Tag Archives: SGC

How The Media Uncritically Enables The Growth Of Super(annuation) Parasites

19 May

I fear there are no words to adequately express my contempt for the so-called “journalists” in our mainstream media.

So I won’t even try.

See for yourself, dear reader, whether my headline is apt, or no.

Here is Sid Maher & Joe Kelly of The Australian (my bold added):

Levy hike deferral ‘to cost $55bn’

INDUSTRY super funds have warned that Tony Abbott’s planned two-year delay in increasing the superannuation guarantee will cost workers a combined $55 billion in lost retirement earnings over seven years.

The warning from the Industry Super Network came as business groups split over the Opposition Leader’s budget reply speech…

[…seven paragraphs of diversionary bullsh!t posing as “reporting”…]

Industry Super Network chief executive David Whiteley said the proposed delay in the compulsory increase would result in a cumulative impact of $45bn less in super savings in the system over the next seven years.

“The figure rises to $55bn when the Coalition’s proposed abolition of the low-income earners’ superannuation concession is also taken into account,” he said.

ISN economists had estimated the delay would yield short-term budget savings of $1bn per annum over the next seven years but reduce super inflows by more than $5bn per annum.

Er… Sid? Joe? Hello … anyone home?!

How exactly did the Industry Super Network come up with those figures that you have reported parrotted from their press release, oh so authoritatively?

Click to enlarge

Click to enlarge

Did the ISN show you their modelling?  Their assumptions?  Their raw source data?

Did you not see a big red flag waving when you read their press release (er.. you did read it, right?), claiming that the decision would “reduce super inflows by more than $5bn per annum”?

Did it not occur to you that these folks make their “living” from the fees they plunder off those “super inflows”?

Is it at all possible that the “economists” of the ISN are little more than completely full of sh!t, rent-seeking societal parasites,  who have concocted some very convenient, nice-big-round-multiples-of-five numbers ($55bn, $45bn, $5bn) — forecasts, no less — for no other reason than to pressure Coalition politicians into changing policy, hoping to ensure that they do receive their long barracked for, extra super “inflows” / income stream?

“Given the enormous cost to [our much-anticipated income stream boost] … ISN urges the Coalition to reconsider its plans.”

Oh yes, one last question.

Where (and when) did the ISN’s blonde Campaign Manager last take you boys out to lunch?

Screen shot 2013-05-19 at 5.36.26 PM

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Labor Threatens Super Funds To Prop Up The Banks

5 Apr

Illustration by Zeg | Click to enlarge

I accept that some readers may not see the red flag that I see waving all over the following story.

So be it.

In my view, what we have here is a clear preliminary step down the path to government “intervention”, to “save your super” from the risks of the “volatile” sharemarkets.

First by “encouraging”, later forcing, your super fund to invest where the government dictates is a “safe” place for your retirement savings.

That could be the “safety” of government bonds.

Or perhaps, as strongly hinted at by this story, it could be the “safety” of bonds issued by our banking system … who just happen to be “overleveraged” according to the ratings agencies, and recently pitched threatened the government to help them with additional sources of funding in order to “save the mining boom”.

The ‘softening up’ process, the art of steadily planting seeds in the public mind and preparing them for a future event, is called “perception management”.

Here is Business Spectator’s Stephen Bartholomuesz making the argument for the government … prompted by a speech from the former Finance Minister Lindsay Tanner, in which he clearly threatened “government intervention” to force super funds to invest where the government wants them to (more on Tanner’s threat below):

Former federal finance minister Lindsay Tanner may have been overstating the risk of government intervention to correct a perceived bias towards equities within superannuation fund portfolios yesterday but the issue he was highlighting is worthy of further discussion because it contributes to the debate about the need for a developed corporate bond market in Australia.

In a speech to the Ownership Matters conference in Melbourne yesterday Tanner actually approached the issue of the overexposure of super funds to equities from that starting point – the absence of a developed domestic corporate bond market.

The disproportionately high levels of exposure to equities in most balanced fund portfolios is only one strand of the explanation for the absence of a functioning domestic bond market, albeit a material one.

During the great decades-long bull market in equities leading up to the global financial crisis, the bias towards equities in most super funds generated returns that, from a long-run perspective, were aberrational. The GFC reminded investors, and super fund members, that while equities might deliver higher returns relative to most other asset classes over the long term they do so because they carry greater latent risk.

As the population ages, the tolerance for risk will decline. Indeed, with the GFC as a wake-up call, it has already declined. Hence the deluge of funds that has poured into term deposits and other fixed interest securities as investors and super funds have been introduced, painfullly, to the concept of risk-adjusted returns.

Translation: For decades, everyone’s super went into the sharemarket; thanks to the GFC everyone has lost a fortune; now, everyone is more risk averse, and so their money is going into lower risk investments like term deposits.

For the foreseeable future the environment for equity markets is likely to be quite different to that which prevailed before the GFC.

That would suggest that, particularly for the demographic bulge moving towards retirement, the appetite for equities will diminish and therefore the proportion of equities within fund portfolios will trend and remain lower than it was pre-GFC.

As I was saying.

And now – for those with eyes to see – the red “danger!” flag appears (emphasis added):

We’ve already seen a flurry of listed corporate bond issues earlier this year as companies have capitalised on the risk aversion and desire for yield of investors, particularly the rapidly-growing self-managed fund sector.

If the major banks were to issue listed bonds, and the federal government ever delivers on its promise to facilitate the listing of Commonwealth government securities – which would provide a pricing benchmark for all other issues – a properly functioning, liquid corporate bond market that can be accessed by retail investors and SMSFs could be developed, one which might also encourage the large super funds to become bigger players.

As regular readers know, this clearly hints at exactly what I have long argued is the inevitable fate of Aussies’ super.  Our all-knowing, all-caring Big Brother government – whether Labor or Liberal matters not – will decide to “help” you, by creating mechanisms to redirect some (and eventually, all) of your super into “investments” that the government deems to be “safer” than the share market, and/or “investments” that are “in the national interest”.

