Australian savers dodge a super sniper

Private sector savers look to have scored a win as the government abandons plans to punish Australians saving via superannuation. Now if only we could fix public sector super...

Australian savers appear to have had an enormous win. And, I would argue, so has the nation.

I can’t be sure, but I would like to think Business Spectator and Eureka Report have played an important role in the victory.

The government is now spreading the word that it has abandoned its plans to savage those who are saving via superannuation – particularly self managed funds. The Australian Financial Review reports that while there will be small superannuation changes in the looming mini-budget, any major moves have been delayed until the May budget. And as the May budget is just before the 2013 election, effectively the attack of Australian savers has been abandoned.

Senior public servants, particularly those in Treasury, have always opposed private superannuation saving incentives. For decades they have been pressing for the incentives to save via superannuation to be cut back. They have a similar attitude to franking credits.

Public servants have never understood the long-term value to Australia of strong superannuation savings. This is partly because they live in a totally different world to rest of the nation.

Most of the senior public servants have defined benefit schemes where they are contributing nothing or only small amounts. According to government figures Australian taxpayers gave an unfunded liability of $200 billion to these Federal and state schemes.

In Business Spectator I took a stand that if we were going to make it tougher for genuine savers to prepare for their retirement then we needed to take to these unfunded public servant rorts with an axe. It’s totally unfair that if Australians who put their own money aside are to be hit, that senior public servants on large salaries should retire in luxury for the rest of their lives, funded by the public purse (Canberra's great superannuation rort, October 1).

That commentary drew a huge readership. My guess is the main readers were public servants, particularly senior public servants.

It may be a coincidence but suddenly leaks of a planned assault on the private savers stopped. In fairness, the statement by former ACTU boss Bill Kelty clearly also played a major role.

Now the leaks say there will be no action but we need to be very watchful.

Australians started their superannuation journey in the large professionally managed funds. But these funds did not offer the products and services that many Australians required (and fees were often large), so some 35 per cent of Australian superannuation savings is now in self-managed funds and its likely to go to 50 per cent (Super funds' great delusions, October 9).

To pick out this enormous segment of our savings market for a special attack was outrageous.

Meanwhile, when the 2012 Federal budget came out anyone with any knowledge of the mining industry knew that the $4 billion, which the government said it would raise from the mineral resources tax, was at great risk. I wrote: "When it comes to the 2013-14 and 2014-15 budgets, the Treasurer may find that the mineral resources tax has raised nothing like the $4 billion that they are forecasting, assuming the share market outlook for commodity prices is correct” (FEDERAL BUDGET 2012: Ripping into middle Australia, May 8).

Now the government is saying later events have changed the situation, which is not really true – the government was punting in the budget that mineral prices would recover. Instead they went lower.

As a result there will now also be big cuts in normal mining tax revenues. The government clearly has to find some money from somewhere to achieve a surplus. Thank goodness savers look like they have been spared.


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