And so it begins

And so it begins.  Is the end nigh?  Has the process of nationalising superannuation begun?

This morning, Adam Creighton in the Australian reports that Peter Costello has proposed that compulsory worker superannuation contributions be invested by government.

In a speech in Melbourne, the former Treasurer and current chairman of the Future Fund urged the government to “show some interest in managing (super) in a cost-efficient way”

Yes.  Let the government hold and invest your superannuation for you.  The government can invest superannuation into a portfolio of good debt and NBN.  Oh and yes.  An allocation of Gonski also; after all, Gonski 2.0 is about investing in our children.  How about some innovation investment.  The government gets lots of great returns from there also.

Plus the notion of Government doing ANYTHING in a “cost-efficient way” is laughable in its own right.

Some Cats may recall an earlier Sparta-post warning people to be careful what they wished for.  The comments section took me to task.  Well Cats.  What do you think now?  Are you feeling relaxed and comfortable?

Follow I Am Spartacus on Twitter at @Ey_am_Spartacus

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40 Responses to And so it begins

  1. Up The Workers!

    And as is the case with all ‘religions’, the preachers will next assure the peasants that they will receive their dividends in the “NEXT WORLD”.

    Amen.

  2. Entropy

    Costello had a senior’s moment. He should be ashamed.
    The other thing about it, is it is about power and the power money brings. He of course envisaging himself or other like minded person directing this superannuation “investments”.
    The wankers that suggest these things never seem to realise the other mob get to decide about half the time.
    Unless it really is the uniparty against the rest of us./conspiracy

  3. Bigpeteoz

    So we give our money to the Government, so they can give it back to us as a pension, as they see fit.
    Imagine the ALP in charge of the till, Twenty million dollars could arrive each day and by the end of the day there would be no money to distribute.
    Government (and Costello isn’t even there) just needs to get out of our lives.

  4. Bruce of Newcastle

    The next step they will take is to remove the ability to access your superannuation before age 65.
    Then 70.
    By which time they have stolen it all and you won’t receive any of it.

    I was entertained that there’s been a rash of retirements from the public sector in some US states lately, most recently Kentucky.

    Kentucky Pension Crisis Goes Nuclear As Teacher Retirements Surge 64% Over Last Year (Wednesday)

    As Kentucky’s Governor Matt Bevin and legislators attempt to design a pension reform bill that will save the state’s various public pension plans from literally running of cash in “three to five years,” or worse yet bankrupting their state, some teachers and other public employees have decided they’re not going to wait around to negotiate and instead turned in their retirements notices to lock in their current benefit structures.

    As the Carrier-Journal points out today, Kentucky’s Teachers’ Retirement System saw a 64% surge in teacher retirements YoY in the month of September. Meanwhile, system-wide retirements increased a staggering 37.4% in September and are up 23% so far in October.

    Unfortunately for these poor fleeing rodents their action is futile, since they almost certainly get their pension as a pension…not a lump sum. So when the state goes bankrupt they’ll lose it.

    Guys, you should have thought about that one before choosing to work for the government.

  5. struth

    Most stay at home mums could do a better job with the economy than these deluded whack jobs.

    Was it really a feat of brilliance on Costello’s part to leave government with a surplus, or something anyone who has ever had a household or small business budget to live by could do?

    I suggest the latter.

    When surrounded by criminal negligence, basic competence may appear brilliant.

  6. hzhousewife

    So at the moment the big super funds are controlled by the Unions, and that isn’t good, so now Costello wants to switch control to the Government instead. Same diff really.

  7. GP

    Only a few years to go until I can commence drawdown. Looks like the goalposts will have moved by then.

  8. DaveR

    I can see arguments for both sides. Under the current structure, a lot of compulsory worker superannuation goes to industry super funds, many of which are dominated by ex-unionists and ex-labor politicians, resulting in a lot of investment going into left policy assets – such as renewable energy. (See what happens to those fund returns when the RET is inevitably pared back). On the other side, the wise Government super department , under the control of the government of the day, will do the same thing. Which is worse? Costello seems to be focussed on lower costs but does not discuss investment policy.

  9. Norm C

    I think you need to look at what Costello said. His suggestion that the default funds be managed by the Futures Fund is worth considering. The government does not make investment decisions on this. A Board appoints fund managers to do it. Futures fund performs better than most super funds and at lower costs.
    I think it has some potential.
    Profit motive for banks and fee / slush fund for Unions is nuts for these funds. At least the Futures Fund would not be using member money to sponsor a football team! I hope.

