He’s Alive!

FOR some time I’ve been concerned about the well-being – and, indeed, whereabouts – of former Treasurer and short-term prime minister Paul Keating. China’s most dedicated and aggressive spokesman was last seen at a strategic forum in Sydney in November. The speech he gave that day – hyping the claims of China to a place of respect in the world’s affairs and Australia’s affections – hasn’t aged well. Eight months on, today he spoke at another forum but stayed on safer – though (for him) equally well-trodden – ground:

Paul Keating has slammed the Morrison Government scheme that allows Aussies to dip into their super, saying “baby-faced Liberals” were seeking to unravel the $3 trillion retirement savings pool.

Speaking to at an Industry Super Australia forum, the former Labor prime minister said the lack of scrutiny over whether people were eligible to withdraw payments would leave younger low-income workers with little to no retirement savings.

Mr Keating said government payments should have taken priority over opening the flood gates to the savings pool, which has already been drained of about $32 billion from coronavirus hardship claims…

“There has been no scrutiny on the reasons for the withdrawals,” Mr Keating said.

“The national response should have been a fiscal policy response — not the burden of the income support and maintenance of living standards coming from people’s long-term retirement savings.”

I’m not sure how big the rock is that germaphobe Mr Keating has been hiding under for the past 30+ weeks but many thousands of people have had extremely understandable reasons for accessing these funds. I will leave it to one of the site’s excellent finance experts to decide if even more budgetary liberality now is better than more reliance on pensions thirty years hence. As a general principle, however, when asked about this last week, Scott Morrison (!) said it best: “It’s their money.”

This entry was posted in Budget, Economics and economy, Superannuation. Bookmark the permalink.

22 Responses to He’s Alive!

  1. Tim Neilson

    As a general principle, however, when asked about this last week, Scott Morrison (!) said it best: “It’s their money.”

    For all ScoMo’s faults, occasionally there’s a synapse in his brain tissue.

  2. David Brewer

    Just a quibble – I wouldn’t call Keating a “short-term prime minister”, given that he served considerably longer (4 years, 3 months) than any of Rudd, Gillard, Abbott, Turnbull or Morrison so far. And that’s not counting any earlier period in which he claims to have been running the country because Hawke was so out of it…

  3. egg_

    Speaking to at an Industry Super Australia forum, the former Labor prime minister said the lack of scrutiny over whether people were eligible to withdraw payments would leave younger low-income workers with little to no retirement savings.

    Rich irony, when future generations are saddled with a needless debt burden and even New Zealand is commiserating.

  4. Neil

    I am not sure Super is working. Apparently lots of people are spending their Super and then going on the pension. You can have $280K in the bank, own your own home and still get a full pension

  5. H B Bear

    I hope they paid Keating well. Unions no longer needed members to make money. Just like the ALP.

    Keating’s “legacy”. We just pay for it.

  6. H B Bear

    Australians having the use of their own money has always been a problem for the Liars.

  7. MPH

    Rich irony, when future generations are saddled with a needless debt burden and even New Zealand is commiserating.

    That’s in conjunction with the record youth unemployment, lack of income has had a far bigger impact on super balances than withdrawals. Don’t forget the most generous super tax benefits are long gone, and what remains is received by the old and not the young.

    Maybe he’s got an agenda, a particular constituency he is a part of (a ‘generation’ even), who can’t continue to benefit disproportionately from the Super/pension Ponzi scheme without scamming the young into participating…

  8. Chris M

    I heard ages ago he picked up HIV, but not sure was that just a rumour? Didn’t look too healthy for years now. He certainly did a stellar job of destroying many thousands of Australians livelihoods and ruining their futures.

  9. JC

    Didn’t look too healthy for years now.

    It’s called old age, Chris.

  10. nb

    China Keating.
    Summer snow, Beijing. Displeasure of heaven.
    Crossroads with JOSHUA PHILIPP: Alarming Disasters and Extreme Weather in China; Viral Corn Video Raises Food Concerns
    Meanwhile Victorians locked down by China’s ALP friends. China’s viral export.

