Defensive Paul Keating lies again on super

Following the Retirement Income Review’s scathing assessment of Australia’s compulsory superannuation system, the architect of the system, Paul Keating, too to ABC’s 7.30 Report to rubbish the Review’s findings with a bunch of lies and obfuscation:

LEIGH SALES: Let me ask you address the point that we heard the Reserve Bank Governor make and it is made in this report too which is that if you increase the rate of compulsory superannuation, it is going to result in lower wage growth?…

PAUL KEATING: That’s nonsense… We have had no increase in superannuation since 2013. Yet, there has been no wage increases since 2013…

LEIGH SALES: Where will the money come from to fund the extra increase in the superannuation rate?

PAUL KEATING: It will come from the profit share of companies which have now banked 10 percentage points of labour productivity unpaid as wages since 2012.

So working people have, through their efforts, lifted productivity by 10 per cent not a cent of it has gone to wages and that has legislated 2.5, a the quarter of the 10. So we’re saying to the Government, “Well, look, there is 10 per cent that the companies have sat on, why don’t they give a quarter back, 2.5 per cent back, $8 a week”…

Can I just make this other point. This is a really important point in the report. The report says that the call by the budget, the call by the pension system on the budget will be down to 15.3 per cent, 15.3 per cent. In France and Germany, it is 9 per cent.

We’ve got now, with a massive increase in the aged population, virtually doubling it. We’re going to have the lowest call by any country in the world upon the budget and this is all because of superannuation. The reason why the budget call, sorry, the reason why the pension call on the budget is going to be this low is because of superannuation – self provision…

If we don’t, the profit share will simply rise and it will cost people in the long run in terms of, in terms of their, well, you work it out, Leigh.

First of all, Paul Keating’s claim that “there has been no wage increases since 2013” is patently false. Wages have grown by more than 16% since 2013, averaging 2.2% growth annually:

Accordingly, even with low wage growth, employers have plenty of scope to cut take home wages if the compulsory superannuation guarantee (SG) is increased to 12%.

This takes me to Keating’s next point claiming that the cost of lifting the SG “will come from the profit share of companies”. How? Workers’ share of national income has been falling for decades, as illustrated in the next chart. It is not some new phenomenon that has magically appeared since 2013.

Why would employers voluntarily absorb the hit from increasing the SG when workers’ bargaining power and share of national income is at near record lows?

If bosses currently don’t feel pressured to give decent wage rises, then why would they feel pressed to absorb further increases in the compulsory SG?

Let’s get back to basics here. Employers only care about their total employee cost. They don’t care what share of an employee’s wage is paid directly to the employee, what share goes in tax, and what share is put into a superannuation account. So, if the SG is increased, bosses will simply transfer more of the person’s total remuneration into superannuation (other things equal).

Moreover, the massive fall in the labour income share in Australia over the period when the SG was increasing is inconsistent with Keating’s new found suggestion that employers absorbed the cost of super.

This brings me to Keating’s last canard that “we’re going to have the lowest call by any country in the world upon the budget and this is all because of superannuation… The reason why the budget call, sorry, the reason why the pension call on the budget is going to be this low is because of superannuation”.

Keating has conveniently only looked at the pension cost on the Budget, not the combined pension and superannuation cost.

The Retirement Income Review shows that the cost of superannuation concessions is growing fast and will pass the cost of the age pension:

It also shows that any cost savings for the Aged Pension would be far outweighed by higher superannuation concession costs:

To the extent that superannuation tax concessions are contributing to higher superannuation balances of lower- to middle- income earners, they help to reduce Age Pension expenditure. But the main influence behind the growth in superannuation balances is the SG. Tax concessions are largely concentrated among higher-income earners who are close to and above preservation age. Across the income distribution, the lifetime cost of superannuation tax concessions is projected to outweigh the associated Age Pension saving (Chart 13)…

The Henry Tax Review, the Grattan Institute and Rice Warner have all come to the same conclusion (see here).

If Paul Keating genuinely cared about the welfare of future retirees he would argue to unwind the compulsory superannuation system altogether and shift the enormous budget savings into lifting the aged pension rate and expanding its eligibility.

