Superannuation

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Grattan: Don’t lift compulsory super rate

By Leith van Onselen The Grattan Institute has released a new report, entitled Money in retirement: more than enough, which challenges the conventional view that Australians don’t save enough for retirement, and explicitly recommends against lifting the compulsory superannuation guarantee from its current level of 9.5% to 12%: The vast majority of retirees today and in

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Paul Keating admits his compulsory super system is failing

By Leith van Onselen Last week we blasted former Prime Minister, Paul Keating’s, daft plan to slug Australian workers a 2% to 3% ‘longevity levy’ to fund ‘geriatric’ care for people aged 80-plus whose superannuation savings have run out. Today, The Australian’s Judith Sloan has attacked Keating’s proposal, claiming he has tacitly admitted that his

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Productivity Commission rips into rorting retail super funds

By Leith van Onselen Back in May, the Productivity Commission’s (PC) released its 500-plus page draft report on Australia’s $2.6 trillion superannuation industry, which revealed in all its hideous glory that retail funds’ fees are well above not-for-profit funds: Accordingly, retail funds have delivered significantly lower net returns: The PC also found that reported fees

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MB Fund Webinar – A Super Problem?

This week’s webinar is a focus on the structural problems with superannuation: – How tax breaks are skewed – Superannuation isn’t working at getting people off the aged pension – Problems with superannuation funds in focus at the Royal Commission – Investment opportunities Find out below: Take us on your daily commute ! Podcasts now

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FHB patsies raid $5m in super ahead of property bust

By Leith van Onselen Desperate to keep the East Coast property bubble going, the Turnbull Government last year passed legislation to allow first-home buyers (FHBs) to use up to $30,000 of voluntary super contributions for a housing deposit. The scheme was announced as part of a ‘housing affordability’ package announced in the 2017 Federal Budget.

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Grattan: Labor’s womens super policy more symbolism than substance

Cross-posted from The Conversation: When it comes to the gender gap in retirement incomes, symbolism appears to matter more than actually achieving something. Labor’s plan to add super contributions to government-funded parental leave was heralded by Opposition Leader Bill Shorten this week as having a “big impact down the track”. Our analysis shows it would

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Rice Warner: Compulsory super costs more than it saves

By Leith van Onselen Actuarial consultants, Rice Warner, are the latest group to claim that Australia’s compulsory superannuation system is costing taxpayers more than it saves in Aged Pension costs. From The Australian: The government’s age pension bill will be weighed by dismal ­returns in the bank-run super­annuation “choice” sector, according to a report from

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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

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Let’s make the superannuation system voluntary

By Leith van Onselen After last month calling for compulsory super to be scrapped, The Australian’s Adam Creighton has penned a thought-provoking article espousing the benefits of making Australia’s superannuation system voluntary: On the only occasion citizens were given a chance to vote on something similar to the Australian system, in New Zealand in 1997, more

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Why the superannuation system punishes women

By Leith van Onselen The gender gap between men’s and women’s superannuation accumulation has once again reared its head with Assistant Treasurer Stuart Robert labelling the superannuation bias between men and women “the great inequality”. From The Canberra Times: A parliamentary inquiry into women’s economic security called “a husband is not a retirement plan”… heard

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Paul Keating still dazed and confused on superannuation

By Leith van Onselen Back in May, the architect of Australia’s compulsory superannuation system, Paul Keating, urged the federal government to raise Australia’s superannuation guarantee (i.e. compulsory superannuation contributions) from 9.5% to 12%, claiming it would compensate workers for productivity gains during a period of low wages growth. At the time, I noted that Keating’s argument

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The Australian piles in against compulsory super “vampire squid”

By Leith van Onselen A fortnight ago, Judith Sloan labelled Australia’s compulsory superannuation system a form of “theft”: As the system of compulsory super has developed, it has become clear its two real effects are as follows. First, it forces many people to forgo valuable current consumption — think buying a house, paying school fees

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Should Australia scrap compulsory superannuation?

By Leith van Onselen The Australian’s Adam Creighton has penned a thought-provoking piece arguing to abandon Australia’s compulsory superannuation system in favour of a voluntary system: [The Coalition] needs a policy that boosts real wages significantly today… So just what is this dream policy? The government should make superannuation voluntary. The 25-year experiment forcing people to

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Australia’s thieving compulsory superannuation system

By Leith van Onselen The Australian’s Judith Sloan has penned another article attacking Australia’s compulsory superannuation system, claiming it represents a form of “theft”: As the system of compulsory super has developed, it has become clear its two real effects are as follows. First, it forces many people to forgo valuable current consumption — think

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Ex-Treasury head John Fraser captured by AMP

