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Increasing the Superannuation Guarantee would be a smart move

Nothing exemplifies better how totally lacking in judgement the Coalition is than the superannuation saga.

(Ok, maybe their determination to exacerbate climate change, but that’s another story albeit very similar in its short-sighted ignorance.)

In the brief moments between discussing dual citizenship and Gestapotato’s latest bid to make us all scared, they sometimes remember we have an aging population.

Their plan to deal with this is to make most of us work until we are 70 and to protect the wealth and tax concessions of rich old investors.

Scomo tears at our heartstrings about all the nanna, nonna and yanni investors who would miss out on their yearly gift from the government if Labor took away their excess franking credit returns.  Unlike the Low Income Tax Offset, which can only be used to offset tax you owe – no tax, no benefit.

(I also didn’t hear any concern when they took away the Schoolkids Bonus which was an enormous help to families trying to get kids ready for school just after Christmas.)

Getting back to superannuation….

Having adequate superannuation gives workers who haven’t had enough disposable income left over to buy multiple investment properties or extensive share portfolios a chance to have some quality of life in their retirement.  It also reduces the reliance on the aged pension.

So why do the Coalition fight so hard against it?

Compulsory national superannuation was initially proposed as part of the 1972 Whitlam initiatives but up until the 1980s superannuation was solely the privilege of predominantly male professions, clustered in the public sector or available after a long qualifying period in the private sector.

In 1985, a deal struck between the government and the ACTU saw the trade union movement forfeit a claim to 3% productivity improvement as wages to instead be paid in compulsory superannuation – endorsed by the Arbitration Commission and managed by superannuation funds with equal representation of the unions in the industry and the employers.

As usual, the leader of the Opposition, John Howard, saw it as an evil union plot.

“That superannuation deal, which represents all that is rotten with industrial relations in Australia, shows the government and the trade union movement in Australia not only playing the employers of Australia for mugs but it is also playing the Arbitration Commission for mugs”.

The 1996 election saw Howard promise to match Labor’s plan to gradually increase superannuation to 15%, only to dump it six months after the election.  Despite fighting tooth and nail every step of the way, they were unable to halt the rise to 9% by 2002, thanks to the Senate.

The Howard government despised superannuation. The idea that organisations of working people should manage large sums of money in the economy was anathema to it.  The rich wanted a piece of the action.  So, in 2007, the Coalition made changes that turned superannuation into a tax minimisation scheme for the wealthy by allowing people to invest up to $1 million in super and take the benefits tax free.

To this day, they still resent and regularly attack industry super funds despite the fact that they continually outperform the retail funds.  They don’t want workers’ organisations benefitting from the scheme they set up.

When Labor won government, they reintroduced the gradual rise in the SG but only got to 9.5% before the Coalition nixed it again.  This supposedly temporary freeze, unlike the temporary freeze on politicians’ wage rises and the temporary budget repair levy, seems to have turned into permafrost.

Any suggestion that increasing the SG would be an imposte on employers is not borne out by the facts.  Small business has already had a tax cut and have benefitted from instant asset write off and reduced penalty rates.  Unit labour costs have been stagnant or falling while company profits are soaring to record highs.  But none of this has led to wage rises.

If the Fair Work Commission and government refuse to legislate for pay rises, and with the unions largely blocked from the negotiating table and hobbled in the action they can take, increasing the SG, and the penalties for not paying it, would be a good start on forcing companies to give the workers a share of the wealth their labour creates.

 


28 comments

  1. Jaquix

    Superannuation has changed the retirement years of many Australians, including myself. But I’m in 2 minds about increasing the super contributions at the present time. For lower paid workers, it takes a little more more out of their pay packets, for very little return many years down the track. Use of super to get together a little nest egg that supplements the pension, is a good goal. Howard changed the face of superannuation so its original intention was hi-jacked, by, yes, you guessed it, turning it into a tax haven for the rich. It still is, though curbed slightly. I would rather see super accounts receive better conditions – like ensuring employers cannot ever not pay their workers. And make life insurance an opt-in matter, at least until a certain age, if at all. Younger people who work as casuals in 2 or 3 jobs, need to be made aware of their accounts, and take some ownership of them. At present I think its all “too hard” and they just dont realise its importance.