Because ultimately, it is the enormous cost of superannuation concessions that prevents the aged pension from being lifted to an adequate level.

Unconventional Economist
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Comments

  1. NSW is cutting payroll tax by 60bp for the next two years. I wonder if any of that saving will go into wages in the same way that increased super comes out of it.

    At the very least it will be interesting to see what unions amd employers argue in front of FWA next time

    • I already know the answer and I think you do too

      If the SG isn’t lifted then employers should be forced to pay the equivalent to all employees in take home pay

      Coz that’s what’s meant to happen right, ceteris paribus (where is CB these days)

    • its not a zero sum game, if the reason the businesses get the Payroll tax break ( technically an income tax levied by the state despite the constitution ) is to help them survive then its likely there isn’t extra money to pass on to the wages.

      The majority of businesses are going to struggle over the next few years, and with a tax system that encourages business owners to extract equity from the business there is likely not a lot of fat left in them to bear the brunt of whats coming.

      That said, a lot of those businesses that still make good coin during the next few years are likely to do so by cutting wages where ever possible, despite getting breaks to help prevent it.

      • There is no mandate that says a business must survive. We have gone 30 years without a good clean out. Australia is the home of high margins and no customer service. We have had 10% productivity growth on average but the picture is very variable. Low wages have been keeping low productivity zombies alive. The real estate vampire has grown very fat.

        • Your right, and I think the relevant point that the pro increase people are missing is that 9.5% of that $50k wage is a lot bigger than the 12% of the non existent wage that occurs when you lose the job or the business goes under.

  2. I always liked PK. But i wish he would have admitted the role massive unwanted immigration has played in suppressing wages.

    • Small brain. Big ego. Nasty tongue. What’s to like about that?

      Keating was the Australian neoliberal spearhead.

  3. Have wages grown 2.2% per year since 2013 in real terms?

    Keating is right about super. Completely wrong about China.

    The average person can’t be trusted to save for their retirement. The age pension won’t be adequate in the decades to come.

    Loopholes that benefit the wealthy need to be closed. SMSF’s are generally just a tax dodge for the wealthy.

    Hold a gun to heads of business and they’ll pay the extra super. The money is there.

    • ErmingtonPlumbingMEMBER

      “The average person can’t be trusted to save for their retirement”

      “Hold a gun to heads of business and they’ll pay the extra super. The money is there.”

      Sounds like your suffering from the same anti democratic “Right to rule mentality” as Keating there mate.

      • In the grand era of cognitive dissonance, where Kevin Rudd can berate Murdoch for his fascination with ‘power’ and no one blinks, pots are permitted to call kettles black, should they identity with pots, despite their large spouts.

        Keating dumped our community’s social needs on the market’s doorstep with a Paddington-like note that said “Please look after this society” – every man for himself – job done. It has become another divisive yet half-baked ideological issue that stems from the ALP abandoning the idea memorialised in the 8-8-8 on that statue outside the ACTU. Workers have bought dignity into retirement via a life of hard work that should be non negotiable. This should be built into the system, and if its not, holding a gun to the bosses’ head is not going to redress the ALPs drift to the Right and flight of fancy that the market is the worker’s best mate. If only PK might admit that this and that the one-trick China pony carting our service economy was a similar mythology, we might have a real conversation.

        • Spot on Clive and well phrased!
          PK’s super genesis was a tax shelter for the ‘privileged’ (his mates) in the era when avoiding tax ( and the societal responsibility that goes with it) was mission du jour.
          The architecture of a SMSF full of Strayan shares and the imputation credits would offset the internal earnings taxation.
          Slick as, my good man ! (clink of fine crystal goblets full Pen Grange)
          Subequent disciples of PK’s super carried the ‘shelter’ torch and its asymmetic and unfair benefits for the elite to this day.
          Witness ‘tax free’ income for those over age 60 (WTH) and earnings tax free if in ‘pension’ mode leaves the tax burden the nation requires to prosper at the feet of the workers. Those in that tax-free club will defend their privileged position with a ferocity that only rests upon their notion that they somehow deserve such outrageous tax concessions.