  11. NoFixedAddress

    Obama based his schtic on Commo Keating.

  12. mem

    As a general principle, however, when asked about this last week, Scott Morrison (!) said it best: “It’s their money.”

    Has there been a big trick played on many elderly self-funded retirees? I stumbled on this by accident when looking into the fact that a geriatric friend of mine went to purchase a new computer with his super income for last month and discovered that it had been reduced by nearly 40% without his approval. Then on inquiry discovered that the super fund managers had reduced his minimum payment from 60% to 30% when the government brought in its new legislation regarding minimums. This was at the same time the government introduced new legislation to allow youngsters to draw down on their payments early. What happened from my view (this is where the trick is pulled) is that the super funds sent out a very complex letter to pension fund holders to ask them to approve lowering their payments to the minimum but knowing full well that most wouldn’t understand it. It really only affected people in the 75 plus group . The super funds then cut back individual super payments (without the fund holders approval even though this was stated as the required action in the letter). Of course when now challenged on this they will then bring the amount back to its previous level. But the funds are gambling on very few people challenging them.This trick enables the super funds to build up cash reserves to pay out the youngsters accessing their funds early. It was a trick and in my view totally illegal. There will be many old aged retirees now doing it tough or not even aware yet that their super payments have been reduced. Am I wrong on this? Can someone advise?

  13. Cynic of Ayr

    Well, there’s a coupla matters here that could perhaps be mentioned.
    1. Compulsory Super, IMHO, is a good idea. I am sure, nay, positive, I would not have the amount of money in Super that I have, if it was left up to me. For this, I am eternally grateful. Am I unique? No, the hell way am I. The proof of that is the number of people who seized on the chance to withdraw money, needed or not.
    2. The reason, and only reason, Morrison let loose this little pig was so he did not have to fund the bailouts entirely himself. 32 Billion has been withdrawn? 32 Billion that Morrison did not have to find. Even allowing for rorting, it would still be a substantial amount of cash he’d have to add to the deficit, and add to electoral bad news.
    3. The Industry Super Managers are on the bandwagon to cancel withdrawals not because – as they say – the well being of the workers, but because it makes it harder to justify the millions they take out of the pool in salaries and Labor Party donations, when the pool is so much smaller. Super Managers are Union Managers, and the worker always comes last.
    4. So, when the withdrawees eventually retire, and their mates who did not withdraw have so much more money – a lot more – for retirement, it’s all going to be the Governments fault, and they should be recompensed. By the Government of course.
    5. Public Servants and Pollies don’t have to go to these extreme do they? Because they are not out of work!
    6. “It’s their money!” What a fucking crock of shit, Morrison!!!! The money you’re squandering like there is no tomorrow on all sorts of bullshit schemes – wind turbines, solar panels, and water uphill schemes that don’t supply any power, and to-be-useless submarines in fuck-knows how many years time – is their money too! Convenient when it suits.

  14. Megan

    Yes Cynic, I came here to say it’s ALL their money.

    Thieves and rogues every last one of the mongrels. My deepest apologies to actual mongrels.

  15. Iain Russell

    Maybe they are paying for rent boys, Paulie.

  16. Win

    Paul Keatings legacy like Peter Beatties resonates down through the years .They were not held to account by a media co joined at the wallet when they introduced their policies and none holds them to account today.

  17. Petros

    You didn’t mention his comments on baby boomers, CL.

  18. John Bayley

    @mem #3535849:

    What you are referring to is the result of the fact that many retirees in receipt of superannuation pensions have the pensions set at the ‘default’ – which is ‘allowable minimum’.

    For people over 65, but under 75 years of age, the minimum is normally 5% of each financial year’s starting balance (so $5K for each $100K in savings).

    When the government halved the minimum across all age groups in May (IIRC), this became 2.5% applicable from July 1.

    Consequently major public funds simply applied the new minimum, because the member[s] had not advised them to keep the pension at the previous level.

    This works the same way even in normal times – if a member wants to have the pension be set at a specific level above the default, s/he has to request the provider that it be so.

