Tim Ferguson writes: Excellent piece from Robert Lechte (“Superannuation doesn’t need reform — it needs replacing”). Super hasn’t worked for us, a middle-aged couple who worked and raised a family for over 25 years while wondering what improved flavour of baked beans we will be eating on our 50th wedding anniversary. Our super has definitely worked for others though.
It is so disappointing to watch our society greedily devour each other’s hard-earned wealth over the past decades. We are better than this — at least, I used to think so.
Lindsay Leake writes: I am an 82-year-old pensioner, own my home and car, have some cash in the bank and am living comfortably. I have never liked the concept of superannuation, considering it to be lower-middle-class, biscuit-tin economics, where there are biscuit tins on the mantlepiece with labels designating which expense the woman of the house has to meet, and when dad comes home he hands over his pay packet and is given a small allowance.
The concept that a sophisticated society is where everything has to be privatised is being seen as unworkable. We need to insist on having governments that govern for the good of the people and not rely on ideology dreamed up by people who believe in fairies — or worse, crooks.
Penny Hackett writes: The superannuation system was supposed to minimise the cost of the age pension. Instead it has become a tool for intergenerational wealth transfer, supported by a massive subsidy from the taxpayer. It’s a boondoggle. It would be fairer and less costly to give everyone the pension, give rent assistance to those who don’t own their own home, and let the income tax system sort out the rest.
John Neuling writes: What a nonsense article. Our super system is designed to complement the age pension and allow all workers to retire with some comfort and dignity, and once contribution levels reach 12%, and a large proportion of the population have had super for most of their working lives, this goal should be achieved. Issues regarding the underprivileged should be addressed separately by the social security system, and do not provide any reason to dismantle a great retirement scheme, now holding more than $3 trillion in assets for Australians.
Richard Davoren writes: I had the potential to do well out of super; for a public servant on the “old” scheme, the retirement benefits were attractive. The downsides emerged quite early in my career. I was constrained to remain with my employer or lose my benefits. So I was saddled with a restricted future. As time passed I saw many financial opportunities and, eventually, I cashed in my superannuation to invest in real estate. At that time Paul Keating took a 15% slice of my funds. Obviously a tax intended as a disincentive to draw cash.
I made the right decision in hindsight. But my wife’s maiden aunt cashed in her super to pay a house deposit in retirement and forever remained in poverty, whereas she would have done far better had she not taken the cash. My wife had compulsory super taken out, and well before she retired was advised that the government super scheme’s opt-out insurance policy had sucked her balance dry during her non-employed final years before the super could be drawn on.
Improved wages would be better overall for individuals and the economy, with superannuation to be a choice taken only by informed investors. A better pension scheme for the not-so-wise would have more merit and fewer dramas.
Richard Clements writes: I have said this for years. It’s the biggest con foisted on Australians since the Vietnam War. All it did was create a superannuation industry that has skimmed billions of dollars from people’s policies. It’s a tax haven for the super rich and there is no guarantee — like in 2008 when some people lost almost half their super overnight with the sharemarket crash. The average payout on retirement is about $200,000, which means you can’t live off it and have to go on the pension for which the whole fucking thing was designed to prevent! Give me strength.
Jim Moore writes: Lechte is persuasive (and prolific) but ultimately misguided. Superannuation doesn’t cause inequality; it merely mirrors inequalities that exist, and which exist for myriad reasons. Inequality is better addressed by tackling those reasons than by targeting superannuation as some sort of panacea. You can’t solve housing affordability by allowing fund members access to their savings to contribute towards buying a home, and you can’t address the other issues raised by Lechte by tinkering in other ways with the superannuation system.
In some ways Lechte’s argument is a throwback to the same arguments in the lead-up to the introduction of the superannuation guarantee system in 1992. Then, if I recall correctly, ACOSS argued that the system was inherently unfair because it allowed some people to put more money in (in absolute dollar terms, not per cent of income terms) and to get more out at the end.
To suggest the system is flawed because some people do better out of it than others is a mad argument. If you work in an office, look at the person sitting next to you. They may have more or less than you in their superannuation fund, and they may as a result enjoy a better or worse standard of living when they retire. That’s not a failure of the system; it’s because they earn more or less than you do or because they make greater or lesser contributions to their funds.
Inequalities in society can be addressed by mechanisms to pool and redistribute wealth, such as the age pension. If the age pension (or other such mechanisms) is inadequate for this purpose then it is those things that should be changed, not the superannuation system.
Margaret Ludowyk writes: Lechte claims that our compulsory super scheme is a disgrace and should be scrapped. He bases this on the failures of the scheme at the bottom and the top end. I agree. Super should not be used as a wealth creation vehicle for high-income earners, and those on low incomes and with little super need more support. But for most of us in the middle, compulsory super is fantastic, enabling us to retire with dignity and security.
As a divorced woman, I worked until just short of my 70th birthday and retired with my modest townhouse virtually paid off and with a super balance of about $390,000. Not a huge amount but with a part-aged pension I’m living comfortably. I would not survive on the aged pension alone. Without my super I’d be miserable and stressed and bored.
Of course a universal basic income scheme would be a lot more equitable, but rather than scrapping our super scheme we should tax excessive balances of wealthy people, tax super balances over $1 million (indexed) when the person dies, tighten tax-minimisation loopholes, and increase or supplement the age pension for those who don’t own their home and for those with no super.
Labor’s compulsory super scheme is precious for most of us and has provided a comfortable and stress-free retirement for the average Aussie worker. Never scrap it.
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