The biggest, heaviest, fattest elephant was in the Royal Commission hearing room. But sadly, it was not seen or named.
The most offensive and egregious behaviours that were identified by the Hayne Royal Commission happen in other countries and other jurisdictions. The ones related to financial planning and wealth management. But why is it that they are systemic and institutional in Australia? Why was that question not asked or considered?
Because it would challenge faith in the biggest economic sham in Australia, bigger than the need for Australia to commit economic suicide by, independently of any other country, ratcheting up the cost of energy. That economic sham being compulsory superannuation. Not superannuation, but compulsory superannuation.
As was eloquently written this morning in the Oz by Judith Sloan and equally eloquently written previously by Adam Creighton, the costs of compulsory superannuation exceeds the benefits. Especially for low income workers. Paul Keating can bleat and blubber all he likes. The evidence is not on his side. So much for fact based policy.
But for as long as you have a sector of the economy that benefits directly or indirectly from the giant flows of super monies, no matter how badly they perform, no matter how badly they behave, no matter how poorly they treat their customers, then you get what you paid for.
Sprinkle in a regulatory regime designed to create a compliance state, the Australian Financial Services Licence regime (thank you Mr Howard, Mr Costello and Mr Hockey – Financial Services Reform Act of 2001) and you get an industry that is disconnected from its customers benefiting from a licencing regime that provides a false halo as to both the quality of the service provider and the ability of the regulator to oversee it. And again, you get what you paid for.
Compulsory superannuation plus financial services licencing has delivered an industry with HUGE HUGE HUGE returns to scale and guaranteed business flows, requiring amongst other things, independent financial planners to consolidate thus creating distance between customers and executives (see bank case studies). None of the bank executives or director actually had to lower themselves to look into the eyes of the people from whom they were stealing.
Much like the global financial crisis, those with a bias to state intervention and regulatory reaction will blame the market and capitalism for this mess. And much like the global financial crisis, they will be wrong because this mess was created by poorly designed and poorly implemented regulation. Regulation that has not benefited customers and investors, but has benefited the armies of accountants, lawyers, compliance officers and regulators. Not to mention the tax collectors and and not to mention the lower quality end of the financial planning industry who, without compulsory superannuation would otherwise be selling used cars. Or running for parliament.