They already tried last year, by “encouraging” super funds to invest in their “nation building” infrastructure programs like the NBN. Fortunately, the super funds were smart enough to resist.

But when push comes to shove, you can be sure that the government will move on from “encouraging”, to enforcing.

For your own good, of course.

Back to Batholomuesz:

Given the post-GFC environment for the major banks – they are holding a lot more capital, more and more expensive liquidity, experiencing higher funding costs and face the imposition of a simple leverage ceiling within an economy where households and businesses are deleveraging and demand for credit is therefore very weak by historical standards – it is unlikely that they will return to intermediating mid-teens credit growth any time soon.

Indeed, having had a nasty experience during the GFC, when their own overexposure to wholesale funding markets highlighted their own vulnerabilities, it is likely that the banks will manage their balance sheets far more conservatively in future than they have in the past, with an acute focus on the stability of their funding.

One of the reasons the major banks built up their reliance on offshore wholesale funding was the increasing diversion of Australian savings from bank accounts to super – and a majority of it into equities – as the super system grew over the past quarter of a century.

Bartholomuesz clearly argues that the banks are overreliant on offshore funding because you and I preferred to have our super in the stock market. The thinly-veiled implication is that the banks’ current problems are really our fault, you see. And the unstated implication being, that it makes sense for our super to fix that problem now, by redirecting it into bonds issued by those “safe as houses” banks.

More of those funds within the super system will, if fund members and their trustees shift to a more balanced and defensive posture and (thanks to the GFC) have a better understanding of risk-adjusted returns, become available to both the banks and corporate borrowers.

And there you have it.

We all just need to “have a better understanding of risk-adjusted returns”, and everything will be rosy … we will want to have our super invested in bonds issued by the big banks.

Even if it is just a “relatively modest” amount of our super:

Given the size and growth rate of the super system, relatively modest re-weightings of fund portfolios away from equities to fixed interest securities could have very significant impacts and could – indeed, should – occur without any need for government intervention.

That red flag is waving a little more strongly now.

And if we still don’t want to have our super propping up the banks?

Bartholomuesz’ final sentence rings out like the death knell I believe this article signals:

There probably aren’t too many super fund members who’d be enthusiastic about the prospect of Wayne Swan dictating how their savings were deployed.

Indeed.

Won’t stop him though.

Take the carbon tax CO2 derivatives scam as a case in point.

And if we consider closely what Lindsay Tanner wrote in the Australian Financial Review yesterday, then I think it is crystal clear what the government has in mind:

As the vast sums involved here are compulsorily directed to a particular form of saving which enjoys preferential tax treatment, those managing the funds can hardly go on about the sanctity of the free market. As concerns about corporate funding rise, and worries about risk in our super system mount, the only guaranteed way to avoid government intervention is for the major players to deal with the issues themselves.

For those with eyes to see and ears to hear, that is a clear threat to super fund managers.

Redirect Aussies’ super into propping up the banks.

Or the government will make you.

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Big Banks Call For Government To Raid Your Super To Give To Them To “Save The Mining Boom”

31 Mar

Well, no. That’s not exactly what they said.

But if you have the ability to look beyond the end of your nose; if you have seen that governments across the “developed” world have been stealing their citizens’ super to prop up their own and their banks’ finances; if you have seen the dire state of the Federal budget; and if you have seen the sneaky policy quietly introduced by the Liberal Party, and now implemented by the Labor Party, then the unstated implication is clear.

Some day soon, a tapped out Australian Government – whether Labor or Liberal – will “borrow” your super to give to the banks.

In our “national economic interest”.

In the opinion of your humble blogger, this is as clear and as inevitable as the rising of the sun on a crisp cloudless morning.

The rays illuminating this truth have been faintly flickering over the horizon, ever more brightly, for well over a year.

Now, it is dawning.

The only question is this – Who is awake early to see it?

From the Australian (emphasis added):

Funding shortfall threatens resources projects

THE economy’s ability to reap the full benefits of the once in a generation resources boom is in jeopardy, with major projects facing a funding gap as more foreign banks leave the Australian market and local lenders struggle with ongoing turmoil in financial markets.

The big four banks all warn that a record pipeline of hundreds of billions of dollars worth of resources-related projects cannot be met by the banking sector alone while it is being crunched by current economic instability and is being forced to raise its capital levels to comply with new global banking rules.

A range of submissions from the major banks to a Productivity Commission inquiry into the future of the Export Finance and Insurance Corporation (EFIC) show the banks are worried the funding shortfall is set to worsen.

There are fears that a funding gap will exacerbate the “hollow nation” notion that Australia is not capitalising on the boom.

Oh dear! Where to begin?

On the one hand, there are many (including your humble blogger) who have cogently argued that both the Treasury Secretary’s and RBA Governor’s economic policy settings are deliberately geared to hollowing out the rest of the economy to “make room” for the mining boom. Both Treasury and the RBA have openly admitted this. Their deliberate high AUD policy is the most disastrous example. But now, the new claim is that the Big Banks need an extra source of funding, or else the nation will be hollowed out by not maximising a mining boom?! Orwell would be proud.

The biggest bank, the Commonwealth, predicts that the number of banks lending in the Australian market will shrink further.

Translation: We know that Wayne has made “increased bank competition” a mantra, hoping to placate voters’ anger; what better way to pitch for government “help” than to warn (threaten) of a future with reduced competition.

National Australia Bank’s group executive of wholesale banking, Rick Sawers, said there was a risk that funding to the resources sector could become constrained, which would ultimately hold back the sector’s growth.

“As project capital costs have increased, particularly in the infrastructure and natural resources sectors, maximum individual bank exposure amounts are being tested,” Mr Sawers said.

He said “additional sources of capital” were required.

Mr Sawers said Australia needed to ensure that international sovereign wealth funds were encouraged to invest in the local market.

The banks argued that there was a role for EFIC to provide funding to ensure export-oriented projects could be developed.

