Who needs Khemlani when you have Super

Politicians come and go.  Bureaucrats not so frequently.  Political parties even less so.  Archives never.

Devoid of any intellectual heft, the ALP has delved into the party archives and dusted off Gough Whitlam’s plans for Australia.  Yeah sure they were an abject social and economic failure that still haunt us.  But he never got to finish the implementation.  Those evil Libs and Governor General stopped Gough turning Australia into an icon of South American despotic governance.

But the ALP has not only dusted off Whitlam’s plans, they seem to have also wheeled out a key link to not only Whitlam but also the key piece of “public policy architecture” that will doom us all.  That link, the Hon. Paul J. Keating, who was briefly a Whitlam Government Minister.  PJK never forgives and certainly never forgets.

You will note that PJK could only afford the nice Zegna double breasted suits after a Coalition Government made modest repairs.  Had Whitlam been allowed to implement it all at the time, well then, not only would there not have been the nice suits, there would have unlikely have been the antique clocks.

Now granted TAFKAS is talking about events of the 1970s.  Chances are also that the history departments of Australian schools and universities will have certainly cleared away or at least polished the turd that was the Whitlam Government.  So perhaps all those praying daily to their statue of Gough review his thoughts on Asian immigration and the “Balts“.  But notwithstanding.

But for those who have the memory and those who weren’t there but have chosen to learn about it, Whitlam decimated the economy including by increasing Commonwealth Government spending from around 15% of GDP to around 20% of GDP – a 33% increase.  A rate of increase in government spending that Kevin Rudd, Julia Gillard and Wayne Swan could only dream about.  Whitlam also tried to nationalise the Australian mining industry, kinda sorta what Swanny tried to do in a nice way with his mining tax.

And having sent the Commonwealth Treasury to the wall, unable to borrow from the normal places, these paragons of public finance went to a dodgy Pakistani “banker” named Tirath Khemlani to get some dosh.

But who needs Khemlani to lend you money when there is the giant glowing and throbbing pile of money sitting there called Superannuation.  You know that pile of superannuation money that Paul Keating, in very nice tailored suit, constantly reminds us all was his baby.  Yes.  That fat and lazy baby that is the most inefficient in the world clipping whopping fees and feeding the financial industrial complex.  Did TAFKAS mention that PJK was a director of Lazard Australia and is a director of:

MaxCap group, which specialises in commercial real estate debt, recently teamed up with the nation’s biggest industry super fund, Australian Super, to offer large $100 million-plus loans direct to developers.

(Yep.  Australian Super.  That was a team with $140 billion Australian Super.)

Ahh super.  That big pot of money waiting for a broke government to raid.  Or is that raid once more and for good.

So let’s get back on track.  The current ALP has proposed a tax and spend plan that would put Whitlam to shame.  A plan to which both Whitlam and Rudd would note:

Today, I am saying loud and clear that this sort of reckless spending must stop.

There is absolute certainty that they will spend what they promise.  Less certain however is that that will be able to raise the taxes necessary to meet the spending.  Even if their tax plans get unaltered through the senate, collectively pulling out all that money will significantly damage the economy.  This will not only decimate tax revenue but will also jack up spending through unemployment benefits and other welfare; those automatic stabilizers you know.

And so when the Commonwealth is broke, the credit rating is gone, and there is nowhere left to go …. they will just take all the superannuation money and give back an IOU.

It won’t be the first time a broke state has confiscated private wealth and it won’t be the last.

American bank robber Willie Sutton was once asked why he robbed banks.  His reply:

That’s Where the Money Is.

And superannuation – That’s Where the Money Is.

But superannuation in lots of self managed super accounts is really hard to confiscate.  If its all in a couple of big and cooperative funds, you know like Industry Super, its much easier to grab.

Perhaps you think about that when you think that it is both the Liberals and Labor (but particularly Labor), and the bureaucrats that advise them, who are making it really unattractive to have a self managed super accounts.  They want all the money in a couple of places to make it easier to grab.

So thanks Paul and thanks ScoMo.

It would have been more honest for the whole 9.5% to have gone to the government in the first place.  But they would have spent it all anyway and tried to grab some other private assets.

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19 Responses to Who needs Khemlani when you have Super

  1. stackja

    Wheeler warned Gough.

  2. feelthebern

    I’ve already posted about my physical reaction when looking at my smsf.

  3. TBH

    It’s been my big beef with super for a long time: the government of the day won’t be able to resist raiding those accounts, either brazenly or by stealth and as someone who has at least 20 before I can get my hands on it, there isn’t anything I can do about it.

  4. feelthebern

    That’s loser talk TBH.

  5. RobK

    It would have been more honest for the whole 9.5% to have gone to the government in the first place.  But they would have spent it all anyway and tried to grab some other private assets.
    This was my argument in the first place regarding compulsory super. Ticket clippers, where they must exist, should be under the direct responsibility of the government. It wouldn’t help a lot in over all outcome but at least it’s in the voter’s domain.
    A simple savings incentive such as deferred or low tax on interest would have sufficed.

  6. RobK

    That’s loser talk TBH.
    The risk is none the less real.

  7. thefrollickingmole

    For those who bleat “It cant happen”…

    The Australian government has legislation “retired” at the moment which could confiscate gold.
    Super wont even have that much protection once a suitable “crisis” is manufactured because we need the money to save the schoolshopitalskidsgreatbarrierreeflessermouldydildo…etc etc.

    And the equalidee.

