So the USA does not have enough money, despite all its ‘monetary easing’, to upgrade its aging infrastructure. Yet good old Aussie Homie, Malcolm, knows just how to help out.
Meanwhile, back in the real world, every person putting their hard-earned money into their Super Fund begins to worry just a little. Their Super funds have been investing and growing their money, GFC’s excepting, at around 6-8% a year. That is what Super is supposed to do. Grow your savings into retirement. Not at the 2% Malcolm wants back from his mate, but at something better than bank interest.
That is why there are fund managers. so they can find the best places to invest YOUR money. It isn’t Malcolm’s to throw around, it is YOURS! If any fund manager was to invest the super fund he was managing into a 2% return he would be fired! Yet that is what our money-wise PM is about to force on to all our super funds.
At this stage, the proposal seems to be around 10% of the total fund being forced offshore into very low interest rate loans. Doesn’t seem very much, does it? It will only affect the effective interest rate for the entire pool by about a single percent. Not very much until you factor in the compounding interest lost. Because it is the compound interest which make Super so affordable and attractive. When you retire you have a good sized nest-egg. Have you seen those ‘Industry Super Advertisements’? The ones which begin, ‘Same age, same income’? Those poor people who haven’t switched? Guess what! That will be all of us if Malcolm gets his way.
Or could this just be the natural outcome of the IPA’s plan to force Industry (Union) Super Funds to have outside (IPA or Liberal) directors on their boards of management?
How will the funds to be given away be chosen?
By lot? ‘Sorry, your fund will be earning 2% for the next 30 years.’
By Government decree? ‘All your funds belong to us!’
So that is a one percent loss, compounding, for all future retirees. At the moment. What happens next year, or the year after? When Good Old Donny needs another handout? Another 10% of the Super fund? When will it stop? Will it ever stop?
All our super will be affected, all of us will have less in retirement thanks to this misguided gesture of incompetent generosity.