Here is an excerpt from an article in AFR 21.4.2012, the entire article can be read on Google, by just typing in Brian Toohey.


Downside of super engineeringPUBLISHED: 21 Apr 2012 00:04:08 | UPDATED: 21 Apr 2012 06:23:13PUBLISHED: 21 Apr 2012 PRINT EDITION: 21 Apr 2012
The tax concessions for super reduce government revenue and public savings. Official projections show the concessions will cost the budget over $42 billion in 2014-15. After allowing for offsetting factors, alternative estimates suggest that scrapping the concessions will increase revenue by over $30 billion in 2014-15.
Super fund managers mainly focus on buying and selling existing shares and other financial assets, rather than on direct investment that creates productive capacity.
It is unclear whether they generate more economic investment than would otherwise occur. But compulsory super delivers over $16 billion in annual fees – far more than expected if people were free to make their own choices.
Keating says super had been an elite system and he changed it to one in which “the bloke running behind the garbage truck could have super”. A garbo’s super balance is typically about $40,000, but a new elite has emerged.
Financial information firm Rainmaker research director Alex Dunnin says: “The wealth being stored in self-managed super funds [SMSFs] is becoming extraordinary, accumulating ironically behind the walls of tax concessions designed for lower and average income earners.”
Australian Taxation Office figures show that 90 per cent of SMSFs have only one or two members, yet 75,000 now have assets between $2 million and $10 million. Two have more than $100 million.
Meanwhile, as the government forces the bloke running behind the garbage truck to put more of his tightly stretched income into super, the unions want him to thank them for this “gift”.
If very low income earners were forced to save more than the current 9 per cent, their retirement income would be expected to be higher than their current standard of living. Wouldn’t they prefer to enjoy some of those benefits now, rather than having to wait?

nairbe wrote on Apr 25^th, 2012 at 6:33pm:

How long will the government be able to exempt the rich over sixties retirees from paying taxes?
The government should scrap the compulsory super and scrap the means test for the age pension, which would save the government more than $20 billion.
The much lauded "Three pillar policy" by the government is only for the benefit of the top 20% of reirees while the other 80% will always be kept close to the poverty line.
Australia is the only country means testing the basic age pension, and exempting millionaires from paying taxes.
It is quoted on the website of the OECD that Australias are the second poorest among the OECD countries.
Australia - OECD
www.oecd.org/dataoecd/8/61/43071222.pdf
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23 Jun 2009 – More than one in four Australian seniors live in poverty on international measures . This is the fourth highest old-age poverty rate in the OECD ...