Super Nonsense

 

Not too many with balances over $2 million (courtesy Firstlinks).

The current confected outrage about possible changes to superannuation is more than a little hypocritical.

Most of the noise is coming from the Coalition, who have always had an ideological loathing of compulsory superannuation.

It's hypocritical because they introduced changes to access to superannuation during the pandemic without previously announcing their intentions. The pandemic, of course was not planned, but neither was the current state of the economy post pandemic. If it was OK to change super as the consequence of one unpredicted emergency (the pandemic), why is it not OK to change tax breaks as the consequence of a different emergency (inflation)?

In terms of "middle Australia", whom John Howard claims are under threat if a cap is introduced to super balances, I question how many "middle Australians" have balances over $3 million?

Superannuation, a Labor initiative, is designed to provide an income post retirement, and saves the taxpayer an arm and a leg, and always has done so. It was never intended as a tax break for multi-millionaires, despite that fact that an industry has developed which does just that, and makes a tidy dollar doing so.

I know well the benefits of super, as it is my current source of income. Back in 1971, I had a different view.

When I was conscripted as a teacher in 1969, I had already been a member of a superannuation fund (then called the State Public Sector Superannuation Scheme) for twelve months. As a "bonded" teacher, my super payments were compulsory, as were the contributions of the then Department of Education. Back then, I had absolutely no understanding of the process, so I made no arrangements to cover my compulsory contributions. To this day, I have no idea of what happened to my employer contributions.

The army had its own scheme (DFRB), and I contributed to that from my princely private's pay (about two thirds of what I was earning as a teacher, even with operational loadings). Nothing went in to QSPSS from my army pay, but I continued, under the 1912 act, to be obliged to make contributions.

The result of this was a bill for about $600 (a fair whack in 1971) on discharge. The bill was made up of my owed contributions, together with interest, because the fund borrowed the money to continue to pay them. I had to buy clothes and a car, put a bond on a flat, and the Education Department failed to pay me because they'd lost my file during the two years I was in the army.  

At that point I began to understand how superannuation works.

I understand it much more clearly now.