    Our super fees are like power prices. Highest in the world.

  10. Malcolm

    It’s a gteat idea and would be in the public interest. People would get higher returns and the unions would hate it

  11. Diogenes

    The government does not make investment decisions on this. A Board appoints fund managers to do it.

    Same as every other superfund in the country.

    I am still looking for an “unethical” superfund that invests in weapons manufacturers, coal/mining and tobacco, and avoids the green schemes.

  12. I am Spartacus

    The government does not make investment decisions on this. A Board appoints fund managers to do it.

    And who appoints the board?

    And who says that a government operated “fund manager” has to have the same governance and investment strategy?

  13. Angus Black

    This is not the first time. We used to pay national insurance for our old age pension until the government decided to sweep it into consolidated revenue and then refuse to pay out on the basis that we have already more money than some poor devil or other. Nice work if they can pull the same scam twice

  14. EvilElvis

    Same as every other superfund in the country.

    I am still looking for an “unethical” superfund that invests in weapons manufacturers, coal/mining and tobacco, and avoids the green schemes.

    Me too!

    The government already has its hands in the till through regulations, laws, rules, subsidies of a myriad of other shit and the continual push of diverse, ethical and environmental frogshit. Simply invest as little in super as you can. It won’t be there when you need it.

  15. OneWorldGovernment

    No wonder the former Liberal Party of Australia is cactus when the former Treasurer can come out and say that The Government will fix it.

    I now understand the rational of selecting so many quisling Liberals.

    Someone should punch him in the mouth.

  16. H B Bear

    Costello had a senior’s moment. He should be ashamed.

    Costello has been pulling hundreds of thousands of dollars a year as Chairman of the Future Fund. He knows exactly what he is doing.

  17. jupes

    And who appoints the board?

    You can imagine some of the clowns who would be appointed.

    Precisely the same hopeless twits who got us into this current mess.

  18. Neil

    Has anybody read the speech. Is what stated what he actually said?

  19. RobK

    I have always believed, from the outset, that compulsory super is fraught with danger of being usurped. This has proven to be correct with schemes like opt out life insurance packages, front loaded and of no use in older age. Union infiltration has guaranteed skimming and buttressing of political philosophies like CAGW. To me the lesser of two evils would have been the model Costello proposes. Better still would be to allow incentives for savings. Leave the money to the earners to manage.

  20. duncanm

    SMSF is the first line of defence.

  21. Econocrat

    Superannuation is the only remaining liquid stock of funds available to the Australian Government. Of course it will be nationalised, then expropriated.

  22. Alex Davidson

    The deception of the rhetoric used by the political class to distract us from their thievery never ceases to amaze me.

    Mr Costello stressed that individuals should have the right to choose their super fund…

    No Peter, individuals should have the right to choose what to do with their own money.

    Another distracting argument over methods and process instead of the real issue, which is the use of force to achieve ends.

  23. Roger

    In a speech in Melbourne, the former Treasurer and current chairman of the Future Fund urged the government to “show some interest in managing (super) in a cost-efficient way”

    You think Super is inefficient now? Wait until the government is managing it.

    There is no problem that government intervention can’t make worse.

  24. harry buttle

    Anyone who didn’t see this coming simply wasn’t paying attention.
    Big spending Govts, ballooning debt, no appetite to cut spending – how else was this going to go?

  25. Rabz

    The next step they will take is to remove the ability to access your superannuation before age 65.
    Then 70.
    By which time they have stolen it all and you won’t receive any of it.

    Yep. I’ve been predicting this ever since Keating set it up.

    The only chance I’ll have of ever seeing any of it will be the “take the money and run” option, which will involve emigrating – and the larcenous pricks will still help themselves to some massive proportion of it should I do that.

    May have to be done just after the green windbag of Wentworth and his goat rodeo are consigned to electoral oblivion and we have Teats Peanuthead and his circus foisted on us.

  26. Rusty of Qld

    Wait until they start to tax the 2 trillion dollar + super pot. It’s not far away and all the political parties will support it. A 1% or 2% tax to start wont have the punters in total revolt then crank it up over the years, will bring in hundreds of billions eventually,

  27. Dr Faustus

    Costello’s argument hinges on ‘efficiency savings’ achieved by having a single fund manager and a large pool to spread the management costs thinly:

    “Those fees could be reduced if that money was pooled; if there was only one default fund making large allocations and using market power to drive down costs.”