So if it is true that the big banks are going to have difficulty accessing enough money from overseas to finance Wayne’s oft-touted “massive investment pipeline” in mining, where do you think the extra money is going to come from?

If investment by international sovereign wealth funds in Australia’s mining boom was such an obvious winner for them, there would be no problem, and no need to “encourage” them, now would there?

There is another “sovereign wealth fund”, that could more easily be “encouraged” by government to “invest” in the Big Banks.

Consider: What is by far the biggest pool of “savings” that could be quickly and easily tapped, by a tapped out Federal Government?

Why, the fourth largest retirement savings pool in the world, of course! The $1.3 Trillion in Aussies’ combined superannuation savings. The pool of funds described by Minister for Superannuation and PM-in-waiting, Bill Shorten, as “our” “sovereign wealth fund”, a “significant national asset” that “strengthens our financial sector“:

Superannuation is our sovereign wealth fund

This week marks 12 months exactly since the government announced plans to take compulsory superannuation from 9 per cent to 12 per cent.

… our superannuation savings place Australia fourth in the world. Its $1.3 trillion in funds under management through superannuation significantly boosts national savings and provides greater retirement security for millions of Australians. Superannuation is also a significant national asset because it strengthens our financial sector.

It is the same pool of funds that Gillard has already tried “encouraging” to invest in government “infrastructure projects”, like the NBN –

The Gillard government’s 2011-12 budget has proposed a raft of initiatives aimed at encouraging superannuation fund and private investment in infrastructure projects.

Drip.

Drip.

Drip.

Back to the Big Banks’ veiled threat:

Westpac warned that the major Australian banks were already facing “considerable pressure” because of large resource-related projects and the ongoing squeeze in global financial markets, while other funding sources “cannot meet the demand for funding created by the historically strong project pipeline in Australia at present”.

…

ANZ said an estimated $109bn in debt would be needed to finance projects this year and Germany’s Deutsche Bank said the impact of the global financial crisis was still being felt four years on as banks were forced to restrict their lending.

…

The banks’ warnings are contained in new submissions to Julia Gillard’s chief micro-economic adviser in a bid to convince it to reverse a recommendation that EFIC be cut back.

The Productivity Commission has accused EFIC, the government’s export credit agency, of handing out damaging subsidies to big exporters.

Now do you understand why the ALP government has passed legislation to increase the compulsory superannuation levy on employers by 33.3% – from 9% to 12% – and is using the blatant lie that the mining tax will pay for the increase to smear over the truth, that it is small business who will wear the extra cost, even though the Treasury and RBA’s policy settings are already sending small businesses bankrupt in record numbers?

Now do you understand why Tony Abbott claims that he does not support the superannuation increase, but has refused to repeal it on becoming PM?

Make no mistake, dear reader.

That is the new dawn coming over the horizon.

What has already happened in countries like the USA, UK, France, Ireland, Portugal, Poland, Hungary, Argentina, and many more, will happen here too.

It is just a matter of time.

For more, here is a selection of previous articles, in reverse chronological order:

Grand Theft Super – A Very Subtle Form Of Theft

Another Government Raid On Citizens’ Super

It Has Begun – Labor Steals Liberal’s Idea To Steal Your Super

“And Now They’re Coming For Your F***ing Retirement Money”

Stealing Our Super – I DARE You To Ignore This Now

Money Morning Agrees – Your Retirement Savings Under Threat

Now The UK Government Is Stealing Super Too

US Treasury “Borrowing” Of Federal Pensions Brings Theft Of Private Pensions One Step Closer

Liberal Party’s Sneaky Plan To Steal Your Super To Pay Labor’s Debt

No Super For You!!

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Abbott’s Super Hypocrisy Raises Darker Questions

26 Mar

Ask yourself this, dear reader.

If the leader of a political party that proclaims supporting small business is “part of our DNA” truly believed that a new government law was bad for small business, then why would he refuse to repeal that bad law on becoming Prime Minister?

TONY Abbott has scoffed at Labor assurances that employers will not have to pay for Julia Gillard’s increase in the superannuation guarantee, but has reaffirmed the Coalition will not repeal it in office.

…

Passage of the legislation has sparked concern from employers that they will bear the extra cost, estimated to be worth $20bn a year by the end of the phase-in period, but Mr Shorten said the money would come from deferred wage increases negotiated as part of enterprise bargaining.

Yesterday, after businesses and unions rejected Mr Shorten’s explanation, the Opposition Leader said: “It’s very obvious who is going to pay for the superannuation increases.

“It’s not the mining tax; it’s not federal government. The superannuation increases are going to be paid for by business, in particular by small business.

“This is a $20bn impost once it’s fully implemented on small business and I understand why, on top of every thing else — the carbon tax, mining tax, the private health insurance tax — why small businesses are not very happy about it.”

Mr Abbott said Labor had attempted to deceive Australians over the issue.

But he said that while the opposition voted against the [MRRT] legislation and did not support an increase in superannuation, it would not repeal the move when it next took office.

Why not, Mr Abbott?

Could it have anything to do with your sneaky plan to steal our super, quietly released as formal Liberal Party policy on June 3, 2011?

A policy that has now been stolen, and implemented, by the ALP?

After all, Barnaby Joyce has repeatedly warned that public servants’ super in the Future Fund would be used to help pay down Labor’s monster debt.

But the Future Fund is tiny, compared to Australia’s ever-mounting pile of government debt. And it is positively microscopic, compared to the massive debt exposures of our house-of-cards, government-guaranteed banking system, that is teetering on the precipice.

No doubt Mr Abbott, you and your Big Banking friends would love to have an extra 3% of the nation’s combined payroll being siphoned off struggling employers directly to the ATO – as per your sneaky new policy of last June – and from the ATO straight into short-term money market interest-bearing investments, “managed” for fees plus monster salaries by parasite bankers, before (hopefully, someday, maybe) actually getting to each Aussie citizens’ personal super fund.