    • “Have wages grown 2.2% per year since 2013 in real terms?”

      Irrelevant. Nominal wages grew over this period and would have grown less if the SG was lifted.

      Abolish super and raise the pension. Easy fix. Far cheaper, more equitable, simpler.

      Compulsory super is an expensive policy failure.

    • Superannuation isn’t about funding retirement, it’s to pay for that overseas holiday and pay down the mortgage….. that’s the reality!

    • The average person can’t be trusted to save for their retirement.

      The average person doesn’t earn enough in their lifetime to pay for their retirement.

      The age pension won’t be adequate in the decades to come.

      That is a policy choice.

  4. John HamiltonMEMBER

    In my case any increase in Super comes out of my take home pay. My common law contract was change several years ago to ensure this was the case. They can stick any increase where the sun doesn’t shine. I should decide where my money goes. @#$* off to them I say.

    • ErmingtonPlumbingMEMBER

      That my Kids will be forced to hand over “Their money” to a rapacious financial services industry for over 50 fking years! of their working lives, to be gambled with, by others, with no guarantees on results, fills me with hatred for every thieving person in that industry.

      • Totes BeWokeMEMBER

        There are funds close enough to fee free available to everyone. You are looking at the worst scenarios and rejecting the greatest wealth generator left in Australia.

        Your blind ideology hurts you.

          • Totes BeWokeMEMBER

            I don’t have an ideology. You are the one who defends the Labor party, but can’t say why. Your idol is a joke, a scam, a facade.

            I just want fairness and opportunity for all Australians and I know what’s preventing that. If that makes me an ideologue, so be it.

            You can have fairness and opportunity…or….you can have a high population. Time for you to own up to what the Labor party are.

          • You are so blinded you can’t even see that I have NEVER defended the labor party…

            The reason Westminster democracy has been successful at keeping the elites interests met is because it causes so many of the people who have the motivation to effect change to direct it in completely ineffective directions resulting in maintenance of the status quo.
            It is not the Labor parties fault. It is not the liberal parties fault. It is inherent in the system. To fix the problem you need to change the system.

          • Totes BeWokeMEMBER

            Fact. You can’t change the system without referendum. Should we ask LNP and Labor to take it to a referendum?

            I wish I’d thought of that.

            The system is what it is, and we can get more out of a sht system by weakening one of the parties (the one betraying their voter base the most would be easiest), and paradoxically weakening the other at the same time. It’s win win and is the obvious strategy.

            Without immigration, LNP can’t do a fraction of the damage to us that they’re doing.

          • The system is what it is, and we can get more out of a sht system by weakening one of the parties (the one betraying their voter base the most would be easiest), and paradoxically weakening the other at the same time. It’s win win and is the obvious strategy.

            Please Explain…..

            I really dont understand how weakening the only opposition to the current clowns makes those clowns weaker and not stronger… your right it has to be paradoxical but I just cant see it…

            As for super being the greatest wealth generator… it might be the greatest one left but it generates wealth for those who manage the funds your forced to invest, its only the last 5 or so years where there has been any real difference between the funds and the actual returns are pathetic compared to the rate the stock market has grown.

            The restrictions and regulations imposed on what the funds can invest in has lead them to put a lot into property, very little into industrial and commercial ventures, the rest is gambled to influence the prices of stocks to the advantage of other funds.

            Superannuation the way its setup makes it a tax payer funded self licking ice cream. Another ponzi scheme.

          • Totes BeWokeMEMBER

            kanniget

            “I really dont understand how weakening the only opposition to the current clowns”

            There is no opposition to anything that matters.

            Replace Labor with Independents who will oppose LNP on what matters (immigration, globalisation, visas, education, privatisation, development, asset sales, environment) weakens LNP.

            ATM, Labor go along with most of what’s harming this country.

            You can choose where your money is invested in some super funds (international, domestic, growth, high growth, bonds, cash, property, balanced, fixed). You get to choose what super fund you’re in. You can also manage your own.

          • @Totes,
            Fact: The wealthy and powerful don’t relinquish control without a fight.
            Do you really think trying to elect independents into parliament is going to remove the control the wealthy have. Most of that control is not even in parliament but in the megacorps that run everything.
            Fact2: Change only comes from revolution. This has been borne out throughout history.