  2. Kaye Lee

    Jacquix,

    The SG doesn’t take anything out of workers’ pockets. It is on top of your gross wage, not taken out of it. I agree people need wage rises and we must increase Newstart, but how do we make employers pass on a share of their profits?

    Increasing the SG is not the only thing we have to do but it would help.

  3. RosemaryJ36

    If business was required to pay an increased super contribution without reducing the actual income, it could claim the extra amount against tax. The other move the government should take – but almost certainly won’t – is to cap the amount corporations can claim against tax for managing their tax affairs. At present, tax accountants receive massive payments which should be going into tax receipts. A last change urgently needed, and easily effected with electronic transfer is to pay superannuation contributions on pay day not quarterly. That way the employee earns interest in the super fund rather than the employer boosting profit by keeping the interest!

  4. Keitha Granville

    I have just been notified by my employer that the ATO will now be informed on a weekly basis of how much tax we have paid, and much super has been paid by the employer. We can access this information ourselves through MyGov.

    Perhaps the ATO is doing this to every employer so that all it can see employees are receiving the correct wages and super ? I would like to think this is the case

    for the record: my employer has always paid the award rate for the job, and the applicable super.

  5. Matters Not

    There’s any number of ‘lurks and perks’ made available re taxation arrangements including for those in their retirement years. Unfortunately, it makes it very difficult (impossible?) to plan for one’s retirement.

    Politically speaking, it’s this doubt, that will extract a significant political price. Where will Labor draw the line? And what ‘principles’ (if any) will be cited. Take ‘dividend’ imputation as an example. Initially, Shorten announced with much fanfare that’s the policy had been well thought through and all all of those who paid no income tax would be ineligible to claim a cash return via dividend imputation. That well thought through policy was hastily abandoned – with all pensioners being exempted. Not a good look. No grandfathering – just an embarrassing reversal.

    What’s next? Why should superannuation income be tax free? Why should the sale of the family home receive such special treatment? Capital gains on investment properties?

    So many opportunities to exploit doubts and fears. Is Shorten to be trusted? Polling suggests he has some problems.

  6. Kaye Lee

    Rosemary,

    Good suggestions. I would add capping the amount one can claim for supposed self-education conferences etc. In my business, the annual conference is always in some magnificent holiday destination overseas. It doesn’t have to be but because it is claimable, that’s what they do. I have never attended the overseas ones because I have other commitments that keep me here – like running a business.

    Although I must say, weekly reporting would tip me over the edge. As it is, I have to do monthly business activity statements. I suppose I could set up some sort of payroll software for my few employees but I am already struggling with the constant demands imposed by the government. I pay super monthly rather than quarterly for the reason you pointed out, so my employees get the benefit.

  7. Stephen Brailey

    Nice…

  8. Mattters Not

    Limiting the amount claimable for tax advice is already on Labor’s radar. Even dollar amounts for individuals are on the table.

    Seems to me that there needs to be a set of overarching principles. (Yes I know, it’s not the be all and end all but there needs to be an umbrella – at least for political purposes.)

  9. Zathras

    Throughout my entire working career I watched successive governments “move the goalposts” and any long-term decisions made one year can be cancelled 12 months later.

    The original purpose of superannuation has changed considerably and it’s proving impossible for politicians to keep their hands off that growing pile of money.

    Like their corruption of the NBN and Medicare, the Superannuation Guarantee was something for the Liberals in particular opposed.

    Most of the current tax benefits for retirees were the legacy of Howard and Costello, who would buy your votes by using your own money and now it’s left to successive governments to claw back some of that largesse.
    It’s proven too politically risky for some to pursue so they’ve opted for the strategy of throwing even more taxation money at the wealthy instead.

    Although not trumpetted loudly in the media, sneaky superannuation changes are slipped in at each Budget and most go unreported.
    A recent one is that if you die, your super pension fund can still be transferred to your spouse tax-free, but if it’s left to children it can now be taxed rather heavily under certain circumstances.