    So in this instance, the blame does not lie with the super providers – although I would never claim that most of them are, even at best of times, particularly efficient.

    Furthermore, with regards to the inability of many people to understand the technical nature of such matters, you are exactly correct.

    I am convinced by now that even the government public servants, let alone the politicians themselves, understand much of the BS rules & regulations that they pile on the rest of us.
    The entire system needs reform, or it will inevitably collapse under its own inefficiencies and red tape.

  19. It seems to me that the superannuation industry is predicated on such calculation intricacies and little understood procedures, that it is fraught with possibilities for disaster. Some industry super funds, for example, invest heavily in infrastructure – which is often very profitable, but the value cannot be calculated on a daily basis, as equities can. This became very apparent in the GFC when superannuants who were able to withdraw funds discovered that the balance of their accounts were somewhat different to the regular reporting.

    Whilst it always seemed like an excellent form of compulsory saving, the entry of assorted players, trailing commissions, and the growing involvement of union heavies on the boards of industry funds, makes the whole industry seem like a train wreck waiting to happen.

    Good luck to the young ones who are cashing in their money (yes – THEIR money) when they are in need of it.

  20. Terry

    Australian Superannuation.
    The critical problems are its compulsion, its complexity, its inefficiency, and its ineffectiveness.

    Superannuation might be a good idea, it might not be. It is not the only way to save for retirement. The idea that the government can force your employer to confiscate a proportion of your income and stash it with (chiefly) the Union Cartels is simply corruption on a grand scale; a government out of control of the people and therefore extraordinarily dangerous.

    It is this mentality of letting our governments control and dictate to the people, rather than the other way round that has allowed them to so efficiently erode peoples’ rights through the COVID “emergency” without as much as a whimper from the once-free people of Australia, but I digress.

    Superannuation is meant to be a simple, long-term saving strategy that exchanges the immediate utility of those funds in exchange for an immediate tax break; to allow those funds to compound without the tax burden.

    The existing (astronomically complex) tax system, combined with the government wanting to tax contributions upfront (immediate money hit), instead of when they are used at withdrawal, means an army of accountants, administrators, auditors, regulators, and lawyers are “needed” to manage the giant boondoggle. (I wonder why there is such a strident lobby group for an increase in the rate to 12% and screams of pain from the same group should anyone want to access their own money – this is their livelihood you’re toying with, after all.)

    If the blatant vested interests and state-sanctioned theft of peoples’ money were not enough, it is that the system is a fundamental failure. It barely saves those superannuants as much as the ticket-clippers take in “fees”.

    People are accumulating that money (fine) but then reaching retirement and spending it as a windfall so that they can STILL draw the pension (the whole point was to eventually reduce the need for the provision of old-age pensions). And who can blame them? The system encourages this.

    If tax was applied at the withdrawal stage (as income), people would be incentivised to drawdown as annual income, taking advantage of yearly tax-free thresholds, rather than draw lump sums. It wouldn’t mean people could not or would not draw large sums (it is their money after all), just that there would be a tax incentive to extend the drawdown over several years/decades – as it should be – and reducing the reliance on the aged-pension.

    If the system cannot be simple, efficient, and effective then it should be dismantled immediately.

    If it can be these things then there is no need for compulsion.

  21. Louis Litt

    MEM – I reckon your on the money. The Industry Funds, the union funds, now have their own bank – me bank. This was Keating goal, to have capital controlled by the unions and the banks economic power reduced. Thus the unions dictate what is done with the money. Hence Keating being rolled out by the union funds as he is the only one is able to forceably agree the point.
    ME bank ability to lend money will now be severely effected. They will not be able to lend out as much.
    His point about Aust businesses being able to afford it is not true. Check out how many businesses don’t pay super gaurantee, it’s substantial.
    When super gaurantee was introduced it was in the middle of a recession, non union wages went down to cover the 3.5% levy.
    Aussie labour rates with its on costs is a discouragement to establish real industry here and the preference for contractors is over wehlming.
    The only winners with super are govt employees which no business can afford.
    Finally Mr Keating shoul drop the labour v business owners as this is concept non sense cal. Employers need labour

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