And no doubt whatsoever to this humble blogger, that is the real reason why you are bleating hypocritical platitudes about how the ALP’s superannuation policy is bad for small business, and making all the right noises claiming that you do not support it … while refusing to repeal it yourself.

As has been so well-evidenced by the CO2 derivatives scam, our so-called “democracy” really is “an unholy alliance of politicians and bankers versus ordinary people”:

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Three-Quarters Of Turkeys Vote For Christmas Super

20 Mar

From Yahoo!7 News:

Three-quarters of Australians support having the superannuation guarantee lifted to 12 per cent, an ACTU-commissioned survey has found.

The union movement is releasing polling results as the Senate prepares to vote on the mining tax, which would fund the three-percentage-point increase in the super contribution.

The online poll of 1000 people found 75 per cent of respondents to be in favour of the policy.

*Thump* *Thump*

Yes, dear reader.

That is the sound of your humble blogger beating his chest, to restart his shocked heart.

Stunning, is it not?

75% of people surveyed like the idea of getting money for nothing.

Because that is what the average Aussie thinks an increase in “compulsory superannuation” means.

More money for moi. Without doing anything whatsoever to earn it.

Little do they realise that any and every increase in compulsory superannuation, must be paid for by their employer.

And most Aussies are employed by small businesses, who are struggling like never before.

Indeed, there was a 48% increase in small business bankruptcies last year.

Your humble blogger has lots of anecdotal evidence from fellow small businesspeople, who say that they simply can not afford to pay extra superannuation, and will have no choice but to reduce hours and/or terminate staff if the government forces them to increase super contributions for their employees.

This survey is a classic example of turkeys voting for Christmas supper.

Because even if you are confident that your job will be unaffected, the fact is that you will suffer too if other people lose their jobs due to the government jacking up the rate of compulsory super.

How so?

Other people losing their jobs means one or all of the following consequences, that will eventually impact on you too:

Increased unemployment => reduced retail spending => more job losses => mortgage arrears increase => forced sales of homes => house price falls => bank “assets” value fall => bank credit ratings cut => increased cost of funding for banks => increased interest rates => more reductions in retail spending => more job losses => more mortgage arrears => more forced sales of homes => more house price falls => more bank “assets” value fall => more bank credit ratings cut => more increases in cost of funding for banks => more increases in interest rates =>  more reductions in retail spending => more job losses => more mortgage arrears => more forced sales of homes => more house price falls => more bank “assets” value fall => bank/s collapse => government taxpayer bailouts => “austerity” policy => increased taxes => more business failures => more unemployment => GET THE PICTURE?

At least there is one (1) politician who does seem to understand that small business is struggling, and simply can not afford to pay increased superannuation.

No, it’s not Barnaby Joyce.

It’s Andrew Robb:

TONY Abbott’s finance spokesman, Andrew Robb, has re-opened old divisions within the Coalition’s economic team over superannuation with an attack on Labor’s plan to boost workers’ retirement savings.

As Labor prepares to spruik the benefits of the super changes with moresuper.gov.au – its new website – predicting workers could be $100,000 better off at retirement, Mr Robb has again raised concerns about the impact on small business.

The Sunday Herald Sun can reveal Mr Robb, a senior members of the Liberal leader’s economic team, surprised colleagues with an attack on Mr Abbott’s policy not to repeal Labor’s boost to workers’ super if he wins office.

Andrew Robb has been on to this danger since at least November last year:

OPPOSITION finance spokesman Andrew Robb was excluded from the meeting where the Coalition’s leadership group decided it would not oppose the government’s planned increase to compulsory superannuation.

…

Senior Liberal sources said Mr Robb was “ropeable” at the decision to exclude him from the Friday telephone hook-up between the opposition leadership group and assistant Treasury spokesman Mathais Cormann, chaired by the Opposition Leader, that decided to back the super guarantee rise.

The opposition finance spokesman is understood to be pushing a message that a Coalition government will need to live within its means. He is understood to believe that with federal debt approaching $250bn the superannuation increases are unaffordable. Mr Robb previously said that at a time when many small businesses were struggling they could not afford to pay the extra compulsory super.

Andrew Robb is right.

His being right means … of course … that his viewpoint must be excluded.

Even by his own party colleagues.

Ain’t “democracy” grand?

Oh yes … about that headline story, of all the turkeys voting for Christmas.

The respondents to the survey weren’t the only turkeys having their say:

ACTU president Ged Kearney said the next few days were the last chance to pass the legislation before parliament went into a long recess ahead of the May 8 budget.

“It is time for all parliamentarians, including the Liberals, Nationals, Greens and independents to stop putting at risk the retirement savings of working Australians,” she said in a statement.

Take three (3) wild guesses at who makes millions from fees and commissions (and more) on compulsory super for employees that is paid into UNION industry super funds?

Your first two (2) guesses don’t count.

Anyone else in favour of lifting the rate of compulsory superannuation?

The Australian Institute of Superannuation Trustees, the peak body for the $450-billion non-profit sector, is also delivering the government several thousand online and petition signatures.

Ummmmm … hello?!

What was it that Wayne has been banging on about lately?

Something about “vested interests” that are “threatening our democracy”, wasn’t it?

We are living in a nation populated, and ruled, by self-interested turkeys.

If only the ruled turkeys knew the consequences of voting for Christmas supper.

If only they knew that both sides of parliament already have formal policies and systems in place to steal their super, when the time is right.

*Gobble* *Gobble* ….

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Grand Theft Super – A Very Subtle Form Of Theft

7 Dec

1930's Depression-era cartoon

The Sovereign Man, Simon Black, explains how our very system of modern government public sector financing is … just like private sector financing … nothing more than a Ponzi scheme.

Don’t miss his comment at the end, about how the UK government is effectively stealing citizens’ super. It’s just one of the several ways that our own government has already set in train the policies to do the same (emphasis added):

Say what you want about him, but Bernie Madoff was a guy who knew how to keep the party going. For years, he ran one of the largest private-sector Ponzi schemes in history and always heeded the golden rule of financial scams: make sure your inflows are greater than your outflows.

