Liberal and National MPs look to halt SG rise

The legislated rise in superannuation guarantee (SG) in July is being fought by a dozen Liberal and National MPs and senators, according to AustralianSuper chair, Don Russell.

A report by the Sydney Morning Herald said Russell called this move “puzzling” and “odd” as the Coalition had historically valued light-handed government regulation and individual choice.

Russell said super allowed workers to try to self-fund their retirement which would provide more financial freedom than reliance on the Age Pension. However, some Coalition backbenchers wanted people to have more choice during their working life instead.

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Pointing to the campaign to allow first home buyers to access their super for a home deposit, Russell said this would not solve the affordability issue and was at odds with the government’s Retirement Income Review. The review found the majority of retirees owned a property despite affordability being a concern for 30 years.

“If you start giving early access to first-home buyers, then it’s really destructive because in the first instance what we’re doing is providing the wherewithal for people to further bid up prices, but you’re also undermining the wealth generating capacity of superannuation,” Russell said.

“I think governments have to think very carefully about embracing notions which may appear very popular in the polling but you can be confident will make the situation worse.”

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Why do we keep seeking opinions on subjects like this from parties that are obviously heavily biased and conflicted?
The Australian Super chair - who's livelihood is no doubt significantly linked to the growth of his fund via SG inflows - thinks more SG is a great idea.... shocking.

Somehow you have overlooked that financial advisors will be also benefit from SG inflows.

Look at it as Wilson looking after his relatives in the wealth management and property development space. He and Bragg are happy for taxpayers to pick up the future tab of government pensions in lieu of self funded pensions.

Hedware, in first considering of Industry Superannuation and associations of are conflicted in wanting as much FUM as they can get their hands on, one must consider the conflict of selling product to repaying client debt.

In this case, it is clear to see that the Product Manufacturer is completely conflicted in that the Product Manufacturer make no revenue from anyone repaying their Mortgage.

The fact that these product manufacturers spend so much money and time promoting their conflicted view should be warning that individuals rights to choose how they spend income for which they have earned is being replaced by the needs of a product manufacturer.

Individuals should be given choice as to how they allocate their earnings - and they can always seek professional Financial Advise to do so. Product Manufactures (be it financial or drug companies) should not the ones tells people how much product to consume.

Seems to me Hedware you stand with product manufacturers and their conflicted interests?

Certainly the conflicted, commission based, financial advisers who work for union super funds will be better off with more SG money flowing into their commission pool.

But independent, fee based advisers earn their income by advising on the client's overall financial position, not just their balance in a given super product. The SG rate doesn't make much difference to these advisers at the end of the day. The less SG they pay, the more they'll have for voluntary contributions or other investments.

And before you fire off a reply saying superannuation commissions are banned, I'm well aware that the style of commissions used in the past are no longer around. But super funds have reinstated commissions for their inhouse advisers under another name called "intra fund advice". ASIC seems quite happy to allow union super funds to slug all members with these commissions, even though only a small percentage of members avail themselves of the service it is supposed to pay for.

Old thinking. I am not a fund manger, I charge by the hour, not the fum via commissions.

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