  10. Florence Howarth

    Perfect time to raise contributions from govt & employer. Maybe taking it to optimum 15%

  11. Florence Howarth

    Industry super produces wealth that workers have control over. This what the Coalition hates.

  12. Florence Howarth

    Zathras no govt can legislate for more than its term. From what you say, this government has reintroduced death duties. They hate seeing the little man leave anything behind. Demands that they use what has taken a lifetime to amass before getting government assistance in their old age. The money they have during their lifetime paid tax on.

    Same goes for all benefits from Newstart up. In reality, means those with uncertain jobs will lose all they save, each time they become unemployed, sick or disabled. Not allowed to keep safety net that savings give.

    Do you have a link for that change.

  13. Matters Not

    Yes Zathras there are significant anomalies in the way ‘wealth’ is transferred to offspring. Again, the family home receives very special treatment apparently. No wonder the housing market is so distorted.

    But no side of the politicical aisle is prepared to engage in serious political reform when it comes to the ‘family home’.

  14. Kaye Lee

    Florence,

    My son was in full-time employment and saving up to buy a car. He had to have an emergency operation which caused him to stay in hospital for three months. Because he was employed by a labour hire firm, to do a government job I might add, he had no sick leave or job security so had to quit. Because he had saved about $12,000 he had to wait three months for any Newstart payment. Because he wasn’t on Newstart, he got no medical concession card. His first pharmaceutical bill was over $600.

    How many ways can they screw him was my thought.

  15. Kaye Lee

    Florence, re the tax on super death benefits…..

    “if your adult children inherit your superannuation lump sum (if you outlive any spouse or partner) they will pay 15% tax on the taxable component of your superannuation, which for many people will mean 15% tax on the entire superannuation balance. If you pass away with say $200,000 this will mean paying up to $30,000 in unnecessary tax to the ATO”…apparently there are ways around it if you consult financial advisers….what a surprise.

    http://www.ajfp.com.au/2014/08/22/will-your-heirs-pay-tax-on-your-inheritance/

    https://www.ato.gov.au/super/apra-regulated-funds/paying-benefits/paying-superannuation-death-benefits/

  16. @RosemaryJ36

    I do not run a business but I do use internet banking and make regular payments, both for services and for charity donation, which are set up to occur automatically. I suspect that the software used for salary payments is similar and could be used to ensure superannuation payments are made as frequently as salary payments.

  17. Kaye Lee

    Rosemary,

    I am sure big businesses could do that easily. I have four employees and they prefer to be paid in cash from the till takings (all 100% legit and recorded) so we don’t have regular electronic payments set up or an online payroll system. I expect many small businesses are the same. We also allow them to vary their hours as they need to so wages change each week which precludes any sort of automatic payment. They are also in different super funds, as is their choice, so require separate payments. It would not be an insurmountable hurdle to change our system but our employees like things as they are. Reconciling and paying once a month is onerous enough without having to do it weekly. The superannuation guarantee rules also apply to monthly earnings so there would be problems if someone earned less than $450 in a month.

  18. Zathras

    Florence,

    I was told about this by a financial adviser as well as steps that can be taken to minimise it as Kaye has mentioned.

    Here’s an overview – http://moneymag.com.au/avoid-super-death-tax/

    It was certainly a sneaky move that slipped under the radar and most retirees are probably unaware.

  19. Kaye Lee

    Alan,

    I listened to and read your links. I am getting heartily sick of MMT because it involves many people saying the exact same thing over and over and over and over like a mantra. Proponents need to move past the same old sayings and onto addressing people’s questions – something that rarely happens in my experience of years of asking. You just get told the same old stuff – the government is not a household, gold standard, sectoral balances, productive capacity. MMT has potential but it sounds like the ideological mantra spouted by Young Liberals – I learned to repeat this stuff but I cannot talk outside the oft-repeated slogans. I can’t count the number of times I have asked about the effect on the exchange rate to the sound of chirping crickets. MMTers also refuse to acknowledge that to indulge in the unlimited spending they say is “just the way the system works” would require legislative changes. It is NOT the way the system works now.

