Superannuation

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Australia’s superannuation farce to worsen under Labor

By Leith van Onselen The Australian’s Judith Sloan has once again torn apart Australia’s compulsory superannuation system, describing it as a “national disaster”. Sloan claims compulsory super now only serves to benefit the superannuation industry, rather than its members, and is badly failing low-income earners or middle-income earners, whereas rich people do not need it.

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Grattan: 12% compulsory super lift to bleed $20b from wages

By Leith van Onselen The Grattan Institute has released startling analysis of both sides’ policy to increase compulsory super contributions to 12%, which it estimates will cost workers up to $20 billion a year in foregone wages once fully implemented in 2025-26, or close to 1% of GDP. Grattan also shows that the extra super

6

Peter Costello admits compulsory super is failing

By Leith van Onselen Former Treasurer, Peter Costello, claims that Australia’s compulsory superannuation level of 9.5% will not generate anywhere near enough funds for retirement, even for workers that contribute for the entire of their working lives. From The ABC: Former treasurer Peter Costello says Australians will not have enough money to become self-funded retirees

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2019 Budget introduces new super grey gouge

By Leith van Onselen In 2005, former Treasurer Peter Costello implemented the mother of baby boomer bribes in the form of the “transition-to-retirement” (TTR) rules, which allowed those aged over 55 to legally minimise their tax by salary sacrificing up to $35,000 into a superannuation account and then simultaneously withdrawing the funds as income. In

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PBO: Lifting super guarantee will lower wages

By Leith van Onselen After Labor last week doubled down on lifting Australia’s superannuation guarantee (compulsory superannuation) to 12%, the Parliamentary Budget Office (PBO) today has explicitly warned that such a move will necessarily lower wages: “The increase in the superannuation guarantee to 12 per cent will likely lead to lower wage increases, shifting a

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It’s time for a warts-and-all review into compulsory super

By Leith van Onselen The Conversation’s Peter Martin has called for the Morrison Government to establish a warts-and-all inquiry into Australia’s compulsory superannuation system before the upcoming election, because the captured Labor Government is unlikely to do so: Facing overwhelming odds of defeat in the election due within weeks, one of its last throws of

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Industry super wins $11b from rorting retail funds

By Leith van Onselen Data from the Australian Prudential Regulation Authority (APRA) show that retail superannuation funds’ outflows totalled $10.9 billion in 2018, compared with just $3.5 billion in 2017. Industry funds benefited from the negative sentiment toward retail funds, with AustralianSuper’s funds under management rising by 17% to $140 billion, lifting its market share

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How much do you need to retire comfortably?

By Leith van Onselen The Association of Superannuation Funds of Australia (ASFA) has released new estimates from the December quarter claiming the rising cost of essentials has pushed up the amount of money Australians need to live a comfortable retirement. From The Herald-Sun: [ASFA] found for couples to live a comfortable retirement — assuming they

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Fake Greens scuttle sensible super reform

By Leith van Onselen Legislation passed by the House of Representatives yesterday will give the Australian Taxation Office more power to consolidate low-balance and inactive superannuation accounts. It will also cap fees on accounts with balances of less than $6,000 at 3% and will ban exit fees. However, the federal government’s plan to make insurance

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Royal Commission another bitter pill for superanuation sector

By Leith van Onselen Only one month ago, the Productivity Commission (PC) delivered its scathing final report on the efficiency and competitiveness of Australia’s $2.8 billion superannuation system, which noted a multitude of failures ranging from a proliferation of poorly performing funds, excessive fees, unnecessary and costly insurance products, and multiple accounts. Most importantly, the PC

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ATO: SMSF mortgages a ticking time bomb

By Leith van Onselen The Howard Government’s decision to allow self-managed super funds (SMSFs) to leverage into property and other investments was a mistake. Specifically, it allowed SMSFs to be turned into speculative vehicles rather than savings vehicles, in turn dramatically increasing the riskiness of Australia’s retirement savings and financial system, further inflating Australian house

