Incoming ALP senator wants a ban on for-profit super funds

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Incoming ALP senate candidate Tony Sheldon has promised to pursue legislation to ban for-profit super funds if elected.

Mr Sheldon, who stood down as the national secretary of the Transport Workers Union (TWU) in August to pursue a position in Parliament, told the Australian Financial Review that “retail funds have no place in superannuation”.

“There is a fundamental cultural difference between for-profit [funds] in this space in comparison with best return for members which is delivered by not-for-profit funds,” Mr Sheldon said.

“It raises the fundamental question – are they fit and proper to be in that space? Clearly they’re not.”

Mr Sheldon, who will soon step down from the TWU Super board, also explained that industry super funds should take a more activist view of their duties to battle corporate tax avoidance.

“As super funds, we have to be raising the question, should we engage with companies that are involved in wage theft? Should we be engaging companies that are tax rorters?”

Mr Sheldon explains that a “holistic interpretation” of trustee obligation under superannuation law would mean looking at the effect of tax avoidance, leading to less government revenue, which means members will be denied access to health and other services in future years.

He also said that companies that worked to lower their wage bills would mean that members with poor pay would have less retirement income later.

Mr Sheldon has the No.1 spot on the NSW Labor senate ticket for the next election, guaranteeing him a seat, and has used his position to push for more ethical behaviour from companies before.

Last year, he lobbied industry super funds to withdraw investments in cargo-handling company Aerocare, which was involved in a dispute with the TWU over wages and conditions.

“We need to take responsibility for how our money is invested and what effect those investments will have on members now and in the future,” Mr Sheldon said.

Mr Sheldon said the job of super trustees was not just to ensure dignity in retirement, but a dignified path to retirement.

What do you think? Should for-profit funds be banned from competing in the superannuation marketplace? Should super funds take a more activist stance to push for higher wages and less corporate tax avoidance?

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Written by Ben

125 Comments

Total Comments: 125
  1. 0
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    Bravo Mr Sheldon.

    Time for a root and branch review of income policy, whether in retirement or not.

    Neoliberalism has undone the social wage benefits that helped sustain decent living standards for everyone but the very rich, and transferred productivity gains in corporate profits, and more wealth for the very rich.

    If I lived in NSW I would vote for a senator with the capacity to think beyond the immediate symptoms, to the systemic issues.

    • 0
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      What do you think industry funds do then? Unions do very well out of them so they can’t be non profit.

    • 0
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      That OG is pure propaganda. The Independent reps, Employer reps and Union reps all receive the same Board payments. If Union reps choose to donate their income back to the union so be it. No different from Banks donating profits to the LNP or the IPA.

      The Employer reps could donate back too but I bet they don’t. All that inherent greed would forbid giving anything to anyone.

      Paying wages and costs as you know comes out of profits. Unfortunately the Retail Funds have shareholders to feed as well and that’s where the problem lies. Greedy shareholders wanting too much of the action.

    • 0
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      Now you know why I have my own SMSF.

    • 0
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      Dont know what oldgeezers agenda is here but its becoming very tedious and obviously political. anyway the industry super funds way outperform the retail and bank ones so for all practical purposes and for the average person the answer is obvious !!

    • 0
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      My SMSF outperform both industry and retails funds so no agenda here and certainly not a political one.

    • 0
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      OG – at it again. Rolling out the coalition party line.

      For the thousandth time: INDUSTRY FUNDS FAR OUTPERFORM RETAIL FUNDS. That is indisputable other than from trolls claiming otherwise. The same people likely were debunking climate science a decade ago.

      The sooner Australian super is freed from the grip of the retails side, the one where CEOs and their staff milk the fund relentlessly, the better. After all the money in these funds does not belong to the top end of town, although this cohort believes otherwise.

    • 0
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      Agree about climate change it belongs out the windows with your story about industry funds outperforming retail funds.

      Yes climate change is real and fortunately for us it is as without it we would not be here. We ourselves are a result of climate change and no we can’t stop it either.

    • 0
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      OG? I’m mortified. You are actually speaking against your parties propaganda. Amazing.
      We CAN change the future but not with big business demanding its coal money stream go on unabated. Also, we need far more to halt what is happening: reafforestation (farmers and loggers about to throw up), reducing population (big business about to start the next war – get the printing presses rolling Rupert) and renewable energy on a planet wide scale.
      Ok OG…..unlikely mankind has the ticker to stand up to the money and do what it needs to do in order to survive.

      Funny that you can’t confront the TRUTH about Industry Funds. Nothing personal. The figures have been in for a long time. You can run but you can’t hide! INDUSTRY FUNDS BEAT RETAIL FUNDS ON ALMOST EVERY MEASURE! End of BS.