    But ignoring MMT for the moment….

    Steven Hail said “In theory, the Hawke/Keating and Howard/Costello private superannuation system might still have been helpful if it had directed savings towards funding investments, which caused productivity growth and encouraged a more rapid transition to ecological sustainability.”

    That is exactly what is happening. Not perfectly, but increasingly. Members (and shareholders for that matter) are putting pressure on for more ethical sustainable investments.

    He also says “The Government will not and cannot be bankrupted by the financial cost of providing a state pension to the elderly.” Superannuation is intended to give retirees greater income than that state pension, either supplementing it or replacing it.

    Hail says superannuation “has done precisely nothing to add to social provisioning for the aged.” Ask any person who is receiving superannuation benefits and they will tell you just how much crap that is. It makes a huge difference. Hail will say provisioning is only limited by available resources. Nice theory. Not our current reality unless we choose to move towards communism.

    The article by Dr Cameron K. Murray is naive and childish. Sounds like something the IPA would write.

    I do agree that low income earners and the unemployed need more disposable income. That is another battle.

  20. Kerry F

    “I do agree that low income earners and the unemployed need more disposable income. That is another battle.”

    I don’t agree its another battle, it IS the battle. Or should be.

    Compulsory super has already created a wealth divide in this country and it has stagnated wages. Big business finds other ways to avoid tax but small to medium business have to absorb the costs without other ways to offset. You are probably unaware that small business lost deductions for fringe benefits in the late 80’s just before super came in. Double whammy!

    I find it interesting how people talk about super as an “entitlement”. Business is the private sector, love it or hate it, business creates jobs and is not an unlimited a cash cow for workers. In truth super is yet another scheme that benefits the already well off. While self funded retirees who still receive a partial or full pension take that extra trip overseas millions of Australians can’t afford their rent and struggle to exist on the same or less than the aged pension.

    Government employment with its guaranteed super is life in a bubble. Super from large corporations is similar. Super for small business and low income earners is a bad joke.

    Also I think this article ignores the issue of the corruption in the super investment industry.

    A job guarantee or UBI and decent pensions would be a far better move than increasing super in my opinion.

    People forget that Super in government jobs is paid for by all of us to benefit the few.

  21. Zathras

    Government employees (including politicians) have ALWAYS been forced to pay Super – typically 5% – and the original Commonwealth Super Scheme was a “defined benefits scheme”. The hope was that in return for lower wages during their working life (compared to the private sector) retired Public Servants should be seen as slightly better off than average pensioners – although they were really paying for their own pensions via salary deductions while also paying everybody else’s via tax.

    However, many Public Servants have likely been migrated into accumulation schemes due to contracting and other changes.

    Latham forced Howard to deny future politicians access to the CSS so they are in the same financial boat as the rest of us, except they can probably access their Super much earlier.

    Because of the reduction in the number of new public servants coming in to keep the coffers topped up (and some economic mismanagement by Costello) Telstra was sold to create the Future Fund which guarantees ongoing payments to retired public servants (and politicians).

    Therefore Super in government jobs is not funded by taxpayers, although all taxpayers have been ripped off via privatisation.

  22. Kaye Lee

    Kerry,

    I agree that increasing wages and welfare payments is more important. If I wanted to say one thing was the THE battle, I would choose climate change as the highest priority.

    Untaxed fringe benefits was a rort that needed reining in. Buying all of your family members a car for example.

    I don’t see how compulsory super has added to inequality. It gives an opportunity for ordinary working people who have been unable to save or invest to have an income higher than the aged pension. The system as it stands does discriminate against women who often have broken employment though there seems to be some movement to address that. The treatment of voluntary contributions has favoured the wealthy but the compulsory employer contributions have been good for the ordinary worker.

    Not sure about the SG leading to wage stagnation either. Wages have stagnated over the last four years, not when the SG was being increased.

