Superannuation swindle. Yeah, but not for the reasons you say.

Rob Burgess seems a decent sort of bloke. Affable enough in those videos he did tooling around Melbourne in his old Ford*, pontificating on economics and whatnot.

But once again we’ve got the same old tripe being trotted out in The Great Superannuation Swindle Must Be Stopped.

Yes, allowing people to access their super to invest in housing is only going to drive real estate prices up further, you’ll get no argument from  me on that score. That’s a colossally stupid idea if your aim is to help first home buyers.

But the rest of the article is just Neoliberal Groupthink 101. For example:

State and federal governments raise taxes to fund infrastructure, education, health, administration and so on – goods and services which on balance make the economy work more efficiently and increase the ‘common wealth’.

State governments do, but the federal government does not. This is a lie, and Burgess knows it to be a lie. Yet it blithely gets repeated here.

If Australia had not amassed a pool of $2 trillion in superannuation assets so far, with more to come, we’d have had no hope of providing for the ageing population in retirement. So no, it’s not true that money in your super account is your and yours alone.

It has not only been topped up by your fellow taxpayers, but it is a comprehensive plan to prevent older Australians living in cars and dining on tinned dog food.

This is where I start to shout at the screen as I read the article. The ageing retired population cannot eat their superannuation, no matter how large it is.

The New Daily is supported by Industry Super, so these comments would be deeply unpopular on their site, but the simple fact is that superannuation is a complete con. It just does not do what its proponents (such as Mr Burgess above) claim. In fact, as Dr Steven Hail wrote recently, you can argue that it could actually have the opposite effect of what it was intended for, and is in fact – to use the terminology in Warren Mosler’s work – an “innocent fraud”.**

Superannuation is a forced savings plan. Legislated garnisheeing of your wages into a savings account, deferring your spending until you turn 60/65/whatever. It cuts your spending capacity today with the promise of increased spending capacity in the future. As Dr Hail says, releasing that spending capacity later on could conceivably trigger inflationary effects, driving up the cost of the goods and services that pensioners require at the very time they require them, what with the ageing population crisis we keep hearing about.

Superannuation is bullshit. There’s nothing wrong with saving for your retirement, but it’s simply false to assert super is the only way the nation can afford to keep our senior citizens. The federal government can afford to pay pensions and public service retirement scheme costs every fortnight forever. They issue the currency and can never run out. What’s important is that there are the real goods and services available in the economy to be purchased with those dollars. It’s the lack of things to buy with your money that causes inflation, not money itself.

Look, I’m a fan of Keating, but he sold us a pup with superannuation. The moment we floated the dollar, the rationale for superannuation disappeared. Perhaps he didn’t realise that at the time, but it should have become obvious since.


* Call that thing old? Pfft. Perhaps I should do some videos on macroeconomics whilst driving around in my 1956 Holden?

** I cannot recommend Dr Hail’s article highly enough. If you didn’t click the link before, do it now. Here it is again.

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