Last week there were cries that reforms proposed by the Cooper Review into Australia's superannuation system 'could devastate Aboriginal art'. The Review was handed down last week, and recommends an end to art, jewellery, wine and collectables as approved investments in self-managed superannuation funds. It views their inclusion as a tax dodge that benefits the rich but does nothing to enhance the material wellbeing of the average retiree.
As the year-long process was getting underway, veteran social services advocate Julian Disney described Australia's current superannuation system as 'a magic pudding for the wealthy, a poor deal for low-income people and a straitjacket for too many of the rest'.
Earlier last year, an Australia Institute research paper claimed that superannuation tax concessions for the wealthy would cost the budget $24.6 billion in 2008–09, rivalling the $26.7 billion annual cost of the age pension and constituting a fifth of income tax revenue.
It was clear that the super system needed to be transformed from being a tax rort into an instrument capable of ensuring working Australians have the financial resources necessary to enjoy rather than endure their retirement. Part of the problem was that the current system is incomprehensible. In a subsequent paper, the Australia Institute called for the universal default superannuation fund which the Cooper Review has now recommended.
The Institute's reasoning was that most Australians do not exercise their right to make choices about their super because it's too complicated, and not something they need to worry about in the here and now. The financial services industry exploits this indifference, and there are few complaints about the management fees it charges which the Australia Institute's researchers argue are 'simply not value for money'.
Most Australians have more immediate concerns, but essentially their future prosperity is being eroded to bolster the profits of the financial services industry.
Like the Australia Institute, the Cooper Review takes the indifference of Australians as a given, and recommends the default fund that it calls MySuper. Predictably the superannuation industry was unimpressed, and labelled the reform proposal 'paternalistic'. Review author Jeremy Cooper (pictured) told the ABC's Lateline Business that the whole concept of superannuation is paternalistic, but brilliantly so.
'It is paternalistic. We just have to accept that … given that it is compulsory, we're saying it has to work for people whether they're interested in it or not.'
That could be written off as a glib comeback on the part