Australia's superannuation – doomed by its origins

Undaunted, Keating now wants more (15% of pay packets) diverted into that unaffordable system, arguing that greater longevity demands it. This is the politician who labelled another as a nong, a donkey, an intellectual rust bucket, a clod hopper, and poor silly so and so. Still he struts, having inflicted a profound error of policy upon this nation. If we construct an index of policy stuff-ups, taking the pink batt fiasco as unity, then Keating's super is of magnitude tens of thousands of PBEs (pink batt equivalents). At least he warned us:

If the day comes to throw the switch to vaudeville, I'll do it, understand? I mean if one has to be all-singing, all-dancing, that's what we'll be. But in due time.

Greatly more productive super systems are practical. Having dragged Australians to the point of facing responsibility for retirement - while thwarting them with misinformation - it is a modest step to creating adequate, independent self- managers. The essence of a concessional scheme could be retained, offering people the choice of taking all or part of their savings now held by public funds; the remainder would be rolled into a rethought self-managed structure, with scant overhead. Contributions could be made or not, with modest tax advantage. Design would minimise avenues for intervention by cant and cunning.

If it was a worthy policy to assist Australians to be self-reliant in retirement, it was an error to conflate its implementation with unions preoccupied with survival. The evidence points to a breathtaking, self-interested manipulation of citizens' incomes as the result. It was an error to dismiss other ways of safeguarding citizens' forced savings. And to ignore the risks for individuals and the nation. It is no surprise that commerce saw the possibilities, leading to a paradigm now in which funds' competitive success matters more than individuals' needs. I can find no parallels for long, plodding, implacable policy aberrations on the scale of our super which so directly affect citizens pay-packets. The eminent American public servant John Kenneth Galbraith has pondered public policy failures. He would say that Australia's super has arisen:

Out of the pecuniary and political pressures and fashions of the time. Economics and larger economic and political systems cultivate their own version of the truth…There is no serious sense of guilt; more likely there is self-approval.

Thus, while Australia's super is said to be the best, the envy of the world, it is, when disrobed, an exquisite token of a Galbraithian "long and large departure from reality of approved and conditioned belief."

Galbraith would say also that it is too late for Australia to rearrange retirement policy sensibly. The super behemoth has entrenched itself, with aggressive defences. Group effort has been applied to command these new financial fiefdoms establishing barricades of managerial, political lobbying and specialist marketing skills. The public super funds, controlling a trillion dollars of assets, have prepared for challenge. Guess who is paying?