He was finally done in when redemptions exceeded new investments. He didn’t have enough cash to pay out investors, and he wasn’t able to scam more people into paying in to the scheme. As a result, Madoff finally had to admit that the whole thing was a total fraud.

Governments around the world are in similar situations right now with their own public sector Ponzi schemes. Faced with failed auctions, declining demand, and rising yields, politicians are having to resort to desperate measures.

Like any good scam artist, they’re appealing to the masses first; all over Europe, governments are sponsoring new marketing campaigns suggesting that it’s people’s patriotic duty to buy government debt.

In Spain, they’re actually issuing instruments called ‘Bonos Patrioticos,’ or ‘patriotic bonds.’ Ad campaigns say that the bonds are “good for you, good for the future.”

In Ireland, they’ve issued “Prize Bonds” which carry a 0% interest rate; instead of receiving interest, bondholders are entered into a weekly lottery contest.  Naturally, lottery winnings are only possible as long as people keep buying the bonds… pretty much the definition of a Ponzi scheme!

In Italy, they’re rolling out the country’s sports celebrities to encourage everyone to buy Italian sovereign debt.

What’s ironic is that Italy’s dismal balance sheet is almost universally acknowledged. It’s as if everyone knows the country has almost no chance of making good on its obligations, but they still feel the need to willingly throw away their hard earned savings for the greater good of political incompetence.

Thing is, it’s not the millionaire sports stars, wealthy business leaders, or political elite who are buying these bonds… at least, not in anything beyond a token, symbolic amount. It’s the average guy on the street who really stands to get hurt when the government finally capitulates.

This is a truly despicable act and amounts to theft, plain and simple.

The United Kingdom, which is rapidly reaching this banana republic sovereign debt status itself, has unveiled a plan to issue roughly $50 billion in infrastructure bonds. This would be the equivalent of issuing $300 billion in the US– not exactly chump change.

Given Britain’s already colossal debt level, private investors aren’t exact diving in head first to loan the government even more money.

Undeterred, British Chancellor George Osborne plans to ‘highly encourage’ UK pension funds to mop up about 60% of the total amount. “We have got to make sure that British savings in things like pension funds are employed here and British taxpayers’ money is well used,” he said.

In other words, ‘we are going to make sure that British people buy our junk, one way or another.’

The last year has seen numerous pension funds around the world, from the United States to Argentina to Hungary, be raided for the sake of keeping these Ponzi scheme going.  The UK is already lining up to be the next.

It’s one of the last acts of a truly desperate government to begin directing public and private savings into their Ponzi schemes.

Fast-forward a few downgrades and you can plan on seeing the exact same thing in the United States– appealing to people’s patriotism to loan their hard-earned savings (if they even have any) to the Federal government at a rate of interest that fails to keep up with inflation.

It’s nothing more than a very clever (and subtle) form of theft.

Those UK plans ring any bells?

They should … alarm bells.

Your humble blogger has been ringing that same alarm bell ever since the May budget, when our government quietly announced exactly the same plan:

… Barnaby is warning that it could happen here too.

The first steps in that direction have already begun.

From Global Custodian (Australia edition), 11 May 2011:

The Gillard government’s 2011-12 budget has proposed a raft of initiatives aimed at encouraging superannuation fund and private investment in infrastructure projects.

In light of the botched “school halls” program, and the stalled white elephant NBN – which so far has only achieved a 12% takeup rate, versus their predicted 58% – would you really trust this government to wisely and prudently invest your super in Government infrastructure?

Others have their doubts.

From The Australian, 12 May 2011:

The government’s plan to use tax incentives to encourage superannuation funds to invest in new infrastructure could be thwarted by inadequate returns on projects and a reluctance by the states to take on project risk, experts say.

First, a little “encouragement” for super funds to invest in government spending programs.

Then, when the costs blow out, or when the government debt becomes unmanageable?

“No super for you!”

We also said this:

Labor’s PM-in-waiting, the Minister for Financial Services and Superannuation, Bill Shorten, already thinks of your super as a “significant national asset” … a kind of “sovereign wealth fund”.

From The Australian, 4 May 2011:

Superannuation is our sovereign wealth fund

This week marks 12 months exactly since the government announced plans to take compulsory superannuation from 9 per cent to 12 per cent.

… our superannuation savings place Australia fourth in the world. Its $1.3 trillion in funds under management through superannuation significantly boosts national savings and provides greater retirement security for millions of Australians. Superannuation is also a significant national asset because it strengthens our financial sector.

Have no illusions, dear reader.

Green-Labor already have their eyes firmly fixed on stealing your super, using exactly the same “infrastructure bonds” scam as the Pommy government.

After all, why not?

In their twisted rationale, your super is a “significant national asset”.

“Nation building” infrastructure is a “national asset” too, right?

You know … electrified ceiling insulation, overpriced school halls, “green scheme” rorts, the no cost/benefit analysis Nation Bankrupting Network.

So of course it makes perfect sense to “encourage” your super fund (mis)manager to “invest” your super the “significant national asset” in … significant national infrastructure assets.

Then, when the economy nosedives, the banks collapse, our government hocks the taxpayer (and their children and grandchildren) to the moon to bail them out, and ultimately (like the rest of the West) goes cap-in-hand to the IMF for loans, your super that’s been invested in that “national infrastructure” … will get handed over to the IMF as collateral on unpayable sovereign loans.

Just like in every other country where the IMF is asked for “help”.

If you’ve not yet woken up to the reality that neither “side” of our political spectrum can be trusted (at all, much less) to keep their hands off your retirement savings, then consider this.

Labor has already begun the subtle, insidious process of “encouraging” your employer to funnel your future super payments directly to the ATO.

A policy stolen from the Liberal Party.

I know.

I got their letter:

(Click to enlarge)

Wake up Australia!

It’s time to take the red pill.