          • Totes BeWokeMEMBER

            “Most of that control is not even in parliament but in the megacorps that run everything”

            We the voters decide who’s in Parliament and who makes the rules.

            “Fact2: Change only comes from revolution. This has been borne out throughout history”

            When a revolution starts it’s already too late. BTW, when/if a revolution starts, and there’s 50m Australians, most extremely poor, the mob might want something different to what you want. You might find you’re not wanted, or they want what you’ve got.

            A revolution is the answer after what I’m talking about is exhausted. Get rid of Labor to avoid a revolution our kids would probably be the victims of i say.

            You going to get Australians to revolt now? I don’t think so. Not until their kids are starving.

          • I really dont understand how weakening the only opposition to the current clowns makes those clowns weaker and not stronger… your right it has to be paradoxical but I just cant see it…

            Because they’ll be replaced by a coherent and united coalition of independents who will do exactly what Rich wants them to.

            (And most assuredly NOT an incoherent bunch of easily-bribed single-issue fringe-dwellers who probably couldn’t even agree on where to go for lunch.)

            Isn’t it obvious ? (/s)

          • Totes BeWokeMEMBER

            Smith

            They’ll do what the electorate wants (if the electorate finally gets smart), or they’re out.

            Independents are far more likely to be compliant to the electorate than party machines.

            Let’s face it what we’re doing isn’t giving us good outcomes.

            Jump on board Smith and destroy Labor and Greens for the good of the country. You know it makes sense.

            Imagine if Greens open borders nutters were replaced with Independents in the cities? The independents across the country could force LNP to act on climate change and the environment.

            Only great outcomes can come from the end of Labor and Greens.

            Sadly Greens wrecked Labor for the plebs, so they both have to go now.

          • “Independents are far more likely to be compliant to the electorate than party machines.”

            Or even more open to soft corruption for post politics placements given they only have a single term to secure their future before being given the boot.
            Given the vote isn’t allowing you to control what the current politicians are doing on what other than blind hope are you basing this savior of australia?

            Edit: The greens are the outcome of the destruction of the democrats, what do you think the destruction of labor will bring? Answer the dominance of the greens. The destruction of both? I don;t know, but it will almost certainly be even more woke so good luck with that.

            Edit2:
            You agreed that labor were wrecked in the 80’s before the greens even existed, so how exactly did the greens wreck labor again?

          • They’ll do what the electorate wants (if the electorate finally gets smart), or they’re out.

            Independents are far more likely to be compliant to the electorate than party machines.

            Yes ? We’ll get a perennially changing collection of incoherent, easily-bribed single-issue fringe-dwellers who probably couldn’t agree on where to go to lunch.

            The point is that they won’t present a threat to the remaining coherent, unified party.

            You agreed that labor were wrecked in the 80’s before the greens even existed, so how exactly did the greens wreck labor again?

            It’s actually “the left” he hates. Labor/Greens are just the current totems.

          • It actually seems like he hates them for being the wrong kind of left though. OR maybe he is just a really incoherent LNP plant.

          • Totes BeWokeMEMBER

            Smith

            Theres plenty of left policy I like. You and I have established that many times. You know I’m a fan of the environment, workers rights, Medicare, and a fair society. Trouble is immigration destroys all of that.

            I only want one core policy addressed, and there’s no reason independents can’t force LNP to do it.

            By supporting Greens and Labor immigration policy you are wrecking everything else.

            https://tapri.org.au/wp-content/uploads/2020/10/Big-Australia-finalV6.pdf

          • Trouble is immigration destroys all of that.

            Totes, You just come across as racist, Immigration itself isnt the problem, the problem is rampant immigration thats sole purpose is to drive a ponzi scheme, push down wages and fraudulently make GDP appear to go up.

            I Agree with you that the ALP could do better on a range of policies and could well do to distance itself from the CCP and from high immigration, putting Australians first. But its delusional to think hurting the ALP hurts the LNP…

            I have long advocated for a majority of independents in the parliament I am not delusional to think they would answer to the electorates like you think. We would need a very different breed of independent to what we get now and I think they would just form a party as soon as they could once they realised they had any power.

