Mannkal Economic Education Foundation


Superannuation - a free kick to the smaller political parties?

Ron Manners

9 June 2016

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Teaching your children about taxation is easy.

How easy?

Just try eating half their ice cream.  If you’re smart, like governments, your introductory phrase will be, “Just let me taste your ice cream.”  Then you will slowly work up to taking half.

If you take half, on a regular basis, I’ll tell you what they will do.

If they are bigger than you, they will hit you fair and square or, if they are smaller, they will hide their ice cream out of reach.

They may be young but they already have a perfect understanding of taxation and are able to differentiate between ‘fair and unfair’.

So it is with adult voters when they see the rules change, retrospectively, concerning their superannuation and retirement arrangements.

The Superannuation rules were established when our Federal Government realized they had failed as ‘custodians’ and that the funds simply were ‘not there’ to pay pensions, even after taxpayers had been contributing, through taxation, over their working lives.

Yes, the cupboard was bare.  So encouragement was legislated to incentivize people to care for themselves.

Whether these arrangements were too generous, to redress the government’s poor custodianship, is irrelevant.  It certainly did not stop our politicians legislating a far more generous superannuation hand-out to themselves …. on a non-contributory basis too!

Their own scheme is seriously under-funded but they have continued caring for themselves by robbing us of 50% of the Telstra privatization shares and establishing a Future Fund to ensure continual payments of their own generous schemes.

However, even after the Telstra ‘robbery’ they are still in trouble. The scale of the unfunded superannuation problem was clearly explained in Tony Boyd’s (AFR article, May 5, 2016) Behind the $169b in unfunded super where he stated;

“One of the most shocking numbers contained in the federal budget papers on Tuesday was the $26 billion explosion in public sector employee superannuation liabilities over the next three years.

These unfunded liabilities are forecast to rise from $169 billion in June 2016 to $195 billion in 2019.  The liability is to cover the pensions or lump sums of current and former public servants, military personnel, judges and politicians.”

Now that our political leaders stand naked, as our July 2nd Federal Election nears, one might ask if voters could find some attraction in carefully selected minor parties or distributing their votes to some of the up-and-coming Independent candidates?

Ron Manners

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