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LVO demolishes compulsory super on Radio 2GB

Yesterday afternoon I gave an interview on Radio 2GB’s Drive program talking compulsory superannuation. The interview starts from around the 44 minute mark and runs for around 12 minutes. In particular, I rip into Labor’s, the union’s, and Paul Keating’s call to raise the rate of compulsory superannuation to 12% or 15%, arguing that it

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Doddering Keating still wants to lower worker’s pay

By Leith van Onselen Even after the Productivity Commission’s (PC) scathing final report on the efficiency and competitiveness of Australia’s $2.8 billion superannuation system, former Prime Minister and architect of Australia’s compulsory superannuation system, Paul Keating, has the gall to criticise the Coalition for delaying an increase in the superannuation guarantee, as well as attack the PC for

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Why a broader review of superannuation is needed

Cross-posted from The Conversation: There’s a lot in the Productivity Commission’s landmark 722-page table-thumper of a report into Australia’s superannuation system, completed after nearly three years of invesigation. For now, I’ll make three comments. The Commission gets the industry First, it’s a very valuable report. The Productivity Commission (PC) has undertaken a deep analysis of

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Adam Creighton wrong on superannuation concessions

By Leith van Onselen Adam Creighton penned an article in The Australian over the weekend attacking Labor’s plan to lower the high income 15% superannuation concession surcharge to $200,000 from $250,000 currently: Reducing even further the Division 293 threshold from $250,000 to $200,000 would mean a worker on a salary excluding super of, say, $210,000,

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SMSF property leverage a ticking time bomb

By Leith van Onselen The Howard Government’s decision to allow self-managed super funds (SMSFs) to leverage into property and other investments was a mistake. Specifically, it allowed SMSFs to be turned into speculative vehicles rather than savings vehicles, in turn dramatically increasing the riskiness of Australia’s retirement savings and financial system, further inflating Australian house

18

The most important take away from the PC’s super review

By Leith van Onselen Last week’s final report on the efficiency and competitiveness of Australia’s $2.8 billion superannuation system was scathing, noting a multitude of failures ranging from a proliferation of poorly performing funds, excessive fees, unnecessary and costly insurance products, and multiple accounts. While these issues are all important and require urgent reform, the biggest

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PC Report into super recommends ditching retail funds

by Chris Becker In news just in, the boffins at the Productivity Commission have worked out that putting your superannuation into “underperforming funds….that charge excessive fees” is harming Australians retirement savings. In other words, all the funds run by the banks. In other news, water makes you wet. The Federal Government commissioned – at some reluctance

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Asset deflation likely to delay retirement plans

By Leith van Onselen New research from Roy Morgan shows that the number of Australians who intend to retire in the next 12 months is estimated at 426,000, a 30% increase on the level seen in 2008 when it was 328,000. Meanwhile, the average gross wealth (total assets excluding owner-occupied homes) of intending retirees is $331,000,

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Dumb unions lobby to lower workers’ wages

By Leith van Onselen You can’t make this stuff up. Unions are reportedly seeking to change Labor’s platform on superannuation at its upcoming national conference, demanding an increase in the superannuation guarantee to 15% by 2030. From The AFR: The Transport Workers Union and the Construction, Forestry, Maritime, Mining and Energy Union are driving the push as

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Keating’s superannuation monster is out of control

By Leith van Onselen The Australian’s Judith Sloan has continued her commendable attack against Paul Keating’s compulsory superannuation monster, describing it as “one of the costliest and most ineffective retirement models in the world”: Most people think Paul Keating has four children. In fact, he has five. The fifth is compulsory superannuation: super for short…

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Labor man Greg Combet demands 12% compulsory super lift

By Leith van Onselen It looks like Labor will persist with raising Australia’s compulsory super rate to 12%, if former energy and climate change minister in the Rudd and Gillard governments, Greg Combet, is any guide. From The Australian: Greg Combet, now one of the most powerful figures in the $2.7 trillion superannuation system, says.. the government needed