This web page is about the Australian Compulsory Superannuation Levy.
This web page is a work in progress.
as viewed on 01 May 2016, was
27 September 1991
THE SUPERANNUATION TIME BOMB
Addressing the Australian Council of Trades Unions Congress in 1981, the then A.C.T.U. President Simon Crean said, "What we must recognise at this early stage of union involvement in the Superannuation issue is that control over the funds will provide unions and governments with considerable financial leverage to advance the cause of Socialism in Australia."
Irrespective of how they are described, compulsory superannuation schemes are a form of forced saving, with the employers' contributions adding to their costs which, if possible, can only be recovered by higher prices, these passed on to consumers. Employers have complained that the compulsory superannuation levy introduced by the Hawke Government will result in further bankruptcies and discourage investment in new industries. The policy will further economic centralism.
Older Australians will recall how before the Second World War an attempt was made to implement what was called a National Insurance scheme, with contributions from government, industry and individuals. There was a massive national revolt with a flood of protest letters, forcing the Federal Government to drop the issue. The whole concept is straight out of the totalitarian textbooks and has the enthusiastic support of the Fabians and some sections of Big Business.
While there have seen varying estimates of the amount of money the compulsory superannuation scheme will provide, it is certain that within a few years it will run into billions. Some estimates project a total of up to $600 billion by the end of the century. Control of this amount of money, and its investment, will certainly provide the controllers with enormous power.
Under a realistic financial policy, individuals would be able to make provisions for their own future. And a wealthy nation like Australia could easily implement a retiring pension scheme for every Australian that would ensure both security and freedom. Take no thought for the future advised Christ, who clearly had a very different vision from that of those who see finance as an instrument of power. Compulsory superannuation schemes should be rejected before they become a monster.
as viewed on 01 May 2016, was
Desperately seeking strong leadership
March 19, 2007
In a speech to the Global Pension and Investment Forum held in Monte Carlo last month, Keating boasted about the Hawke-Keating government's introduction of the compulsory superannuation levy in 1986.
As a result of the levy "the one trillion dollars of mandated savings has completely turbocharged the Australian capital markets," he said. "You now see Australian institutions roaming the world looking for infrastructure and property deals to feed the growing need for volume and yield.
"Each year an extra $100 billion drops into the lap of the financial investment industry in Australia from the superannuation system. A lot, for a workforce of 10 million, but it has to be invested. This is another factor driving the sophistication of the financial services industry, as it looks for opportunities in Australia and increasingly, around the world."
Keating uses his political status and reputation as a "sound economic manager", which is largely derived from his policy of financial deregulation, to promote an increase in the compulsory superannuation levy on wages from 9 per cent to 12 per cent.
Economically, his compulsory levy is no different to an income tax except that it is managed by fund managers who are richly rewarded instead of being collected at a fraction of the cost by the Tax Office for direct investment infrastructure according to economic priorities derived from democratic process.
If the levy is increased to 12 per cent, this will drop an extra $20 billion a year into the lap of the financial industry in Australia. The money will find its way into an arguably already overheated sharemarket, used to finance the debt component of private equity deals, used as an excuse to put even more pressure on state governments to package social infrastructure such as schools, hospitals and roads as public-private partnerships and create an even bigger surplus for investment in overseas financial markets.
as viewed on 01 May 2016, was
Wednesday, 12 March 2008
Questions without Notice
Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law)
including the matter the shadow minister has raised. As I mentioned yesterday, the Australian Labor Party when in government until 1996 had a proud record with respect to introduction of superannuation in this country. The former Labor government under Mr Hawke and Mr Keating introduced compulsory superannuation, with the initial contribution level at some three per cent back in 1987. That was done for good reason. Up until that time, the retirement income system had a significant element of unfairness. Those who had superannuation over and above the age pension were obviously more advantaged in terms of retirement income than those who did not have superannuation. So the then Labor government took the very long-term and very important economic and social policy decision to introduce compulsory superannuation, initially at three per cent. It is often forgotten that that first three per cent, which is now part of the nine per cent superannuation guarantee, was a direct wages trade-off with employees through the then centralised wage bargaining system. That is often forgotten in the context of this debate.
I do not forget that the then Liberal opposition vehemently opposed the introduction of compulsory superannuation in Australia. The then Labor government saw this as a very important fairness measure to ensure that low- and middle-income earners, workers in retail, hospitality and trucking, did have some extra superannuation to provide additional retirement income. The far-sighted Labor government, under the leadership—
as viewed on 01 May 2016, was
The economy that will confront the next generation
by John Ballantyne
News Weekly, March 12, 2005
One of Australia's best-known and most highly regarded economic forecasters, Melbourne's Dr Peter Brain, delivered a keynote address to the National Civic Council's annual national conference at Melbourne University, on Saturday, February 5.
The federal government's compulsory superannuation levy was designed to improve the private savings pool and expand Australia's capital base. This would help finance a sustainable increase in investment, lift future output and improve living standards for both the employed and the retired.
But quite the reverse has occurred, according to Dr Brain. Since the introduction of the superannuation levy, Australia's savings ratio has shrunk. Increases in wealth have mainly been consumed rather than invested.
In addition, households have dis-saved and borrowed heavily to maintain high levels of consumption expenditure. Australia's household-debt-to-income ratio is now among the highest among OECD countries.
The household sector has absorbed most of the increase in Australia's foreign debt, which now exceeds $400 billion.
A few years back, Dr Brain established the link between the high levels of Australian households' indebtedness and Australia's chronic current account deficit - a link which has recently been acknowledged by Access Economics, a free-market think-tank close to the Liberal Party (News Weekly, February 12, 2005).
Australia's debt-ridden economy is now acutely vulnerable to changes in overseas interest rates and investor confidence.
Dr Brain pointed out that, paradoxically, the huge amounts accumulated by superannuation funds will not necessarily result in more Australians being able to fund their own retirements.
Instead, such is the level of household indebtedness that, when large numbers of the baby-boomer generation start retiring in five years' time, they will be obliged to hand over their retirement pay-outs to the banks just to clear their debts.
With few financial assets left, they will then qualify for the government pension, thus adding to the burden borne by working taxpayers.
as viewed on 01 May 2016,
is included, a graph with the title "Annual personal insolvency activity in Australia", which covers the years from 1986 to 2014, and so, gives an indication over that 28 year period.
In that graph, the number of personal insolvencies in Australia, suddenly jumped, and, doubled from about 10,000 in 1989, to about 18,000 in 1991. Then, after the victims adapted to the loss in income, the rate of deductions increased, and, from 1994, to 1999, the number of personal insolvencies in Australia, went from about 15,000, to about 28,000.
The Australian Compulsory Superannuation Levy is the biggest fraud in the history of Australia, and, is harmful to the working class, and should be immediately abolished, and the balance of the account of each person, should be immediately paid to the person, exempt from any taxation, and, exempt from any fees for the withdrawal and payment of the money. And, the money that has been being paid to the superannuation funds, in the name of each employee; both the "Employee Contribution", and the "Employer Contribution", should be instead, paid to the employee, as part of the wages or salary of the employee, so becoming part of the employee's disposable income.
This web page is authorised and published by Bret Busby, 2 Pelham Street, Armadale.
I can be contacted by email by clicking on the link at Bret
This web page was last updated on 01 May 2016.