What a moron. A super-moron.

Writing in the Australian today, opposition Treasury spokesman Jim Chalmers said this:

Already the $2.8 trillion pool of savings is bigger than our gross domestic product, and bigger than the GDP of all but seven countries, just behind India but bigger than Italy and growing fast.

Much of that wouldn’t exist without compulsion, but remarkably it’s still not enough.

Much of the compulsory superannuation pool would not exist without compulsion.  Now that’s an insight.

Hey Jim.  The $2.8 trillion pool would be even bigger if the compulsory level was 100% of salaries.

Rather than having some sort of measuring competition to argue that the Australian superannuation pool is bigger than whatever, why not try to explain why it is good?  If you want to compare sizes, perhaps you start comparing the size of the superannuation pool with the cumulative size of ALP budget deficits.

One of the key questions that was not asked at the Hayne Royal Commission is why. The behaviours identified at the royal commission occur in other countries. But why are these behaviours institutional and systemic in Australia.

Could it be that one of the key drivers of misbehaviour is compulsory superannuation because for as long as a business or business segment is guaranteed revenue flow irrespective of the quality of its product and irrespective of how it treats its customers it will not be concerned with its quality or its customers.

If after all these years the superannuation industry cannot convince citizens to invest, even with all the incentives on offer, then there is something fundamentally wrong with the offering dear Jim.

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16 Responses to What a moron. A super-moron.

  1. stackja

    Paul Keating’s gift keeps on giving to some, but not others it seems.

  2. Karabar

    Stupid is as stupid does.
    Forrest Gump

  3. BorisG

    I think it is good because it reduces the need to spend welfare money on the elderly. It treats adults as kids, but many Australians are, aren’t they?

  4. Fisky

    I think it is good because it reduces the need to spend welfare money on the elderly. It treats adults as kids, but many Australians are, aren’t they?

    But the superannuation system is actually a net cost to the government.

  5. Tim Neilson

    I think it is good because it reduces the need to spend welfare money on the elderly.

    To some extent, presumably.

    That is, there are presumably some people who nowadays live as self-funded retirees who would have been welfare recipients if it weren’t for compulsory superannuation.

    But for ordinary wage earners that’s not the case. They’ll never save enough to stay off the pension unless the super rate is increased to way above it’s current level. When they retire their first logical financial planning step would be to get their net assets down to pension level – e.g. holidays, renovate the home, etc, then head off to Centrelink.

    But the system is designed to force those people to go without money during their working life so that industry super fund spivs can rake off their take. Those trustee/directors’ fees won’t pay themselves you know.

  6. Rusty of Qld

    Chalmers perfectly fits my old dads quote ” a highly educated idiot”. The superannuation scam is not run for the benefit of the punters. The unions get a nice big earner, the super industries get a nice big earner and the Government gets a nice big pot of money to fall back on, a nice big pot that will be taxed further and further.

  7. RobK

    I think it would be better to encourage savings generally. A product aimed at retirement that sterilises an individuals use of money is suitable for some but is by no means a panacea. The trend to over regulate continues unabated, in the favour of management of those funds and the unwarranted power it transfers.

  8. RobK

    As an example of unwarranted power, I see superfund uptake of renewables as a political step to bind the commitment to climate change policy .

  9. Kurt

    Charmless is surely eyeing a post politics career as a director of some industry super funds. That ought to provide a nice supplement to his parliamentary pension. Should cover the cost of a run about of a trip to Europe every second year or so. He wouldn’t want to find himself in the same situation as Barnaby. Butchering his own meat just wouldn’t be his style.

  10. BoyfromTottenham

    Tim N – I agree, but has anyone done any real research into the actual net returns from super at retirement across members’ income levels, to determine whether low income earners are getting fair value from this forced saving regime? The high incidence of low income workers having multiple super accounts, each charging flat membership fees, insurance, etc. must lower their returns. And that is before they decide which ‘investment option’ to choose. The last time I looked 50% of member’s accumulation account (i.e. pre-retirement) funds at one large super fund were invested in the ‘Balanced’ option, with very little in options with far higher returns.
    And of course a rational person faced with the choice between having just a bit too much in super to qualify for the age pension and spending a few thousand on renovations or a big holiday to qualify for a no-risk, indexed pension would almost certainly take the latter. Recent government changes to the asset thresholds have only made this problem worse. These chickens will come home to roost!

  11. max

    Super Lining fund managers’ pockets
    Adam Bragg is one of the few people calling a spade a spade
    ‘Superannuation is a classic case of vested interests triumphing over the national interest. Super has made the unions, banks and insurers richer than ever.
    ‘The fees are too high, there is not enough competition. There is insufficient transparency.’

    ‘I do not believe the system is working for Australians. Certainly the case has not been made for ever bigger super.
    ‘The last Intergenerational Report showed around 80 per cent of people will still be reliant on a public pension by 2055.This is not good enough after 70 years of compulsory super.’

    Then he cited research from the Grattan Institute, saying that Aussie households spend $30 billion on super fees and $23 billion a year on energy costs.
    That’s right. It costs more to have a super account than it does to run your home.

    A multitrillion-dollar sector (let that sink in) has grown fat on bloated easy money that we are forced to send their way.
    We don’t have a say in it. And worse, incremental compulsory superannuation increases via legislation forces more of our money into this parasitic industry.
    Compulsory superannuation robs us of the choice of how we spend our money now. Instead, that power is handed over to fund managers, and then it becomes their decision on how your money should be invested.

    https://www.dailyreckoning.com.au/super-lining-fund-managers-pockets/2019/07/25/

  12. Peter Greagg

    Jim needs to explain/justify why the Government needs to compel wage earners to save more than they would choose otherwise.

    He is just a typical leftist with totalitarian urges he can never resist.

  13. miltonf

    Dr Chalmers to you PG.

  14. Peter Greagg

    OK, Dr Chalmers (for a doctor he is of some type of social studies), you need to justify your suggested coercion etc.

  15. Empire 5:5

    Compulsory superannuation is a defacto price control on labour and therefore a crime against humanity.

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