension anyway. It would be nice to know how many people stop getting the Pension because of Super because that is the aim.

    We get nothing, by design. I told my wife that I wanted absolutely SFA to do with the odious Centrelink and the entire pension system and we tailored our living/saving to suit that.

  18. Andrew

    Reminder – we encourage comment from the likes of Marxist scum mOron who exists in an echo chamber of exactly these window-licking ignorami.

  19. H B Bear

    Moving from crony socialism to crony capitalism isn’t really that big a move.

    Yep. Sounds like Piggy has decided he doesn’t need to do a stretch in Canberra before following bruvvers Hawke and Keating in filling your boots peddling influence and opening doors.

  20. BoyfromTottenham

    Bruce, I totally agree. the way I think think about this is that folk in our current Superannuation system tend to fall into three categories – those at the left hand end of the income / wealth spectrum who will never earn enough to accumulate enough super to avoid dependence on the Aged Pension, those at the right hand end of the income / wealth spectrum who earn too much to ever qualify for an Aged Pension, and the folk in the middle who can arrange their affairs either way, depending on their personal preference – dependence on government or independence from government. This of course is generally related to their political persuasion, but should instead be a simple rational decision. However I’m not sure that Trumbull and his Cabinet understands this simple concept, judging by the recent changes to Aged Pension eligibility rules which have significantly narrowed the middle ‘grey area’ on the income / wealth spectrum, and IMO significantly increasing the number of folk that will logically fall into the left-hand end of the spectrum (and therefore likewise increasing the number of claims for the Aged Pension), rather than the opposite outcome that one would expect from a ‘Liberal’ government. Perhaps more importantly for policymakers, the narrower that the middle part of the spectrum becomes, the larger will be the likely effect of any future changes to Aged Pension eligibility (and vice-versa), making budget projections more uncertain. I watch with interest.

  21. Diogenes

    yeh, nah, yer

    But not for the reasons she thinks…

    Technically govt can be said to partially pay your super, as
    1. it is tax foregone, remember the L. A.W. tax cuts are the foundation of it.
    2. the mechanism that makes super kosher constitutionally means the employers pays the money into your super & reports same to the ATO, the ATO then raises a credit on the employer’s tax account in consolidated revenue , and then debits from consolidated revenue the same amount meaning the amount paid into super satisfies the employer’s tax requirement and money(not cash) “passes” through consolidated revenue.
    3. The next time some pollie carries on about taxes on taxes, perhaps they should be reminded of the 15% tax on the 9.5% super ‘levy’

  22. Diogenes

    . However I’m not sure that Trumbull and his Cabinet understands this simple concept, judging by the recent changes to Aged Pension eligibility rules which have significantly narrowed the middle ‘grey area’ on the income / wealth spectrum, and IMO significantly increasing the number of folk that will logically fall into the left-hand end of the spectrum

    Well said. In August I turn 58, in October my mortgage will be discharged and I will have @2k a month freed up. My current compulsory super contributions are around 9K a year, meaning I will be smacked around with extra taxes should I exceed 25K in contributions – I will actually be in a position to increase my contributions to 34k+ annually but will be prevented from doing so – given I have about 10 years left, my current balance + 34k+ annually + earnings should see me self sufficient for at least 10 years.

    I now have no incentive to add 1 red cent to my super. We will use our ‘savings’ to “retire” now (ie between 2 * newstart + 1 day a fortnight on average casual work which I will have no trouble getting + savings on transport + concessions ) and be no worse off than today. Because of our ages we do not even have to pretend to look for work & can easily meet our mutual obligation (Mrs D already volunteers 2 days a week, and I would like to become a member of a nearby railway museum & volunteer for them – my causal work gets counted as well). The current super will be withdrawn and “gambled away in the pokies” (ie withdrawn from the bank in lumps between 1 and 5k a day and stuffed under the mattress)

    Sooo in short , instead of being a productively employed taxpayer for the next 10 years, and then self sufficient for 10 years after that, I will be a burden on the commonwealth for the rest of my days. There are many of my colleagues in the same position and are considering teh same

  23. I read that piece by Paul Howes and I too thought it was a major improvement. It inspired me to put a new piece up on my blog on the topic of compulsory super.

  24. the sting

    As I recall when compulsory super was being talked about with great agreement and delight at a conference in Canberra,the then President of the National Farmers Federation [Graeme Blight ?? ] rose and asked this question ” hands up anyone present here today who writes their own pay cheque ? ”. His was the only hand.

  25. Cary

    How do you chose between two super funds you’re a member of when you want to combine the $ into one (as permitted)? Are the charges the only real comparison?

  26. mh

    What I don’t understand, however, is why the current government doesn’t make more of the fact that ALP anti-business sentiment and policy is undermining the retirement incomes of those millions of Australians that have a large chunk of their life savings tied up in Super.

    I think Scott Morrison has done enough himself to undermine confidence in the Superannuation system. Hence people are investing in residential property, not super.