    Sounds great in theory (leaving aside the dead hand of government issues), except the size of the pool would mean that funds would necessarily be allocated in very large licks, with the likely result that:

    – There are limited investment opportunities to place large ‘efficient’ blocks of funds – which would make the fund unresponsive and captive to scale rather than return;
    – The pool larger investment opportunities are likely to be found in the infrastructure and bond markets;
    – Any misallocation or investment underperformance would have national impact;
    – The availability of superannuation funds for smaller ‘inefficient’ capital raisings would be restricted – increasing the costs for businesses not on the mega-huge list.

    The net result would be a cheaper fund, but with a return tending towards bond + a modest margin not necessarily related to the risk of the portfolio.
    And a fucked up capital market…

  28. Dr Faustus

    Re: Rusty of Qld’s comment. The likely initial approach will be a 1% or 2% annual ‘levy’ on super balances above (say) $600,000.

    This will dig the Treasury claws into something like 65% of the $2.3 trill – yielding an annual $15 to $30 bn – but annoying only the top 5-10% of the superannuation-invested vote herd. The external optics will be these very wealthy people ‘can afford to pay a bit more’ because fairness (within the party room and/or caucus, they can FOAD because they don’t matter anyhow).

  29. Ez

    Having one, single, government-controlled fund holding super will guarantee no lump sum payments (to the member) and ease the way for super’s transition to becoming an income stream (pension) defined by your fund (the government).

  30. L.B.Loveday

    Singapore’s superannuation scheme, the Central Provident Fund, is government ran, and has contributed to Singapore’s remarkable increase in living standards, health care and home ownership rate (2nd highest in the world).
    Ok, the Australian Government is a far cry from Singapore’s, but proper government management can have great advantages.

  31. Defender of the faith

    Compulsion is the core problem. Costello is quite correct in pointing out that for most people a single fund default would deliver better outcomes from a compulsory scheme.
    I think the arrangements in place are awful and create a whole class of people nipping at the compulsory gflow of money. Net savings for average earners have not been improved by 22 years or so of compulsion. So pension costs are not really being avoided.
    Let’s scrap the whole scheme. If not go with Costello.

  32. Giving government one cent more than they already have any control over is madness. Giving them the keys to the superannuation piggy bank to waste as they see fit would be unmitigated lunacy on a cosmic scale. Costello can just shut up and sit back down and keep his grubby, avaricious hands of other peoples money.

  33. Scriptman

    Costello is probably right that it would be more efficient.

    However, he ignores what would happen when the next Labor/Greens government comes to power. Any change that moves super money closer to government control increases the risk of future governments siphoning off funds or directing investments into their pet projects.

    At least with the amount of protection money that we pay currently in fees to the Super funds we’ve bought ourselves a noisy burglar alarm if the government comes to raid our savings. It’s not much to rely on, but it’s better than what Costello is suggesting.

    Stupidly high fees are better than super getting rolled into consolidated revenue when the next financial crisis hits.

  34. Rusty of Qld

    Reply to Dr Faustus,
    Yeah Doc it will be interesting to wait and see when they bring on a tax grab of superannuation as they surely will, the “blood bank” is there and Dracula is bidding his time.

  35. Crossie

    First John Howard and now Peter Costello. Both should have kept their mouths shut seeing as our current straits are their fault. Costello gave us Turnbull just as much as Howard. If he didn’t throw a hissy fit and storm off in 2007 and instead stayed to lead the party Malcolm would never have been anywhere near power.

  36. Motelier

    The country has been a basket case since Gough decided it’s time.

    Ivwas in short pants then, but I can still remember the events leading up to the dismissal.

    Then the conga line of incompetents continues through to today.

    And never forget, their super is so much better than yours.

  37. clivehoskin

    The closest thing to earthly eternal life, President Ronald Reagan used to say, is a government program.
    That applies to us as well.

  38. simple. The future fund has returned 8% since inception. If only super did as well. To many snouts in the trough,investment advisers or unions.

  39. Neil

    First John Howard and now Peter Costello. Both should have kept their mouths shut seeing as our current straits are their fault. Costello gave us Turnbull just as much as Howard.

    You need to stop blaming politicians and start blaming the people who voted for them. Both Rudd and Turnbull remind me of Palpatine in the Star Wars movies. he fooled everybody until it was too late.

    In 2007 AUSTRALIA voted for Rudd causing most of our current problems and it looks like AUSTRALIA will vote for Shorten at the next election

  40. EB

    At the minimum he’s ensuring voluntary contributions are kept to a minimum. Whatever the contribution incentives in the short term, they’re always outweighed by the legislative risk in the long term.

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