With AMP’s reputation shot to pieces by the Royal Commission, it has sought to restore its representation by capturing former senior government officials. After recently capturing the chair of the Financial System Inquiry, David Murray, AMP has now has captured recently departed Treasury Secretary, John Fraser: Former federal Treasury secretary John Fraser will join the

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Screws tighten on SMSF mortgage lending

By Leith van Onselen Last month, The Australian’s Robert Gottliebsen warned that the tightening of lending standards pertaining to self-managed super funds’ (SMSFs) property investments threatened severe financial pain to borrowers caught out by the changes: …This is how the scam worked. There are a huge number of unsold, used and new small inner city

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Public scrutiny forces large retail super fund to slash fees

By Leith van Onselen Last week, audited performance data provided to the Australian Prudential Regulation Authority (APRA) revealed that the biggest superannuation fund operated by each of Australia’s four major banks, along with the largest super funds operated by AMP and IOOF, yielded total average annual returns of 2.1% to 3.1% cent in the decade

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Treasury warned on ballooning cost of franking credit refunds

By Leith van Onselen Back in 2000, former Treasurer, Peter Costello, made the fateful decision to allow the conversion of franking credits into cash refunds for shareholders. This enabled tax-free (mostly wealthy) superannuation holders over the age of 60 to claim imputation credits even though they pay no tax, as explained by The Australia Institute:

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Retail super funds’ decade of rorting revealed

By Leith van Onselen Audited performance data provided to the Australian Prudential Regulation Authority (APRA) has revealed that the biggest superannuation fund operated by each of Australia’s four major banks, along with the largest super funds operated by AMP and IOOF, yielded total average annual returns of 2.1% to 3.1% cent in the decade to

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Superannuation not so super for Federal Budget

By Leith van Onselen The Australian’s Adam Creighton has penned another excellent article attacking the cost of Australia’s compulsory superannuation system on the Federal Budget: The superannuation guarantee increases costs to the government, which therefore ­requires a higher tax burden. That’s because the cost of the superannuation tax concessions is greater than the savings to

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PC exposes Australia’s superannuation rip-off

By Leith van Onselen The Productivity Commission (PC) has released its long awaited 500-plus page draft report on Australia’s $2.6 trillion superannuation industry, which claims that five million member accounts are being short-changed, cites excessive fees and poor governance, and calls for substantive reform. Below are the key points: Australia’s super system needs to adapt

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Australia’s super system is a “giant con”

By Leith van Onselen The Australian’s Judith Sloan has slammed Paul Keating’s latest spruik calling for Australia’s superannuation guarantee to be raised from 9.5% to 12%, labelling compulsory superannuation a “giant con”: It is becoming increasingly apparent that Australia’s system of compulsory superannuation is essen­tially a giant con… When it comes to the dependence on

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Paul Keating dazed and confused on superannuation

By Leith van Onselen The architect of Australia’s compulsory superannuation system has urged the federal government to raise Australia’s superannuation guarantee (i.e. compulsory superannuation contributions) from 9.5% to 12%, claiming it would compensate workers for productivity gains during a period of low wages growth. From The AFR: Australia’s business community should back an immediate superannuation

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Compulsory super: a gift to industry paid for by you

By Leith van Onselen Fairfax’s Peter Martin has joined the chorus urging the federal government to abandon scheduled plans to raise Australia’s superannuation guarantee (i.e. compulsory superannuation contributions) from 9.5%: … people who work in the finance industry and the trade union movement and the employer organisations… would get an extra $10 billion a year

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Kelly O’Dwyer: Compulsory super robbing lower-paid

By Leith van Onselen The former Gillard Labor Government had originally legislated for the superannuation guarantee (i.e. compulsory superannuation contributions) to rise to 12% in 2019. However, the Abbott government, which inherited a superannuation guarantee rate of 9.25%, froze it at 9.5% until 1 July 2021 and delayed the scheduled increase to 12% until 1

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Labor urged to hold off raising super guarantee

By Leith van Onselen The former Gillard Labor Government had originally legislated for the superannuation guarantee (i.e. compulsory superannuation contributions) to rise to 12% in 2019. However, the Abbott government, which inherited a superannuation guarantee rate of 9.25%, froze it at 9.5% until 1 July 2021 and delayed the scheduled increase to 12% until 1

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Memo to Labor: Don’t lift the superannuation guarantee

By Leith van Onselen It appears the Labor Party is still considering speeding up the timetable for lifting Australia’s superannuation guarantee (i.e. compulsory superannuation contributions) from the current date of 2025 : Revenue and Financial Services Minister Kelly O’Dwyer warned Labor against meddling with the current trajectory in an environment of flat wages growth. “Increasing