    As for small business absorbing the costs, the vast majority of small businesses don’t employ anyone. I usually employ three people with weekly gross wages of about $2500. To increase the SG from 9.5% to 12% would cost me $62.50 a week which is tax deductible. It would make very little difference to me but a significant cumulative difference to the retirement savings of employees.

    And big businesses are making record profits, which have been increasing by about 20% a year. Increasing super, which they MUST pay, at least claws back a small share of those profits to the worker.

    I am yet to hear of any corruption in the industry super funds. We shall see.

    A job guarantee or UBI sound like a good idea. How likely do you think they are to happen any time soon? We have to try for things that are achievable, moving forward in increments.

    Zathras has answered the public service question. The defined benefit system no longer applies. It changed in the 80s or 90s I think.

    Many workers used to get no super. Now they get some. Surely that is a good thing?

  23. Marcus

    Kaye,

    I have followed your work for some time and you have done many great articles, but on this occasion I disagree with your conclusion and will have to follow-up with a more detailed response as to why. For today however I want to express my disappointment on a number of your follow-up comments.

    Firstly, it is sad that you discount MMT and are “heartily sick of it”. I suppose I should at least be pleased you have heard of it, but to suggest it is “something like an ideological mantra expressed by Young Liberals” not only reflects an obvious lack of knowledge on the topic, but is also completely wrong. Neo-liberals in general and LNP in particular, strongly fight against MMT every day as it goes directly against their vapid ideology to dismantle government and all but enslave people to the whims of the market and the wealthy. I should add a “Job Guarantee” which you liked the sound of, is a core policy response espoused by MMT so maybe it is not all bad?

    Secondly, to dismiss Steven Hail as “moving towards communism” also does not reflect well, and totally flies in the face of the tireless work he has been doing to educate people on economics and transform the political discourse. Then to go on and indicate Cameron Murray as “childish” and “naive” is also not becoming. Cameron wrote his PHD in economics on systemic corruption in the housing market, politics, and superannuation, has written specifically on these topics, and quite frankly is an expert on these areas. To suggest he is in any way, affiliated with the IPA or their perverse ideology borders on insulting, and I would strongly suggest highlights your lack of knowledge, and frankly I expected more of you.

    Hopefully next time you will more carefully consider your responses or at least look into something first, before condemning it or dismissing it out of hand.

    Regards

    Marcus

  24. Kaye Lee

    Marcus,

    That is fair criticism and I agree I was too grumpily dismissive. I would like to try to explain why.

    So many articles end up as discussions about MMT even when they have nothing to do with how a government funds its expenditure. Everyone who mentions it assumes others know nothing about it so say the same phrases over and over which is frustrating. They also say things which aren’t true under our current legislation and refuse to accept that regardless of all evidence.

    I do understand the potential of MMT and largely agree with the concept. But proponents must be prepared to answer questions like how exchange rates would be affected. They have to marry up their theory with our current reality. They say it is how the system works now but it isn’t. It could be – for example, the reserve bank could buy our government bonds and take no interest, but they don’t. We could just credit an account at the RBA with a nominal amount, but we don’t. They also confuse the issue by, instead of saying expenditure is not constrained by taxation revenue, saying that taxation destroys money. I can understand the concept that it removes it from circulation but it is credited to a government account at the RBA. Also, the RBA has a very strict overdraft policy for government expenditure which does not fit with the MMT assertion that they will cover any government spending.

    I understand the significance of being a sovereign currency issuer but it is not the RBA that controls that as is so often said. They decide when we need more cash which is an entirely different (and insignificant) matter.

    I assure you, I have looked into MMT at great length. I have read the articles and links, watched THAT video that everyone links to, and asked many many questions over the years. I cannot see our government working that way any time soon so we work with what we have. That is not to say stop having the discussion, but be real about it. Why has no sovereign currency issuing nation embraced it? What are the down sides?

    Anyway, I hope that explains a bit better and I do apologise for showing my frustration.

  25. Marcus

    Hello Kaye,

    Thanks for responding to the concerns I raised, and I can fully understand frustration with our current system of government and economy. I have to temper my anger every day as I look around and see how we have allowed neoliberal ideology to trash our country while siphoning massive amounts of money to donors and the financial industry to maximise their profits.

