There were 300 members of the super industry at the Association of Superannuation Funds Australia lunch, in the big city hotel for their “great debate” on whether the Government should raise compulsory contributions from 9% to 12%. The industry wants the rise but the interim Henry report suggested that current contributions were enough to give an adequate base to this pillars, with the age pension and own savings, of retirement income. I was the wild card, the only non super industry member of the panel and a serious long term critic of the basic inequities of system.
My main criticisms is that super subsidises higher income earners’ retirement by foregoing taxes at a ridiculously high level and overtaxes those on incomes below $32,000. So adding another 3% was basically adding insult to injury. The industry people are not bad people but it was hard for the 300 there to consider the ill effects of raising the contribution because it’s against their interests: they make more money if they manage more funds, and most would personally benefit from the inequities of the current tax advantages to higher income earners. There are a few dissidents in their ranks and one was part of the panel, but these find their positions uncomfortable.