Super: Lining fund managers’ pockets
Learn that name.
This time next year, everyone may know him as the man who took on a multitrillion-dollar industry…
…or select groups will demonise him as being against planning for the future.
Either way, pay attention to how the media tells his story.
Because Bragg is one of the few people calling a spade a spade…
Challenging vested interests
I know, I know. It’s been a rough three days.
Since Monday, we’ve been bombarded by the news that a celebrity chef underpaid staff.
Then, he and his famous mates told a network to stick it over money.
It’s really not that interesting. And certainly doesn’t deserve three days at the top of the digital headlines.
The worst part is that it masked a much more important story.
You see, a recently elected politician strolled into parliament and dared to call out an industry for what it is.
Recently elected Liberal senator Adam Bragg used his first speech to call out Australia’s superannuation industry:
‘Superannuation is a classic case of vested interests triumphing over the national interest. Super has made the unions, banks and insurers richer than ever.
‘The fees are too high, there is not enough competition. There is insufficient transparency.’
‘I do not believe the system is working for Australians. Certainly the case has not been made for ever bigger super.
‘The last Intergenerational Report showed around 80 per cent of people will still be reliant on a public pension by 2055.This is not good enough after 70 years of compulsory super.’1
Then he cited research from the Grattan Institute, saying that Aussie households spend $30 billion on super fees and $23 billion a year on energy costs.
That’s right. It costs more to have a super account than it does to run your home.
Bragg’s speech is timely. The compulsory super guarantee is due to begin slowly increasing from next year. However, Bragg is one of only a handful of politicians questioning if this is the best thing for Aussies.
What makes Bragg’s stance more interesting is that he knows exactly what he is talking about.
You see, prior to winning his seat in May, Bragg worked for the Financial Services Council.
A board that represents Australian financial institutions and — you guessed it — has long lobbied for higher compulsory super contributions.
By sharing his opinion so publicly, and saying that compulsory superannuation only benefits vested interests, Bragg is attacking his old industry, as well as his own political party.
It’s not often you see a politician go far out on a limb.
No one dares to take on a sector that sees $100 billion flow its way each year…2
Is Bragg’s speech merely a case of a pollie wanting to make a name for himself? Maybe.
But in all honesty, if he wanted other pollies to like him, he’d win more friends by towing the party line.
Plus, you don’t really win over the Australian public by attacking what’s meant to be our ‘safety net’.
Take this statement from Shadow Treasurer Jim Chalmers:
‘The Liberals are clearly gearing up for another attack on the retirement incomes of Australian workers. At a time when workers’ wages are stagnant, the Liberals also want less money going into their retirement balances as well.’3
Chalmers also pointed out that Scott Morrison has ‘failed dismally…to stand up to the extremists on his backbench and rule out thieving workers’ super.’
I’ve heard that ‘What about Aussie workers?’ plea before.
Aussies are meant to feel grateful for having superannuation. I’ve heard many pro-superannuation proponents marvel at the Australian retirement plan.
Our near $3 trillion in collective wealth is meant to be the envy of the world.
The thing is, I’m starting to think it’s only other fund managers that envy it.
Not only did the Banking Royal Commission reveal the rot in the banks, it also offered insight into the dodgy behaviour by super companies.
And it only scratched the surface in highlighting the extent to which superannuation funds are failing Australians.
A well-intended government policy has created unintended consequences.
A multitrillion-dollar sector (let that sink in) has grown fat on bloated easy money that we are forced to send their way.
We don’t have a say in it. And worse, incremental compulsory superannuation increases via legislation forces more of our money into this parasitic industry.
Compulsory superannuation robs us of the choice of how we spend our money now. Instead, that power is handed over to fund managers, and then it becomes their decision on how your money should be invested.
Our retirement industry may have been set up to benefit us, but in the end only a select few control it.
And our latest bureaucrat has come out and told Australia exactly that.
He isn’t out to attack Aussies workers and rob them of their retirement funds.
Perhaps he came to challenge an entire industry that doesn’t want us to know how rich it’s getting off our salaries.
Until next time,