  27. Chase

    ​It is frightening that ​the basic principles of a​ scheme ​(SG contributions) ​which has been in place in this country for 25 years is not understood by the general population.

    ​It certainly brings the ​education system into question.

    Alas, another fine demonstration of the well executed plan of systematically dumbing​-​down the general population.

  28. Mundi

    The real point of super is to retain social control of investment, and keep people in poverty.

    Labor literally want cpi only pay increases, and if there is overall productivity improvements, then super rates should go up, all the way to 18% if necessary.

  29. NewChum

    How do you chose between two super funds you’re a member of when you want to combine the $ into one (as permitted)? Are the charges the only real comparison?

    Seek not the Internet on matters of investment advice. There be dragons.

  30. Cannibal

    The real point of super is to retain social control of investment, and keep fund managers and board members in the manner to which they are accustomed people in poverty.

    Hence the continuing war on SMSF.

    In the article Howes talks of only temporarily confiscating a percentage of wages. The tax on super going in and on withdrawal would put the lie to this.

  31. Wayneof Perth

    The employer pays not the employee so why did she think it was coming out of her wages?

  32. Botswana O'Hooligan

    New Chum, I changed my Q Super into our self managed one a month or so ago without any trouble, just contact the mob you want to dispense with, ask for a form to transfer your super and they should send you the correct form that gives a few options. They might ask questions but ignore them because it is none of their bloody business.

  33. Defender of the faith

    Howes would be very well aware of the effect of compulsory super. It is clearly not good for low income people whose principal savings asset is a home. It forces people to put 10 per cent of the pay into funds that are predominately invested in Australia equities. If it wa designed for pension offset the compelled funds would go into a low cost index fund. But it’s not designed for pensions. It’s designed for the proliferation of super fund jobs and especially for the industry funds. Sooner or later it will be a scandal.

  34. Habib

    Still a stupid fat git in my book. Only looks less than he really is in comparison to the frightbat now in his pew.

  35. Habib

    Splatty, Fraser hust went senile, but was always a pompous pillock who did nothing to repeal any of Whitlam’s idiocies, which indicates that even then he was a Manchurian marxist. No turning whatsoever by Hewson or Lord Waffleworth.

  36. .

    “The government” doesn’t pay for anything. We pay for the government. Never let this important syntactical difference go. It is not trivial. The mindset of “government pays” sadly leads to a perception of the government requiring no taxes to fund it to low information voters.

    Don’t forget French CJ lled the High Court to shamefully declare our superannuation as tax, therefore it can be confiscated rather easily.

  37. Defender of the faith
    #2344444, posted on April 3, 2017 at 7:37 pm
    It’s designed for the proliferation of super fund jobs and especially for the industry funds. Sooner or later it will be a scandal.

    Beattie and Reith (McGoran i/l of Reith) on Sky just now talked about the scandal of super fund fees. They interviewed Adam Creighton who has analysed the $20 billion of fees that the funds generate each year:

    Funds charge a range of 0.4% to 4%.
    Little ease of access to info about fees.
    Denying equity for fund members.
    Prevents retirement incomes building and then substituting for the age pension.
    There has been very little change to the % of 65 year olds accessing the age pension.

    Creighton’s best line – Keeping super a policy dog’s breakfast ensures a pig’s lunch for financial services

  38. Amused

    Botswana O’Hooligan
    #2344226, posted on April 3, 2017 at 4:10 pm
    They might ask questions but ignore them because it is none of their bloody business.

    Whenever a super fund asks why you are leaving, the answer should always be because of the amount the fund is investing in renewable energy! 😀

  39. Waz

    Every single person is entitled to open a SMSF (these are limited to 4 members). It’s cheap to do and maintain using a suburban accountant. The annual audit is only a couple of hundred bucks. The government provides legislation to make this the case and anybody with half a brain uses it. If you don’t have one, don’t complain about the fees you pay as that is YOUR choice; you don’t have to pay those fees. There is actually a sense of ownership in operating the fund’s bank accounts and investments and of course if you really NEED the money early due to hardship circumstances you (as trustee or your family company as trustee) get to decide if you pass the legislated tests. You just need to document your decision.
    THE SYSTEM IS ACTUALLY PRETTY GOOD AND NOT AS COMPLICATED AS MANY CLAIM; THERE ARE A LOT QUICK ACCURATE GUIDES OUT THERE.

  40. Jim from Qld

    BoyfromTottenham and Diogenes, Xyz did a breakdown of what you are describing:

    http://www.xyz.net.au/making-virtue-profligacy/

  41. yarpos

    “The next time some pollie carries on about taxes on taxes, perhaps they should be reminded of the 15% tax on the 9.5% super ‘levy’”

    I think thats 15% on the earnings created by the 9.5% actually.

  42. cynical1

    Connections maketh the man.

    Howes would have a hard time climbing the corporate ladder otherwise, having left
    school half way through year nine.

    Not even qualified to flip burgers…

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