  8. Natural Instinct

    10 March 1960
    Mr Killen

    We have a new Deputy Leader of the Opposition, and I would like to say again to the honorable member for Werriwa (Mr. Whitlam ) that he has my best wishes in his new-found position.
    He brings to this Parliament a fresh and encouraging intellect, and also a capacity to indulge, on occasions, in sensible debate. But again, like his leader, he has a deep ambition for many things. Before criticizing – and I do not in the broad sense of the word criticize – the honorable gentleman, I draw the attention of the House to one of the newfound ideas of the new Deputy Leader of the Opposition, and that is that he claims he can guide the economy of this country.
    The honorable member, in Sydney, a few weeks ago, said that what is needed in this country is not nationalization – he was a little too shrewd to be so blunt in his observations – but that we must guide the national economy.
    Then he went to Brisbane, but again, with almost instinctive shrewdness, he was not to be drawn into making possibly embarrassing comment as regards his party’s intentions. Oh no! He said again that Labour was going to guide the nation’s economy.

    Mr Whitlam, a little later

    The right honorable gentleman chose the subject of inflation. Over the last month, there has been a very deliberate campaign by him and his senior Ministers on this theme of inflation….
    We countered and exposed your arguments. The subject of inflation came up when the Australian Council of Trade Unions applied to the Commonwealth Conciliation and Arbitration Commission, as it has to nowadays, for an increase in the basic wage, and there has been a most improper campaign in an attempt to bring pressure to bear on the commission … The Arbitration Commission, Sir, has heard arguments on all these subjects. It has heard the Commonwealth; it has heard the States; it has heard the employers bring up all these arguments before it. It heard them do so only last year. It rejected those arguments and it gave reasons for rejecting them. This argument that wage increases would bring about price increases was put to the commission, which heard all the arguments, rejected them and gave reasons for the rejections.

    I suppose he is entitled to make remarks like that here. He has made them elsewhere. Five weeks ago, at the summer school held in Canberra by the Australian Institute of Political Science, I heard him come out with the amazing illogicality that the increasing of margins was madness and that the pegging of profits was doctrinaire. Well, I quote two such foolish statements on this subject made by the Commonwealth Arbitration Commission itself. The commission said –
    Considering those aggregate profits, and bearing in mind the other material which is before us, we feel that the position of companies is such that they are able to bear increases in award wages.
    The commission then proceeded to say –

    We are aware that in the past increases in wages have led to increases in prices, and we believe that in some cases increases in wages have been used as an excuse for increasing prices when these could have been avoided.

    Bill will pick up Mr Whitlam’s baton and guide the economy, and thus we will be safe.

  9. Inflation everywhere is always a monetary phenomenon.

  10. Rabid Koala

    I’ve already posted about my physical reaction when looking at my smsf.

    I missed that. Could you post it again. I have been thinking about self managing my super after reading this. I am younger than TBH and have longer to worry about the government stealing super. I don’t expect them to do it outright but instead keep raising the eligible age and taking more and more as a tax on wealth etc

  11. TBH

    That’s loser talk TBH.

    Maybe, but I’d be interested in hearing a strategy to mitigate the risk.

  12. Rusty of Qld

    Said it before, they will bring in a low tax 0.5%,1% or 2% on the entire super pot to start with. Make up some bullshit excuse about cost of monitoring the Trillions of dollars to make sure the workers, mums and dads money is safe and being properly looked after. Then when it’s all bedded down and accepted as part of the taxing landscape a slow and gradual increase in the tax will take place. Rivers of gold flowing forth just like magic.

  13. John Bayley

    Superannuation is already quite heavily taxed.
    Low income earners, who have access to the tax free threshold, do not get that for their compulsory super contributions – the flat rate is always 15%.
    High income earners pay 30%.
    Once the money is in the fund, any earnings are taxed at a further 15%.
    When you retire after 60, and should you have invested wisely so you have more than $1.6M in the pot, another 15% for you!
    So no, it is not a ‘concession’ in any meaningful sense. Especially so considering it is OUR money and we are denied access to it for many years, even decades for a lot of younger people.
    I suppose however that in the interest of ‘fairness’ (ha!) it needs to be said that ANYTHING can be stolen by the government, not just super.
    Look at Shorten’s franking credit grab, look at the discretionary trust 30% minimum tax grab, the ‘deficit levy’ 2% extra grab (as if 47% were not enough!) as just a few current examples.
    The system will first have to collapse before anything will change.

  14. Pyrmonter

    @ Frank

    The ‘wage push’ theory of inflation (which doesn’t necessarily deny a monetary element – essentially, money is loosened to ‘ratify’ the increase in the price level, lest real GDP fall) had origins on the ‘right’:

    https://mises-media.s3.amazonaws.com/Inflation%20Its%20Cause%20and%20Cure_3.pdf

  15. Spall

    Oh dear, time to get out of my industry fund and set up an SMSF. More forms to fill.

  16. Cool stuff Pyrmonter, thanks.

    Superannuation is already quite heavily taxed.

    It was designed that way. As a tax honeypot.

    Why anyone likes it after learning enough about its origins, is quite baffling.

  17. Bad Samaritan

    Forget all this f’ing around. Anyone who is genuinely worried about Labor must do something to protect their assets; their wealth….now.

    All institutions can be taken over; financial, or otherwise . All accounts etc can be frozen. All assets can be confiscated, if they can be seen or found.. This means it is time to put your assets where they cannot be (easily) found, and then taken; not just whine about how they will be found, and then taken.

    Any suggestions as to how best to put as much as possible out of harm’s way?

  18. John Constantine

    Financial security comes from transgendering your kids and getting them good quota jobs in regulation and compliance.

    Preferably in the public service.

    Not too late to build an online left wing identity like all the crony business class do, publicly bidding at labor fundraising dinners for goughs old footy socks is a good investment.

    The sondercommandos are the last ones into the showers.

    Comrades.

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