Superannuation, ‘the unlucky lottery’

Superannuation is one of the biggest scams ever perpetrated against the Australian working class. 

Instead of providing decent wages and a guaranteed liveable pension, the government requires money to be taken out of young workers’ incomes when they need it most and put into the stock market, a giant casino, while pensioners are left to struggle on poverty incomes. 

Superannuation creates a multi-tiered retirement future. Had a low-income job your entire life? You can have a low-income retirement. Spent years out of work with an injury? You can have a low-income retirement. Spent several decades looking after children? You can have a low-income retirement.

But if you are a well-paid manager, you can have a well-paid retirement – subject to the stock market doing well.

No wonder it’s called the “unlucky lottery” by the Productivity Commission report’s co-author and deputy chair Karen Chester. Scandalous as it is – uncovering some of the most unconscionable rip-offs through fee gouging, unusable insurance and administrative costs – not for one moment does the report question the entire rationale of the $2.6 trillion superannuation juggernaut. 

The inquiry is designed only to make superannuation more palatable, to be more efficient for the capitalist class, to shift more retired workers off government pensions and to remove any option of union say over the funds. Just look at terms of reference, such as “offset costs to government”. 

Leaving aside for the moment whether the scheme should exist or not, just like the government that commissioned the investigation, an anti-union agenda runs through the whole report. It is timely, say the report’s authors, to ask whether the “vestiges of the old system”, the linkage to awards and workplaces, should live on. 

That the system is inefficient and robs workers is without question. The Daily Telegraph’s Malcolm Farr points to “‘bamboozled’ savers paying for accounts they didn’t intend to have and ‘zombie’ insurance policies that do little more than soak up savings”.

The report details a staggering $3.9 billion every year going to the funds rather than the contributing workers. Another $2.6 billion every year is lost to workers who, through having multiple jobs, have several small superannuation accounts that lose money from either fee gouging or poor fund management (a scandalous one in four). 

And that doesn’t even cover the estimated $2.85 billion stolen from workers by employers’ non-payment of the superannuation levy. (The government’s solution here is to offer an amnesty to employers who’ve dudded workers for up to 25 years!)

Instead of scrapping the entire system and reorganising the tax system to increase corporate and wealth taxes to fund a universal liveable pension scheme, the draft recommendations include notions such as “empowering” workers to choose, greater competition and more regulation at the board level. 

The irony is not lost when these “solutions” are touted in light of the banking royal commission exposé of the total failure of boards, the false choice of banking services and so-called competition. As if competition in the system, with its 40,000 products, has delivered anything positive for workers.

The report’s release set off an avalanche of commentary, highlighting its damning critique, but all rushing to protect the funds’ supposed overall integrity. The government’s confected concern for workers’ superannuation is belied by its consistent anti-worker agenda of penalty rate cuts, wage restraint and pushing thousands off the pension.

Labor wants to save the super system. After all, the ALP forced it through as part of its Accord wage-cutting process. Wedded to the fundamental neoliberal project of user-pays retirement, Labor has had little to say except to protect industry funds and call for reforms that don’t “crush competition”.

The ACTU’s six-point response, including better coverage for gig workers and women, only highlights that industry funds, no less than retail funds and the union movement itself, have failed to provide a decent retirement income for millions of workers. And the six-point claim, with no strategy to win it, is a meaningless wish list. 

But is superannuation worth saving? The answer must be a resounding no. Instead, the demand should be state-funded pensions for all and an end to the slush-fund for capital this obscene superannuation behemoth has become.