            Fact is there will be no change of the status quo in politics while ever rich far right moguls own the media. It would not matter what policies an alternative party put forward the media wont allow a positive review of them.

            Your own rants about all the so called bungled programs the ALP are responsible for shows the truth does not matter, only the perception that is left behind after the media has had its day.

            Superannuation takes money from the pay packets of the workers and in most cases gives it to the finance industry to play with for 40+ years and gives them a relatively a small return while they reap the majority of the profits. It doesn’t matter where you put the money unless your running your own fund, at the end of the day you give your money to someone else to play with.

            Superannuation existed for a long time before they made it compulsory, but once they did the returns plummeted and have continued to do so. The majority of it props up the stock market and real estate. there used to be so many more productive places to invest money but they screwed that up.

            The crazy thing is that those who benefit the most from the tax concessions are also those that will least need it in retirement. My Accountant has advised me to maximise my super contributions to the max, to reduce the amount of tax I pay. He even explained a perfectly legal scheme that would allow me to invest $30k a year over the maximum allowed through contributions.

            A Mate of mine decided to transfer his super to an SMSF, between him making his request and them paying out the funds unit sell price dropped way below the buy price and he lost close to 10% in value. They delayed for ages and in the end he had to threaten the ombudsman. I had a similar experience 10 years ago….

    • GunnamattaMEMBER

      This, for sure.

      But with Super it needs a simple statement of ……(something like)

      ‘Superannuation is for the enablement of retirement incomes for households, as a supplement to and in conjunction with the aged pension.’

      I would also add something about ‘lump sums’ taken from Superannuation accounts before access to aged pension will still be considered in relation to aged pension entitlement.

      • Mr SquiggleMEMBER

        Yep, or reintroduce the tax on payments and withdrawals from Account-based Pensions. Super used to have a simple flat tax model, 15% tax on all monies in, 15% on all earnings while it was in super and 15% on all withdrawals and payments out. Until Costello changed it

  5. It feels like an argument over trifles.
    Wage growth will remain sluggish post-COVID especially when they throw open the borders again.
    Business will continue to pocket the vast majority of any increases in national income as we hurtle down the track of aping the US and its hyper-inequality.
    Recently two banks have sent me surveys about their social responsibility. The easy answer is that they would be seen as more socially responsible if they paid their executives far, far less than they currently do. But pigs will fly before that happens.
    So we I am stuck with answering questions about whether sponsoring women’s cricket is perceived more positively than sponsoring an art gallery.
    Meanwhile an argument over 2.5% possibly paid in 25 years versus even less paid today rages while it is the whole system of growing inequality which is the real problem.

    • GunnamattaMEMBER

      It feels like an argument over trifles.

      If you are one of a large number of Australians looking at spending a large portion of your life where you think

      1. access to the old age pension, and the rate of that old age pension, is likely to be your major income source, and

      2. the rate of that old aged pension doesnt vary much if you happen access funds within your superannuation prior to accessing that old age pension – to enable a one off spendathon of your choice, and

      3. the funds within that superannuation accumulation receive (or can receive) concessional taxation treatment, and

      4. that concessional taxation treatment amounts to an effective gift by the taxpayers of Australia to either (a) the individual in the context of other individuals not receiving the same benefit from the taxpayer, or (b) other individuals in the context of the individual not receiving the same benefit from the taxpayer, and

      5. that funds withdrawn from superannuation accumulation as a lump sum may affect asset prices affecting other taxpayers, or may be deployed on assets or services which other recipients, or anticipating recipients of old aged pension do not have funds to access, in the context of some of that access being funded by taxpayers, and

      6. you think that benefits accorded by the taxpayer to the the public, or sections of the public, through the concessional treatment of superannuation or the payment of old aged pensions, does or could affect the funds available for the provision of government services or taxation concessions to other entities within the Australian economy.

      Then you may find that an awful lot of Australians may twig to the possibility that what you see as a trifle is something other Australians may consider somewhat more important.

