APRA: Australia’s super system too complex and costly

By Leith van Onselen Just as Australia’s bank-owned superannuation funds are calling for greater competition and more choice, Australian Prudential Regulation Authority (APRA) member, Helen Rowell, has given a speech to the Association of Superannuation Funds of Australia conference in Sydney, whereby she expressed unhappiness at the “astonishing” complexity of Australia’s superannuation system which is


Australia’s super fat cats are getting nervous

By Leith van Onselen The chief executive of the Association of Superannuation Funds of Australia, Martin Fahy, is getting nervous. He fears a ‘populist’ future government might end the compulsory 9.%5 superannuation guarantee, thereby ending the rivers of gold flowing to the sector. From The AFR: The scenario goes something like this: a populist politician


Keating: Hands off Australia’s super system

By Leith van Onselen Following former treasurer Peter Costello’s recent call for compulsory superannuation contributions to be taken out of the hands of bank-run retail super funds and union-backed industry super funds, who are gouging members with excessive fees, and instead be invested in a government-run fund, the man who initiated compulsory superannuation, Paul Keating,


The great superannuation rip-off

By Leith van Onselen Following former treasurer Peter Costello’s call last week for compulsory superannuation contributions to be taken out of the hands of bank-run retail super funds and union-backed industry super funds, who are gouging members with excessive fees, and instead be invested in a government-run fund, commentators at The Australian have unloaded on


Costello attacks the super fee gouge

By Leith van Onselen Former treasurer Peter Costello has argued that compulsory superannuation contributions should be taken out of the hands of bank-run retail super funds and union-backed industry super funds, who are gouging members with excessive fees. The chairman of the $133 billion Future Fund contends that this money should instead be invested in


Bloomies Crapstralia series targets Aussie retirement system

By Leith van Onselen Turns out that Bloomberg is not done with its Crapstralia series. After already rubbishing Australia’s economic structure, productivity, the NBN, the housing bubble, the scrotum share market, the energy disaster, and toxic privatisations, now Satyajit Das has questioned Australia’s retirements system: Australians make up barely 0.3 percent of the globe’s population


Wage suppression a time bomb for superannuation system

By Leith van Onselen The Australia Institute (TAI) has produced an interesting report warning that record low wages growth could significantly curtail Australian’s superannuation retirement savings, placing immense pressure on the Federal Budget. Below is the summary of the report along with some key charts: The record-slow pace of wage growth in Australia’s economy is


Forcing compulsory super onto lower-paid a retrograde step

By Leith van Onselen The The Association of Superannuation Funds of Australia (ASFA) is talking its own book again, calling on the government to extend Australia’s compulsory superannuation regime to low-paid workers. From The Australian: The Association of Superannuation Funds of Australia will issue a lengthy discussion paper urging the government to review superannuation contribution


Time to make financial planning tax deductable?

There has been a recent push in the planning fraternity to renew calls for upfront financial planning advice to be made tax deductible (as opposed to ongoing investment management fees etc). Tax deductibility is an interesting beast. From my experience meeting with hundreds of clients in various roles over the years, it sits at the


Spaceship deemed Space Cowboy

People in glass houses shouldn’t throw stones, so are we going to let Graham Hand toss a few rocks for us at of one of the larger players in the online superannuation space, Spaceship: Spaceship recently said it had almost reached $100 million under management, an incredible amount for a startup. On 1 June 2017, The Australian


Why the superannuation guarantee shouldn’t be raised

By Leith van Onselen The Australian’s Judith Sloan has published an article today arguing against raising the superannuation guarantee – the amount that employees must compulsorily contribute to super – to 12%, which has been recommended by a report written by Per Capita and commissioned by the Australian Services Union. According to Sloan, compulsory superannuation


Falling home ownership creates headaches for retirement system

By Leith van Onselen On Friday afternoon, The AFR posted a series of articles warning that the collapsing rates of home ownership among younger cohorts could ultimately cripple Australia’s retirement system. Consider first, the below article by Sally Patten and Jacob Greber: A steady slide in home-ownership rates is building up a fresh demographic headache


Wealthy super tax breaks thrust back into spotlight

By Leith van Onselen Generous superannuation concessions provided to high-income earners was thrust back into the spot light last night in a report from ABC’s The Business (video above). The report discloses that very high income individuals, such as the CPA’s Alex Malley,  CBA boss Ian Narev, Telstra boss Andy Penn, and Wesfarmers boss Richard Goyder,


The bun fight over default super

By Leith van Onselen Debate over the optimal level of competition to manage Australia’s hundreds-of-billions in default superannuation savings has been raging for years. This debate has centered around evidence of superannuation funds gouging members with excessive fees, estimated at more than $20 billion a year. In 2014, the Murray Financial System Inquiry showed that