The Matrix: "You take the blue pill – the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill – you stay in Wonderland and I show you how deep the rabbit-hole goes." - Morpheus

UPDATE:

(h/t reader JMD) Another example of a desperately over-indebted government trying to bribe/coerce/con the citizenry into keeping the Ponzi scheme going:

‘Gold For Bonds’ in Japan as Bond Buyers Get Gold Coins

Japan will reward investors who buy reconstruction bonds with half an ounce of gold, an added incentive that could boost the return by nearly six times according to Japanese Finance Minister Jun Azumi.

Individual investors who purchase more than 10 million yen ($129,000) in the debt with a 0.05 percent return and keep it for three years will receive a gold commemorative coin weighing 15.6 grams (0.55 ounces), the Finance Ministry said in Tokyo today, worth about $948 based on current prices for the precious metal.

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It Has Begun – Labor Steals Liberal’s Idea To Steal Your Super

27 Sep

Ever heard of the ATO’s “Small Business Superannuation Clearing House”?

You have now.

It’s new.

And it is a title that should make the hairs on the back of your neck stand up.

Because what it is, is the beginning of the end of your chances of ever seeing all of your super.

Or possibly … worst case scenario, but ever the more likely the younger you are … the beginning of the end of your chances of ever seeing any of it.

Exactly as predicted and forewarned by this very blog for months now.

Your humble blogger found a very interesting letter in his In tray on arriving at work yesterday.

From the Australian Tax Office (ATO).

It is proof positive of what I have been repeatedly warning readers is coming, in our near future.

Our government … both “sides” … are planning to steal our super.

There is something particularly interesting about this letter (copy below) from the Australian Tax Office to my own small business.  It proves that the Green-Labor government are now going to steal your super by means of a policy idea that they have stolen from the Liberal Party.

Yes, that’s right.

The lazy incompetent useless public-trough-swilling bastards presently “running” our country (into the ground) can’t even come up with an original way to thieve and pillage your retirement savings – so they’ve resorted to stealing a Liberal Party plan instead.

That story was broken right here on barnabyisright.com on June 7th, just 4 days after the Liberal Party quietly announced it as their policy – “Liberal Party’s Sneaky Plan To Steal Your Super To Pay Labor’s Debt”.

I strongly urge you to first read the article linked above.

And for a full background of a world in which governments across the globe – including the USA, UK, France, Ireland, and many more – are all sneakily stealing their citizens’ super, please read “Stealing Our Super – I DARE You To Ignore This Now”.

It will help you to be properly prepared for today’s shock news.

…

…

Finished? You now understand what is happening in the big bad world of superannuation theft, and what the Liberal Party’s sneaky plan is?

Good.

Read on, dear reader, for clear evidence of why you simply cannot trust either “side” of politics in this country:

(Click to enlarge)

Get the picture?

The government’s new Small Business Superannuation Clearing House is an ATO department. The government plans to have your employer send your superannuation directly to their ATO “Clearing House” … not directly to your super fund, as it is now.

It’s all so well-intentioned, you know. Really. It’s all so very innocent … a “helpful” “reform”, only intended to save your boss time and hassle, of course.

And this is unquestionably a Liberal Party policy.

The only difference, is that the ALP’s version of this policy to steal your super is … surprise surprise … less efficient than the Liberal’s version.

Because the Liberal’s version planned to encourage employers to send your super to the ATO, along with their quarterly GST (BAS) payment. Your super, and their GST.  All in one easy payment … to the ATO. That’s Liberal Party efficiency for you.

By using the deceitful disguise of a great “helpful” “reform” to “cut red tape” for small business, the Liberal’s policy sneaks under the radar with the attractive appeal of killing two birds with one stone … saving the employer even more time and hassle.

And both sides of politics present their sneaky scheme scam to steal your super using exactly the same kind of warm and fuzzy, butter-wouldn’t-melt-in-our-mouths and you-can-trust-us-we-wouldn’t-harm-a-fly language style.

Check out the Orwellian language of the ALP’s letter from the ATO announcing this wonderful new scheme:

Are you a small business or organisation with fewer than twenty employees?

If so, you are eligible to use the Small Business Superannuation Clearing House (Clearing House).

This service offers a number of benefits to small businesses as:

  • it is free
  • it is simple to use
  • it reduces the time and paper work involved in making multiple payments to different superannuation funds and
  • it helps you meet your superannuation guarantee obligations.

Arrrrrrgggghhh! Am I in the presence of one of those pathetic spruikers standing outside a low-rent retail shop wearing a gaudy suit and brandishing a microphone whilst annoying the passersby? I think I’m drowning in snake oil!

This is pure propaganda – the doublespeak language of perception management. It is remarkably akin to that used in those patheticly transparent Readers Digest-style junk mail scams – “Congratulations, you are eligible to win a mansion on the Gold Coast … just send your money here.”

I’m “eligible” to use this wonderful new service of the ATO?  Wow! I feel so blessed, so honoured, to be a chosen one.

Now compare to the Orwellian language of the Liberal Party’s policy announcement back on June 3rd … starting with the Orwellian title –

Further relief for small businesses

…

For small business men and women, less paperwork means higher profits, boosted sales and more time with the family.

If we want stronger and more cohesive communities, we need stronger and more prosperous businesses: …

Oh wow! Yes please Mr Abbott! I want relief from the terrible burden of conscientiously looking after the best interests of my wonderful, hard-working, loyal employees, who are really more like family … I really really do!

How could we employers not all leap and dance with exultant rejoicing about that!

All that terribly challenging and time consuming “red tape” work … of clicking “print” and printing off several different envelope address labels to different super funds (or sacre bleu! hand writing each one!!) … once every 3 months … saved!

Now, all thanks to our wise and caring government, we employers can just print one envelope every 3 months. Make one electronic funds transfer.

And send all your super, dear employed reader, straight to the ATO.

Naturally, we can all completely trust the ATO to pass it all on immediately to your super fund.

And not, perchance, happen to sit on those tens of billions per quarter for (let’s say) a few weeks, and thus siphon off some short-term money-market interest for themselves first.