    • Totes BeWokeMEMBER

      Olaf

      Yep. This argument for me, is whether I want to be able to build my wealth, or share it with limitless number of people they’re forcing upon us.

      Inequality they say? lol. That’s just BS talk from a country full of spoiled rotten people without a clue of what’s coming via big Australia. Wait until we’ve got working poor, and let’s see if anyone cares about the starving families.

      Big Australia means growing inequality. Or maybe it can happen differently here to anywhere, any time, in the history of the world.

  6. Totes BeWokeMEMBER

    With 400k annual immigration, I’m 100% confident in 20 to 30 years pensions will be near non existent for most Australians.

    Take the 12% now via legislation, and stop them gearing the whole lot into higher house prices that WON’T feed us all in retirement.

    I suspect anything coming out discrediting super is a scam by the elites to remove wealth from the plebs.

    “Second, the Review warns that lifting the SG to 12% would increase inequality in Australia, since super concessions overwhelmingly benefit higher income earners”

    Seems to me, if you’ve got a job, higher super is in your interests. Sure welfare is going to suffer, that’s the whole point. With 50m people we’re going to US style poverty and welfare, super will ensure you get to eat. Take the 12% now, while it’s there, lock it away and make it grow.

    Correct me if I’m wrong, is MB core fight against super to prevent inequality? It’s coming either way with big Australia. My goal should is to ensure I’m not one of the poor. Just like every over populated country in the world, no one will care about the real poor when you struggle to feed your own kids.

    Australia is headed for pain, all you can personally do is take what you can when you can. “Tragedy of the commons” gets very real when there’s too many people.

    • ErmingtonPlumbingMEMBER

      Lol,…just gotta impoverish more Australian citizens just enough to bring house prices down to a level Totesy deems less outrageous.

      • Totes BeWokeMEMBER

        What? Where did I say that?

        Labor are leading us to more inequality, less home ownership, less job security, lower wages, environmental carnage, American style welfare and medical.

        Big Australia Labor’s the problem ermington.

  7. PalimpsestMEMBER

    One of the key issues is – almost every salaried position I’ve been aware of talks about the remuneration package. When evaluating creating positions we think about remuneration package cost. The extra Super contribution doesn’t change the total cost to the employer, because it’s deducted before take home pay is calculated. It reduces the take home pay. The outcome is that the switch of money from take home pay to locked away in Super means it does not circulate except in the form of higher asset prices, leading to a suppression of the economy due to a reduction in household discretionary spending.
    One outcome from that is indeed increased income inequality because that’s just a fancy way of saying we’re just making life even harder for people on wages or salaries.

    • Arthur Schopenhauer

      Yep. An Employee is the total cost, not just the wage. Super, Insurance, Equipment, Travel, Accommodation, Professional Development, etc, etc

    • The90kwbeastMEMBER

      As an accountant working in a global organisation, this analogy is correct. There isn’t a honey pot of money that super comes from, you pay more super employees are 99% going to lower pay rises.

      The term used is total target cash compensation.

    • Exactly. qty labour supplied is driven by total remuneration incl. super.
      Qty labour demanded is driven by the total employment cost incl. super. So the wage does the adjusting. Super is paid out of wages.

    • It is amazing how many people don’t get the point of total remuneration/cost. It is like they have been brainwashed by Alan Jones into believing everything is an additional burden on business and employees should be grateful.

  8. reusachtigeMEMBER

    The best thing that could happen with Super is that it’s scrapped and the money taken out and put into property which is a far more solid investment for people!

  9. working class hamMEMBER

    SMSF’s are so popular with the wealthy because you can actually control your money, not just watch it get eaten by fees and inflation. Not knowing what rules will govern the super space term to term, makes long range planning a gamble at best. Why would anyone use such a hands off strategy as their sole future income?

    The problem with forced contributions is that a trough of that size always attracts pigs. Bigger trough more pigs.
    Whatever the system was designed, the reality has evolved into something quite different. I would gladly forego any tax relief on that 10% for control of my own future, whilst knowing that the 1% were not gaming the Shiv out of it.

