Why is it that governments can’t stop continually fiddling with superannuation? Can’t they see how counter-productive it is? Obviously not.
Perhaps it’s because politicians and bureaucrats are on such a good thing with their own superannuation and pension arrangements, paid for by the taxes of working Australians, that they have no idea how their actions affect attitudes towards retirement savings.
Continual fiddling and adding layers of complicated rules makes superannuation increasingly confusing and raises the question “why bother”.
It is well known that people generally don’t save for their retirement – certainly not young and middle-aged Australians. So, if government wants us to fund our own retirement, surely it makes sense to ensure superannuation is simple and attractive?
And there’s the rub. It seems all governments pay lip service to the need for us to fund our own retirement so as to reduce the cost of aged pensions on the public purse, but deep down they don’t really care. Their focus is on the short term – let’s get re-elected – and any long term problems in the Australian economy don’t really seem to concern them.
Whatever the reason, it is hard to find anyone who is enthusiastic about superannuation. Most people I talk to are looking for alternative saving strategies, or simply not bothering to add to their super savings any more.
Another irony in all this is that while the government seems intent on making superannuation even more complicated and, to most, even less attractive, at the same time they are alienating the people who they need to rely on to promote the need for retirement savings. I mean of course financial planners.
Making life more difficult, and less attractive, for the planning industry could easily result in fewer financial planners available to help the increasing number of Australians who need to invest for their future. Helping Australians understand how to best invest and avoid the traps of the complicated tax and superannuation regulations is a major contribution that financial planners make.
By making the rules so complicated, Governments ensure it is essential for every Australian to get advice. Why then, at the same time, does the present Government go over the top in regulating the people who are there to help?