Everyone wants a piece of that tempting pie: governments, fund managers, hedge funds, and probably many others. The last people to see any remnant of the funds will be the contributors.
The antidote to these deadshits is to push for more low cost passive management. I noticed recently Macrobusiness was running a survey asking if their readers would like to join a superfund if they were to start one. Not even these guys "get it". No I do not want to to join your lame fund. http://www.macrobusiness.com.au/2016/04/survey-would-you-like-mb-to-manage-your-super/ What they should be doing instead of starting a fund is to try and convince Vanguard to offer one solely with their own passively managed/indexed products with razor thin costs. You will have Industry funds screaming BLOODY MURDER over night and it will severely limit the pool of capital that gets funneled into hedgefunds and money managers.
When I tell "people" about things like this they say things like "that doesn't sound right". And then when I show them articles like this they say things like "that will never happen". Even my accountant who set up my SMSF doesn't believe Superannuation is a target everyone is angling for, no matter how many reports I send her. I don't think the community will realise what's happened until its too late. We just gotta do what we can as individuals to avoid our life savings being fleeced.
Labor, the Greens & coalition politicians have all signalled their desire to tap into Aussie Superannuation as a way of funding their infrastructure spending & investment dreams. Technically a Govt. owned Corp. or company like say...NBN Co. could be made a mandatory investment recipient of all Super funds @ Say 5% per fund. And while its in a growth phase, that's fine. But what happens when it gets expanded to include mandatory investment in toll roads or rail lines or bridges... or Union dominated ports or Banking Industry controlled financial products!?
The only way that I would entertain any accessing of peoples' superannuation, as in the 3.1 trillion $AUD, is to pay down the national debt ! Then the interest payments could be returned to those accounts. This of course is not going to happen, and if so, would cause the great nation of Australia .... to be bombed !
If they do decide to make "investing in our future" mandatory by forcing you to back infrastructure projects that no private company would touch with a bargepole... How do they get the 5%? I have a ton of silver (not a literal Imperial Ton, Metric Tonne or American Ton but more than I would want to carry in one trip) and a loan on a property (which is positively geared at the moment and will be paid off in eight years). I couldn't sell 5% the property and still have it as a viable investment. I wouldn't want to sell any of my precious either (it might even be at a loss at the moment though things are looking up) Do I just get a hold on paying off the loan until I can put aside 5% in the SMSF? If they are going to go that why don't they just add another % to the income tax so at least I am not penalised for trying to save for the future. Thinking about it they might just decide to tax my voluntary component by 20% instead of the current 15% for salary sacrifice. But then I would just pay my investment properties outside of super instead... All too confusing but I guess they like it like that.
The big super funds have been saying for a while that they have the money and they're happy to invest in infrastructure projects, but what's actually holding them back is the lack of well planned and well structured deals on offer. Governments have spent decades learning how to privatize existing assets (with varying degrees of success), but they've forgotten how to actually set up up the projects in the first place and also got into the nasty habit of scrapping previous governments' projects as soon as they win office. All parties need to start making full use of independent assessors like Infrastructure Australia and commit to continuing their opponent's projects if they've been signed off as worthy investments.
^^^ Totally agree, on Govt. planning, the on-again/off-again circus of West Connex, the Toowoomba Range Crossing, the NBN and especially the $420M compo payout for cancelling East - West Link are prime examples. But my point is, superannuation is not theirs to spend. It is put aside specifically for individuals to help fund their own retirement. (There is a clear conflict of interest for governments to get involved in investing in private enterprises with public funds. And that is aside from the point they are just diabolically bad at investing in the 1st place.) Traditionally, The Govt. has collected enough funds to create infrastructure from our taxes. If its not enough... then what have they done with the money?
Sorry, my point was that the big super funds - acting in the interests of their clients - are saying they are prepared to invest in big, expensive, long term infrastructure projects if the federal and state governments can come up with fair and viable deals. Governments aren't doing that. Instead, they're buggering around cancelling and de-funding one anther's projects. There's stuff to build and money to be made, but the super funds just aren't getting any viable deals pitched to them.
Well, timing is everything in comedy. I only just found out about this because my mates still back in the QLD Govt spraying their keyboards. The Qld Labor Govt has announced they will pay off their massive debt & fund infrastructure spending by tapping into Public Servants superannuation scheme http://www.abc.net.au/news/2016-06-14/qld-budget-$4bn-of-public-service-super-to-reduce-debt/7506634 The treasurer is on the record as saying "This is a budget which is a good Labor budget," :lol: :lol: :lol:
They're "raiding" the defined benefits portion of the fund. They know how much they need to pay out to retired public servants because, as the name implies, the figure is defined in advance (i.e. 70% of final year's salary, etc). Having calculated what they're going to have to pay out, it seems they're $10 billion in surplus. Knowing that $10 billion is never going to be paid out, what else should they be doing with it?
Gotta be careful with Govt. business case calculations too! The business case for the Clem Jones tunnel in Brisbane reported forecast traffic volumes higher than the Sydney Harbour Bridge.... every day of the week!!
Qld has until now, a fully funded public servant super scheme with all monies invested in the QIC. Now where do the other states put their state employees super contributions? Into the state coffers maybe? Suppose you are a financial adviser, where do you put the monies you manage???How many finished ahead in the years 07/,08 and 09. As George Carlin said, " they'll get it all".. Regards Errol 43
The OZ Government will do all it can to get as much as it can from the Superannuation Funds. I doubt they would try and force them to sell up the lot and hand it over in exchange for OZ Treasury Bonds as it would cause a hell of a case of indigestion on the ASX etc. The annual dividend and interest income etc would be a hell of a lot and probably what they have in mind. Sec 51 xxx1 may save us! OC