      • The90kwbeastMEMBER

        SMSF Audit fees are reducing to a couple of grand per annum now but the rule of thumb is if you don’t have at least $150k forget about a SMSF. Wouldn’t call it wealthy as such but still out if reach for many which is sad.

        • I’ve been in the workforce for 20 years on above median wages including 10 years at 15% contributions and don’t have 150k in super.
          As always everyone thinks wealthy means someone with more money than me, except bill gates of course…

          • Care to demonstrate how there bill? Do the calcs for someone earning median income from 2000 to today with the understanding that the sharemarket suffers losses as well as gains.

    • The90kwbeastMEMBER

      I would be for super increases if we had an RBA run default superfund conservatively positioned with management fees max 0.4% p.a.

      All other super funds with higher fees should demonstrate performance over that of the RBA fund and that should be optional for everyone, it should not be mandatory to hand a % of your money to the private sector to then be charged 1%+ in most cases to receive subpar returns.

      • Totes BeWokeMEMBER

        I’ve got my money all over the place in super. Exactly the opposite to what they tell me to do. I pay the highest fees I’ve seen. Exactly the opposite to what they tell me to do.

        I’m killing it. Some funds charge high fees and really perform. Other funds charge high fees and just make themselves wealthy (big 4, plus all the big names).

        • The90kwbeastMEMBER

          I guess every fund looks good when asset values are going up though right

          We’re in the biggest and fastest sharemarket boom ever I would think

          Happy for you though, it’s certainly been a great year to own shares the past 8 months

          • The90kwbeastMEMBER

            Nice. You must be in some good funds but to drill into your phrase killing it are you comparing to benchmarks also?

          • Totes,
            Since you are the investment expert getting 20% returns you must be wealthy enough to start an alternative party rather than just spew labor hatred…

            @90kw
            I get the impression totes is all head and no beer though.

          • Totes BeWokeMEMBER

            lol. I told you I was the opposite to an expert, but I do know how to research and find clever people to help me. I didn’t say 20%, that’s you reaching for the upper limit of the range I gave you in a terrible effort to discredit what I say.

            Note I subscribe to MB and you don’t? It’s petty change compared to what I get from it. Ditto my accountant and others.

            Why would I lie? There’s nothing in it for me. Plus I’ve got a bad memory and I’d come undone.

            You go through life hearing “high fees, low returns”….”Labor’s the workers party” and believe it. It’ll cost you big.

          • Your member of parliament represents you, and “democracy” in modern western terms means the common people have the power, are a couple more you might want to add to the list.

          • Totes BeWokeMEMBER

            “Your member of parliament represents you”

            No they don’t. They represent the party. That’s the whole problem.

          • The ” independent” doesn’t represent you either, they just represent themselves. That’s why it doesn’t fix it.

            Really, representing the party is merely doing what is in their own best interests as a party member.

          • Totes BeWokeMEMBER

            That’s my point. So join me and vote Independent strategically to eliminate Labor. It’s the only way to have control over LNP on what matters.

    • “SMSF’s are so popular with the wealthy because you can actually control your money, not just watch it get eaten by fees and inflation.”

      Most people with SMSF’s are hopeless and pay advisers a 1% fee to manage investments for them.

    • blacktwin997MEMBER

      I’ve never liked Combet but at least he fessed up in the article so that you can divine the 10 orifices within which his fingers are ensconced:

      Greg Combet is the chairman of Industry Super Australia

  10. Super was bought in because (unfortunately) a very large section of the Australian population is financially illiterate. How can one work for 40 or 50 years in this country and not have two coins to rub together at retirement? Fix financial literacy and that will fix super and everything else by default.

    The reality is that no one really knows whether a rise in SGC will come from profit share, wages or a combination of the two until it actually happens.

    The good news is Vanguard has exited fund mandates and will launch a direct competing offer for Australian superannuation money. This will likely mean super funds with Vanguard Fund and EFT options all running at sub 0.50% all in. Super needs consolidation and competition.

    • working class hamMEMBER

      Financial literacy is Aust is suppressed from an early age. Teaching children about the taxation and financial system in school, would illuminate the tilted playing field and raise too many questions about the status quo.