Yes, oh yes, dear reader … of course we can trust the ATO to do the right thing with your super.

Just like we can trust Green-Labor and the Liberals not to cast their greedy eyes over Australia’s existing $1.3 Trillion pool of citizens’ superannuation, and concoct oh so reasonable-sounding, “helpful” “reforms” that just happen to steer your retirement savings into their own coffers.

To pay down the debts they have accrued.

To fund their lavish, all-expenses-paid, high flyer lifestyles.

And … to finance their index-linked, high 6-figure retirement in the lap of luxury, after they’re done ruining the country for all the “little people”.

The new ATO “Small Business Superannuation Clearing House“.

Oh, yes. It’ll be “clearing” out your super all right.

Don’t you worry about that.

Here’s roughly how it will go, dear reader.

Mark my words.

Stage 1 – it’s already here … a “helpful” option, just for small business (who employ 60% of all Australian workers).

Stage 2 – this “helpful” option extended to include larger businesses.

Stage 3 – the option is no longer an option.

Stage 4 – a financial crisis or other plausible-sounding excuse is used to justify compulsory acquisition of some (or all) of your super. Exactly like what has already happened in the USA, UK, Ireland, France et al. Once again, it will be touted loudly by our political overlords as a “helpful” “reform” … perhaps to “preserve” what is left of your super after another market crash, via putting your super into a (compulsory) “government-guaranteed” “safe” “investment”.

Drip drip drip drip.

Fabian socialist tactics at their finest.

And most obvious.

WAKE UP AUSTRALIA.

It’s long past time for real change in our political system.

Beginning with … bringing to an end the entrenched “Two Major Party” political system.

A perverse system that is ably supported and sustained by its lifeblood – our wholly undemocratic compulsory voting system.

(Achtung! You vill vote in our vonderful “free” and “open” democracy, dear reader … yes, you vill. ‘Coz if you do not vote for one of de useless self-serving cretins that our taxpayer-financed party machines offer you as “choice” in your electorate, then ve vill fine your miserable arse … and ve vill throw you in der cooler if you don’t pay!)

There is a way to change the system, dear reader.

And your humble blogger will have more news on how you can get involved in making it happen … soon.

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Labor Begins To Steal Your Super

12 Sep

Barnaby was right.

From the Australian today (emphasis added):

Labor is planning to withdraw hundreds of millions of dollars from the Future Fund in an unprecedented move that will help the government meet its promise of returning the budget to surplus in 2012-13.

A spokeswoman for Finance Minister Penny Wong confirmed to The Australian that more than $250 million worth of assets were due to be withdrawn from the Future Fund in the 2012-13 financial year, despite the fund having been created, by Peter Costello, under the condition it was not to be touched before 2020.

The government, which has forecast a surplus of $3.5 billion in 2012-13 after several years of heavy deficits, claims that the assets will be returned to the fund at a future date.

But the opposition has slammed the move as “reckless and fiscally irresponsible”.

“The fact is that the government is planning to raid the Future Fund, including the revenue from the expected sale of Future Fund assets in its revenue forecasts, yet they haven’t been able to point us to where in the budget that money is supposed to be going back into the Future Fund,” opposition assistant Treasury spokesman Mathias Cormann said yesterday.

Mr Costello, the then treasurer, established the Future Fund in 2005 to cover the costs of future public servant superannuation liabilities. At the time, he told parliament: “The fund will only be drawn upon at the earliest in 2020 or a time when an independent actuary determines that the fund’s assets are sufficient to offset the unfunded part of the government’s accrued superannuation liabilities.”

The Future Fund’s own website sets out that “withdrawals from the Future Fund may only occur once the superannuation liability is fully offset or from 1 July 2020″.

…

A spokesman for the Future Fund confirmed the anticipated withdrawal was known to the fund and that this was the first time a withdrawal had been included in the budget bottom line.

Senator Cormann said the “real concern is that, if they get away with their plans to raid the Future Fund now they will do it again and again, every time they need more cash to fund their wasteful spending”.

“The Future Fund was set up by the Coalition after we paid off the Hawke-Keating debt and it shouldn’t be touched until the public service superannuation liability is under control,” he said.

Remember Barnaby Joyce’s forewarnings before this year’s May budget?

Before the budget (5th May):

In response to a question I put in Senate estimates, Treasury revealed that $64 billion of the difference between our gross debt and our net debt is made up of the cash and non-equity investments of the Future Fund. The Future Fund is there to cover the otherwise unfunded costs of public servants’ superannuation.

That is a little fact that the people of Canberra might be interested in. When Wayne mentions net debt translate that to, I am going to pay his debt off with my retirement savings.

And right after the budget (13th May):

Of course, the public servants will not be happy when we use their retirement savings, put aside in the Future Fund, to pay off some of Labor’s massive debt.

Barnaby was right when he forewarned of the US debt crisis.

And he is right again, about your super being stolen by our government.

Think it is only public servants’ super that is at risk of being stolen by our government?

Think again.

For quite some time now, your humble blogger has been covering the wave of government confiscations of private citizens’ retirement funds that has been sweeping the over-indebted Western World, and warning readers that it is going to happen here too.

The reason this has been happening in so many countries abroad, including the USA, UK, France, Ireland, Poland, and more?

Exactly the same reason as cited by our own government now.

To help meet the government’s budget targets. With the vague promise that the “borrowed” monies will be returned at some unspecified future date.

And we all know what most politicians’ promises are worth.

Barnaby Joyce is the only politician in our nation with the wisdom, foresight, integrity, and courage, to publicly confirm what this blogger has been repeatedly forewarning.

That government theft of private super savings, is a real and present danger here in Australia too.

And don’t kid yourself that a Coalition victory at the next election will save us.

The Liberal Party quietly announced a new policy on June 3 this year, that should have every citizen deeply concerned. It represents an even more blatant move to have the government get their hands on not only public servants’ super, but everyone’s super.