Banks’ superannuation fee gouge rolls on

By Leith van Onselen There are arguably few better businesses to be in than Australian superannuation. Thanks to compulsory contributions, set at 9.5% of employee wages currently, along with a largely fixed cost structure, the superannuation industry continues to rake it in, earning fat fees on everyone’s retirement nest egg. Nowhere is this cozy arrangement


Labor to block Coalition’s FHB super bribe

By Leith van Onselen In his post Budget speech delivered yesterday, Labor Shadow Treasurer, Chris Bowen, pledged to block the Coalition’s Budget measure allowing young Australians to make contributions into their superannuation for future use as a home deposit. From The New Daily: In his budget reply speech on Wednesday, Mr Bowen said most of


Gotti the rent-seeker wails at modest super reforms

By Leith van Onselen After lobbying incessantly against the Turnbull Government’s modest reforms to superannuation announced in last year’s Budget, Robert Gottliebsen (aka “Gotti) has gone on another rant today against possible further changes affecting self-managed superannuation funds (SMSFs). From The Australian: Let’s hope that Treasurer Scott Morrison stays well away from superannuation changes in


Experts slam Coalition’s super-housing fix

By Leith van Onselen Various experts have emerged to slam the Coalition’s proposal to allow first home buyers (FHBs) to access their superannuation to purchase a home. From The Canberra Times: Paul Keating has dramatically added his voice to those of industry and finance experts warning the Turnbull government against allowing superannuation savings to be used for house purchases, branding the


SMSFs continue to grow in popularity

By Martin North, cross-posted from the Digital Finance Analytics Blog: APRA has released the latest superannuation statistics to September 2016. Total superannuation assets are worth $2,145.6 billion up +7.4% in the past year. Of this, $1,330.5 billion are in entities regulated by APRA, up 8.7% in the past year. Self managed superannuation balances reached $635.9


Labor want tougher superannuation reforms

By Leith van Onselen The Labor opposition has called on the Coalition to implement implement three additional reforms to superannuation concessions that would make the system more equitable and raise significant additional Budget revenue. From The AFR’s Philip Coorey: If the government refuses Labor will most likely pass the government’s package but take its own


Hypocrite Peter Costello whinges about super complexity

By Leith van Onselen Former Treasurer Peter Costello continues to whinge about recent reforms to superannuation, complaining that they have increased complexity which he argues is eroding the public’s confidence in the system. From The Australian: “With growing complexity, extreme complexity, people will shy away from (the super system). And I think they are right


Aussies raid super to pay their mortgages

By Leith van Onselen An interesting series of comments appeared on a recent story on mortgage delinquencies published at Who Crashed The Economy. A person named Sarah, who collects debts for a smaller bank, claimed that the number of people struggling with their mortgage payments, and attempting to access their superannuation early, has surged outside


Mirabile dictu: ATO rules out super-housing fix

By Leith van Onselen Over the past few years, we have witnessed several parties call on the federal government to allow Australians to use their superannuation to purchase their home, including former Treasurer Joe Hockey, Senator Nick Xenophon, “high-rise” Harry Triguboff, and even the Committee for Economic Development Australia (CEDA). In late September, published


SMSF property leverage a ticking time bomb

By Leith van Onselen It has long been my view that 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


The importance of super to retirement is way overblown

By Leith van Onselen The Grattan Institute has released an interesting background paper showing that the importance attached to superannuation as a way of funding retirement is way overblown, with super likely to remain the smallest pillar of retirement income for the foreseeable future: The reality is that superannuation savings account for only a small


The Gotti super rent-seeker spins out of control

By Leith van Onselen Robert Gottliebsen (“Gotti”) has added a new string to his superannuation rent-seeking bow, this time bemoaning that older Australians are being required to actually run-down their tax-free superannuation savings rather than passing them on to their heirs. From The Australian: Younger readers may not realise that once a superannuation fund goes


Super reform is not over

By Leith van Onselen After the Coalition’s ‘triumphant’ backdown on superannuation last week, which has paved the way for reform through the Senate, talk has already turned to the next stage of potential reforms to superannuation. From The AFR: A new law to define the purpose of superannuation could foreshadow the end of tax perks


Pathetic Coalition dumps $500k super cap

By Leith van Onselen The Turnbull Government has caved to pressure from the Coalition right and the Labor Party and dumped the $500,000 cap on non-concessional contributions. From The AFR: In a compromise to be put to the party room for approval on Thursday, sources said the $500,000 cap backdated to 2007 had been removed


Labor continues to white ant super reforms

By Leith van Onselen Ever since the Turnbull Government first announced its superannuation reform package in the May Budget, the Labor Party has run a phony campaign claiming that the proposed $500,000 cap on post-tax contributions was “retrospective” because the start date would be 2007, and demanded that it be brought forward to Budget night