    As an MMT advocate it is fair to point out our current laws are not aligned with how the monetary system works…why would they be? After all not only are we run by a bunch of economic illiterates who have no idea what they are doing, but a fiat currency system is actually a relatively new phenomenon. In Australia, it is only in 1983 that we ditched the last vestiges of a gold standard system, when we finally enabled a floating exchange rate. However, this is a failure of governance not because MMT “wont work”. It should be noted for example, the previous head of the RBA Bernie Fraser, is on record indicating a government is “not like a household, and has to live within their means…is nonsense”, for reference: https://www.youtube.com/watch?v=6FbUvA5mLlA

    All the laws and regulations you rightly point out do exist however, but can also be changed…acknowledging this will take time. On one positive note, thanks to the Greens we have at least abolished the utterly ridiculous and unnecessary “debt cap” that used to be in place, even though no-one really understood why it was stupid…but a win is a win.

    As to the question why we don’t have any standout examples of MMT in action…given you yourself often write about the corruption and sheer stupidity of much of the vapid ideology that passes for public discourse and policy-making, I am betting you can answer that one yourself? Why do people actually vote for the LNP? why do we have no action on Climatechange? why do we have a second rate NBN, because “we cannot afford” a real one? As one of the richest countries on earth, why do we have homeless in the street?

    It should be noted however, although there are no clear-cut examples of being run in alignment with MMT, obviously many Govts realise the reality of having a fiat currency…for example, where did the Trillions come from to “bail out” the banks during GFC? were taxes raised first…NO. Did they just “keystroke” billions into affect to get the outcome they wanted…YES. Here is then head of US Fed, Ben Barnanke talking about the bailouts: https://www.youtube.com/watch?v=U_bjDAZazWU

    Another good one is a few years earlier, then Fed Chair Alan Greenspan, talking about funding social security in a senate hearing: https://www.youtube.com/watch?v=DNCZHAQnfGU

    So, I would argue many current governments are already applying MMT principles…there are just not honest about it. Just in Australia as one example, once a Bond has been authorised, spending can occur before the bond has even been sold…why? because they know it doesn’t matter, and the bond is actually unnecessary. It benefits the rich elite to keep the people thinking they cannot “have nice things” because we “cannot afford it” even as they re-direct billions in handouts to their benefactors. Its called lying.

    I could go on at length and would be happy to have a conversation at any time you are ready, but will make two final points. Firstly, in regard to your question about exchange rates, I would like to make two points:
    1.There should be no one who can make an accurate prediction on what would happen…because no one can. In trading parlance exchange rate trades are called the “widowmaker trades” as rates are notoriously hard to predict, anyone who says they can is either a fool, or lying.
    2.IF they change, so what? what difference does it make? Thats the beauty of a floating system, it is free to move over time. If it goes down (as I usually get from people questioning MMT) our currency is cheaper and exports go up placing upward pressure on exchange rate. However I would argue why would it go down? no mechanism or logic to connect increasing public expenditure to lower rates at all, if anything likely to go up as economy stimulated, as rates tend to follow demand.

    Lastly, the downside of MMT as I see it is actually quite simple. Fundamentally MMT only describes how the monetary system works…it is neither “left” or “right”, “good” or “bad”, like gravity it just is. It is no magic bullet, no “magic wand” or formula for endless riches…like anything the full potential of MMT can only be harnessed by mature debate, representatives who actually care about the people, and a robust system of checks and balances…just like our current system. The great strength of MMT however is that it completely changes the dynamics, and moves the debate from “can we afford it” to “why are we doing it” and “what do we expect to achieve by doing it”.

    Regards

    Marcus
    PS: I am curious to know about the mystical “THAT” video, if you happy to share the link.

  26. Kaye Lee

    Please stop with the gold standard and not like a household stuff. That is exactly what causes my frustration. The same over-explaining every time. (Not your fault but you do all repeat the same stuff that we all already know)

    I have suggested before that quantitative easing was an example of using MMT and I was howled down. I appreciate you realise that our legislation would have to be changed regarding the RBA.

