By MoneyMorning.com.au
In a moment we’ll reveal more evidence to back our long-held claim that the Australian federal government is edging closer towards taking your retirement savings. But first…
We continue to find Europe amusing.
In World War I, 15 million people died… to protect the rights and freedom of nation states and their people.
In World War II, over 60 million people died… to protect the rights and freedom of nation states and their people.
That’s the sugar-coated story anyway.
Of course, the real reason for war is maniac prime ministers and presidents enjoy sending people to their deaths. Just so they can cling to power. If it means killing 15 or 60 million people… well, them’s the breaks.
Today, Europe has changed.
You still have maniac prime ministers and presidents. But now the only way to stay in power is to give up rights and freedom… to another bunch of maniacs. This time it’s the unelected members of the European Commission.
Of course, you could argue giving up rights is better than war. But we’ll argue it’s a “Morton’s Fork” (a choice between two equally unpleasant alternatives.)
But at least Europeans know what they’ve got. That’s something you can’t say for Australians saving for retirement…
On Wednesday, Money Morning reader, Dennis sent the following note to the Money Morning mailbag:
“A few weeks ago you commented about the government trying to work out a way of tapping in to (read stealing) the $trillion+ we mere mortals have tied up in super, salivating as they go!!
“At the time I thought ‘Krissy boy, you’ve lost it!’
“However, this circular just arrived on my desk. I have highlighted the relevant part. Unfortunately for us mere peons, you were right!!”
Dennis isn’t the first reader to say we’ve “lost it”.
We’ve lost count of how many readers (and ex-readers) have told us we’re an idiot, stupid and insane.
It’s just a shame they don’t stick around to see we aren’t so idiotic, stupid and insane after all.
The “circular” Dennis refers to was Wednesday’s press release from federal assistant treasurer, Bill Shorten. It’s titled: “More Money in Retirement – An Historic Boost to Superannuation”. The key part states:
“The increase in the SG [Superannuation Guarantee] will boost the superannuation savings of Australian workers by around $500 billion by 2035. A proportion of these savings will be channelled back into the Australian economy to fund jobs and nation-building infrastructure.“
Now, we won’t go off on a rant, explaining the immorality of government-enforced savings schemes. But rather we’ll point out this is more proof of the retirement savings theft we’ve warned you about since 2009.
The key part of the statement is the bit we underlined.
Our simple question is: how can any government possibly know that funds will invest in “nation-building infrastructure”?
It can’t. Unless it plans on forcing super funds to invest in “nation-building infrastructure”.
In other words, the government is annoyed that there’s well over $1 trillion of personal retirement savings it can’t get its hands on. So one way of grabbing it back is to force super funds to build things the government would like to build.
If you think we’re grasping at straws, how’s this for a convincer…
In Tuesday’s Australian Financial Review, an ad appeared from the Minister for Infrastructure and Transport, the so-called “honourable” Anthony Albanese. It publicises the Financing Australia’s Infrastructure conference:
“The conference will be examining potential reforms to Australia’s infrastructure financing and funding practices as well as numerous major infrastructure opportunities… This will be an opportunity to reflect on the reforms in the light of real world projects and also to make stakeholders aware of the incredible opportunities in infrastructure for the nation.”
Put simply, the conference will be full of fund managers who are eyeballing your retirement savings. So they can build fancy infrastructure projects.
That’s despite the fact that super savings are supposed to benefit you in retirement. Instead schools, roads and bridges will get the benefit of your retirement cash. That may sound very noble, but wait until you need to retire. It won’t seem so noble then.
As we see it, it’s another kick in the teeth for savers. It’s bad enough most are unwittingly over-invested in the high risk and volatile stock market. Now this.
Because make no mistake, this isn’t about giving your retirement savings a boost. Nation-building is about ministers getting drunk on building the modern-day equivalent of the hopeless Snowy Mountains Scheme…
It’s about building their legacy rather than your future wealth.
Doubtless we’ll get another bunch of letters telling us we’re off our rocker. And that unless we clean our act up the letter writers will unsubscribe from Money Morning. But we’re used to that.
The fact is the Australian federal government rues the creation of super. It took potential spending money away from the government. But now it’s set on getting it back.
The next stage of the government’s retirement savings theft is under way. Don’t say we didn’t warn you…
Cheers.
Kris.
P.S. Although we can’t give advice on super, we can give you advice on how you to save and prepare for retirement. In his latest issue of Australian Wealth Gameplan, Dan Denning showed investors how to construct what he calls a “Permanent Portfolio“. It’s the idea that at whatever your stage of life, there’s a mix of asset classes and investments you can choose and then pretty much set-and-forget (aside from rebalancing the portfolio once a year).
P.P.S. If you reckon that sounds right up your alley, you can find out more details on Dan’s “Permanent Portfolio” strategy and take out a no-obligation 30-day trial subscription to Australian Wealth Gamplan by clicking here…
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From the Archives…
Gain Without Pain
2011-10-28 – Greg Canavan
If a Butterfly Flaps its Wings in Frankston…
2011-10-27 – Kris Sayce
Dr Doom’s Warning for Aussie Investors
2011-10-26 – Kris Sayce
“Ctrl + Alt + Delete”
2011-10-25 – Dan Denning
A Mistake That Could Cost Millions
2011-10-17 – Kris Sayce
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Your Retirement Savings – The Day the Government Began to Raid Them