Learn more, in this most recent of my many previous blog articles on the topic:

Stealing Our Super – I DARE You To Ignore This Now

UPDATE:

Senator Wong denies that their plan is to steal public servants’ super.

Are you convinced?

I’m not.

Wong’s very opaque counterclaim is that they are “simply making a small change to the types of assets it holds”. The key here is having a very clear definition of exactly what is meant by “a small change”, and “types of assets”.

This denial in no way convinces me that Labor are not shuffling/stealing money (and/or figures) to meet their objective – a media headline of return to surplus in 2012-13. After all, this government has form for fiddling the books, as documented numerous times on this blog … and openly conceded by former Finance Minister Lindsay Tanner in his book after retiring.

And not just form for fiddling the books … there’s also this:

(March 2007) Peter Costello: Rudd will mortgage future, leaving kids to foot

(April 2009) Kevin Rudd raids Future Funds

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Who To Believe On Super?

16 Aug

From ABC Insiders:

BILL SHORTEN: Well in the last two years, and whilst the final figures haven’t come out from last year, Chant West who are one of the organisations who monitor [superannuation fund] returns show that the year before last the returns on average for a balanced fund was 8.9 per cent. The year just passed – 9.2 per cent.

From ABC TV’s Alan Kohler in Business Spectator:

For the past five years the market has given nothing. After the 20 per cent correction between April 11 and August 8, the ASX 200 accumulation index (capital return plus dividends) has now produced a zero five-year return.

From ABC Insiders:

BILL SHORTEN: As an actual investment product super’s done reasonably well over the last 20 years.

From Alan Kohler:

The first fifteen years since the superannuation guarantee legislation was first introduced in 1992 went extremely well. The compound annual rate of return provided by the sharemarket – like manna from heaven – was 15.5 per cent…

Of course, not all that return dribbled into the members’ accounts: the superannuation industry, consisting of advisers, platforms, fund managers and the super funds, were furiously skimming the accounts and getting gloriously rich.

Still, anyone retiring in 2007 was a big winner and didn’t begrudge the skimmers their little portion. Everyone was a winner!

But now life has changed completely. The five-year total return from the sharemarket is zero; the 20-year total return is now below 10 per cent; the ten-year return is just 6.6 per cent. The fees skimmed off by the industry – which of course continue even though the balances have gone backwards – now represent a much larger percentage of the long-term return.

Suddenly accumulation super lacks the vital ingredient of accumulation. And there is a clear risk that the bear market will continue for some time yet, with both Europe and the United States mired in debt.

From ABC Insiders:

BARRIE CASSIDY: So what do you say then to people who got a bit of a fright this week, that they’ve just got to hang in there?

BILL SHORTEN: Well certainly if you’re right at making a decision to retire in the very near future, if you’re a self-funded retiree and you’ve got a portfolio of shares, this has been incredibly tough; just as was the first global financial crisis in 2008.

But I would say that now is not the time to make snap decisions. I would say that in the long run superannuation in the last 10 years, say if you’ve been in an industry fund, it’s been 4 per cent each year. I would say that the shares market generally has performed well in Australia. I do believe that things will improve.

Hmmmmmm.

Question.

Why is it that anyone other than politicians who gives financial advice, has to be licenced to do so, or risk facing the full force of the law?

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I Should Have Listened To Barnaby Joyce – Sure Beats Listening To The “Experts”

10 Aug

A really great article by journalist Jill Singer.

Filled with honesty.

Humility.

And humanity.

From the Herald Sun:

Experts did nothing to prevent fall

It’s not so very long ago that only the wealthy invested in shares.

Nowadays, though, it seems even the lowest-paid workers must monitor the All-Ordinaries Index if they want to know how their final years will play out.

Will their super funds provide them with enough to live out their allotted years without relying on the kindness of strangers or the vagaries of government largesse?

Or will they work for as long as their bodies and minds allow before succumbing to a lesser life of niggling poverty, insecurity and guilt over being a “burden” on others?

Little wonder that the world seems engulfed by fear and greed.

In this age of compulsory super and self-managed funds, life has become a terrifying gamble.

Having money tied up in superannuation has become akin to being caught in a high-rise building during a bomb scare.

You know that if everyone starts running for the lifts the odds are that people will get crushed. Then again, wouldn’t it be nice to be the first one out of the door?

If we earn an income, we have no choice but to invest in super. But how on earth are ordinary folk expected to manage it when we know that if you have two economists, you’ll get five opinions?

I was like most small investors when the proverbial hit the global economic fan yet again last week – torn between the squirrel-like urge to shift my rapidly dwindling super into cash or to swallow the Government’s line that we are a privileged and robust economy.

In the end I chose the path of least resistance and did nothing.

I’m just not going to look at the damage and will only uncover my eyes when the fire has finally passed …

There are lessons for us all in this.

I should have listened to Nationals senator Barnaby Joyce when, in 2009, he warned about the potential (and then unthinkable) dangers of the US coming close to defaulting on its debt.

I should also have listened to Kenny Rogers: “You’ve got to know when to hold them, know when to fold them. Know when to walk away and know when to run.”

Sure beats listening to the advice of “experts”.

UPDATE:

One wonders whether Jill might now begin to reconsider her murderous devotion to the “experts” of the global warming cargo cult:

Then there’s David Murray, chair of Australia’s $71 billion Future Fund and recipient of a $28 million golden parachute from his time running the Commonwealth Bank. Murray states there’s no link between global warming and carbon dioxide emissions because carbon dioxide is necessary for life, colourless and odourless – and therefore can’t be considered a pollutant. It’s a popularly held view.

Andy Semple of the Menzies Institute claims it’s “refreshing” for someone with Murray’s standing to take on the global warming “scam” by expressing such views.

Really? I’m prepared to keep an open mind and propose another stunt for climate sceptics – put your strong views to the test by exposing yourselves to high concentrations of either carbon dioxide or some other colourless, odourless gas – say, carbon monoxide.

You wouldn’t see or smell anything. Nor would your anti-science nonsense be heard of again. How very refreshing.

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