    I have also said many times that bond issuance was unnecessary and I was told it was to control the overnight interest rate but surely that is the trading of them rather than their issuance and could be achieved by the RBA offering interest on overnight deposits. Bonds are just a secure return for investors to park their money. Our government chooses to issue bonds equivalent to their deficit spending. That’s how they account for it. It could be accounted for differently.

    I know it is difficult to know how much the person you are talking to knows but we have been discussing this for years here. I am not against MMT. I just need my questions answered and I so often get different responses where we end up arguing about peripheral issues rather than the potential.

    PS video https://www.youtube.com/watch?v=qBpm5sVmGYc

  27. Kyran

    With respect, you left out all of the wonderful work Ms Kelly is doing. Well, kinda, sorta. Until they change their mind again, that is. Given their wibble wobbling, flippy flopping to date, it should be any minute now.
    They shored up the RC stance on superannuation in the terms of reference.
    “According to the draft terms of reference, it can examine any fund that employs “members’ retirement savings for any purpose that does not meet community standards or expectations or is otherwise not in the best interest of members”.
    That has been widely interpreted as yet another attack by the banks on the not-for-profit funds which, for the past quarter of a century, have consistently outperformed the retail funds run by the banks and insurance companies.”

    http://www.abc.net.au/news/2017-12-04/verrender-banking-royal-commission-could-be-superannuation-sting/9221798

    That little theory was already going pear shaped with the subsequent revelations in the RC. Our intrepid warriors against corrupt union funds didn’t think the corporate funds were corrupt, obviously. Not as good for their members, ok, but at least they weren’t as corrupt as those union funds. So the government snuck this into their budget gifts for the corporate sector.
    “”The Government will change the annual audit requirement to a three-yearly requirement for self-managed superannuation funds with a history of good record keeping and compliance,” it states.
    According to the budget papers, it’s all about reducing red tape for the trustees of self-managed funds.
    A seemingly minor detail among hundreds of pages dripping with billion-dollar policy shifts, it was a change that escaped the army of commentators assembled in Parliament House last Tuesday to grill Treasurer Scott Morrison on the details of his third federal budget.
    It was an odd decision for two reasons. For a start, big, professionally run funds still must be audited every year. And then there’s the timing.
    Just two days later, on Thursday, a different mob, and an angry one at that, gathered at Melbourne’s Grand Hyatt on Collins Street baying for blood.”

    Oh dear. Oh no. Could our government have gifted a ‘removal of red tape’ to a company just found to be a tad corrupt? Oh dear, it wasn’t AMP was it? But how much business do they do in that sector?

    “Perhaps it is just an unfortunate coincidence. But in the past six years, AMP quietly has made a concerted push into the self-managed superannuation fund sector, and now is the biggest operator providing administration and a raft of other services.”

    http://www.abc.net.au/news/2018-05-14/budget-cuts-audit-requirements-of-self-managed-super-funds/9756796

    Ok, that’s a BIG oopsy. The biggest operator just happened to be the biggest crook (so far?). In Ms O’Dwyer’s defence, how could they have known a bank would be corrupt? They didn’t even think a RC was in order. Ah well, there was never going to be such generosity shown to the employee side of superannuation. It was kiboshed before the budget. Pre budget, 4th April, Ms O’Dwyer did a Dutton, arguing against her own argument.
    “Kelly O’Dwyer has argued that increasing compulsory superannuation to 12% would hurt low-income earners because it would exacerbate sluggish wage growth.
    The comments by the minister for revenue and financial services on Wednesday strongly suggest the Turnbull government will continue to freeze super contributions at 9.5% in the May budget.”

    “O’Dwyer said the super guarantee does not benefit low-income workers.
    “Far from it,” she said. “In fact many low-income earners are being forced to save for a higher standard of living in retirement than they can afford while they are working.””

    ““And this is before you take into account the detrimental impact that the super guarantee has on an individual’s wage,” she said, citing the Henry tax review’s findings that employers give lower wage rises when required to increase super contributions.”
    Naturally, there was some dissent.
    “The Australian Council of Trade Unions assistant secretary, Scott Connolly, said at 9.5% super “people are not able to save for retirement adequately and are denied the basic right of a secure and dignified retirement”.”
    And some agreement.
    “The Australian Chamber’s acting chief executive, Jenny Lambert, told Guardian Australia that workers “will be far less likely to see a return to higher wage increases if increased labour costs are diverted into superannuation”.”

    https://www.theguardian.com/australia-news/2018/apr/04/kelly-odwyer-says-superannuation-increase-would-worsen-wage-crisis

    All of that malarkey might have worked if recent history wasn’t so conclusive. There has been no wages growth in the past five years and super contributions have also been static. The government and the employers are saying you can have one or the other. If employers haven’t had to shell out for increased super for the past few years, why haven’t wages gone up? And if super funds aren’t getting bigger contributions now, how can they expect a decrease in reliance on the aged pension when these people retire? Presumably, they won’t announce the retirement age will be moved to 90 until after they next win government.
    But here’s where the genius of Ms O’Dwyer comes in. Remember the cash economy we got rid of when the GST was introduced? Well, they mean it this time.
    ““The black economy undermines community trust in the tax system, gives some businesses an unfair competitive advantage, puts pressure on margins of honest businesses, and often includes exploitation of vulnerable employees through the underpayment of wages and loss of entitlements,” said Kelly O’Dwyer, the financial services minister.”

    https://www.theguardian.com/australia-news/2018/may/08/australia-federal-budget-2018-cash-payment-crackdown-tax-evasion

    You see? Everybody is so worked up about this super bull shite, they haven’t figured it only applies to people who are being paid legitimately. Searching ‘unpaid work in Australia’ is eye opening, as it reveals the internship, traineeship, cadetship, commission only and attendant scams. Then there’s unpaid overtime, for those who do have a job.
    “”Across the economy, we found about $116 billion worth of labour time each year is uncompensated,” Dr Stanford said.”

    http://www.abc.net.au/news/2017-02-21/workplace-culture-driving-rampant-unpaid-overtime-experts-say/8287376

    And that’s before you start on that wonderful little scam, compliments of Mr Howard. When he brought in the GST, he introduced the Australian Business Number, so unincorporated subcontractors could claim GST expenditure on their BAS. This was quickly utilized by employers to claim their staff weren’t staff, they were subbies. It was rife in the security industry ab initio and has grown exponentially throughout many industries, particularly in the casual work force. This is in contravention of the 80/20 rule and not only negates super, but significant PAYG tax, workers comp and annual/sick leave obligations.
    It’s ok though, Ms Kelly is all over it. She has announced an amnesty on employers who may have missed their super obligations.

    https://www.accountantsdaily.com.au/tax-compliance/11705-calm-before-the-storm-govt-proposes-12-month-sg-amnesty
    That’ll learn ‘em. It’s only a minor flaw in the thinking that an employer who has ignored their legal requirements will suddenly take up the cudgel ‘cause she’s asking nicely! If they were breaking the law before, why would they stop now?
    Then there’s the 7/11, Domino’s, Caltex, etcetera examples of franchisee’s who rip off their staff. They don’t even pretend to chase them. But at least there’s a senate enquiry.

    http://www.abc.net.au/news/2018-03-29/franchisees-hope-senate-inquiry-will-stop-bad-franchisors/9601204

    Ok, that isn’t going too well.

    https://www.theguardian.com/australia-news/2018/apr/23/franchisees-say-they-dont-dare-tell-inquiry-about-problems

    It’s even worse when a big employer doesn’t pay their staff.

    https://www.theguardian.com/australia-news/2018/may/25/australian-red-cross-owes-20m-in-back-pay-to-current-and-former-staff

    Nah, everything’s good. Ms O’Dwyer keeps telling us so.
    Good luck keeping your sanity with this mob in charge.
    Thankyou Ms Lee and commenters

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