    • 0
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      As I said before Mick my super was in a couple of industry funds 20 years ago and they were doing nothing year after year. So I set my own SMSF and it has outperformed them every year since. I recently checked what it would cost me to have an industry fund manage my super and the cheapest fee was $22,000 per year plus all the hidden costs.

    • 0
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      As you state union reps in most instances donate their fee back to the union, does that mean they can then claim that donation back on their tax return thereby reducing their income and tax payable, and then do they have to declare their donation to the labor party and does the labor party declare they have received that donation, if so does that mean that the union and the labor party are double dipping, ie the rep reduces his tax payable and the union receives a donation. We should be looking at all the ways these grubby politicians from both sides of the political spectrum are stealing your money.

    • 0
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      Old Geezer. You sure live up to your name! You embarrass yourself in making statements not supported by evidence and I despair for the future in that there are those who think like you! Hopefully you are too old to influence with your way of thinking. I have hope for the young in mind and heart.

    • 0
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      Kaz I teach many young people financial and other life skills so my legacy will live on well after I have left the planet.

    • 0
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      MICK the COALition don’t want SMSFas their mates at the banks make very little from them.

    • 0
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      Old Geezer is correct in stating SMSF are cheaper and can be run more profitably than either retail or industry funds. Money invested outside of super is even cheaper and far safer from sovereign risk. Advisors will not tell a couple they can make $58 000 a year tax free outside super with very few costs and a tax agent bill around $250 a year.

    • 0
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      I understand SMSFs can potentially make more and I am assuming those who have done well have gambled on one asset alone: real estate in Sydney or Melbourne. That is not brilliant investing. It’s luck.
      Sure the fees are lower but then an annual audit takes a big hit unless you have a large portfolio. Horses for courses.

      Rae – this is the place to share HOW people can make $58,000 tax free outside of super. Sounds illegal but seeing is believing.

    • 0
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      MICK, you are like a troll on steroids.

    • 0
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      Spoken like a half wit trolling for his government master.
      Get off the grog mate and go to bed and sleep it off.

    • 0
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      Heeeey – I’m drinking a beer! But pardon me roy……is… oh, forget it… you know it by now….

    • 0
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      MICK I trade indexes on a low cost platform. It’s quite passive but can be rewarding provided you buy low and take profits promptly. I don’t need to sell that often but close to a coming high and when I need funds. Keeping an eye on goings on requires time, copping the losses requires good self esteem and selling requires discipline.

      During this boom I could make $20 000 to $30 000 a quarter from a pot of $400 000.

      Most of the Industry Funds do exactly the same thing. The fees and charges should be based around actual costs plus the cost of maintaining fund offices, staff etc. It is always going to cost more to employ people than to do it yourself. It’s not rocket science.

      And of course these traders are very conservative and follow formulas so cannot be quite as nimble as the individual.

      I hold only my own home and half an apartment in the Brisbane CBD. The return is not particularly good but suits the family especially as grandchildren head off to Uni.

      It is sometimes rented and sometimes not depending if family need the use of it.

      It was not bought for investment but for lifestyle. I have found property investment my worst failures and likely to lose me capital which is very bad indeed.

      I do not use debt now at all and have Superannuation in a large Industry Fund. I agree Industry Funds are cheaper and provide better returns than most Retail Funds bar the top fliers who actively trade well and take large fees from large profits. They outdo the Industry Funds but are not open to the average worker anyway.

      Real Estate has done well in this latest boom but sharemarkets have done even better.
      The investors in currency trades and commodities and debt have also done well if cautious but it’s the weight of all that QE money that is creating this boom. Nothing to do with luck at all just Central Bankers doing what they do best. Stuffing markets up.

    • 0
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      I suggest you read the work of Benjamin Graham, Buffett and Bogle. They explain quite well the methods of investing in markets for value and income.

      The beauty of a platform is the tax advice for the accountant is done for you. Thus the low accounting fees needed to be paid.

  2. 0
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    Totally agree Travellersjoy! No place for taking profits from OUR retirement money!!

  3. 0
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    Income policy is a joke. Millions of workers have to be propped up by Government money as the pay is too low.

    Either stop taxpayer sponsorship of business through wages support and let prices collapse to something vaguely resembling what the median wage can buy or force businesses to fairly share productivity and profit with their workforce.

    Corporate Socialism has gone quite far enough. The Prices and Income Accord has crippled income and left prices to gallop away requiring all that Centrelink topping up which is crazy.

    • 0
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      I agree with you as regards BigCorp, Rae – the problem there would be the inordinate impact on the small business middle classes – who some say are squarely in the sights of BigCorp and it BAPF (bought and paid for) government.

      Current policy clearly shows a desire to push p0rofit towards BigCorp and its shareholders in the mythical belief that ‘trickledown’, which has never worked yet, will somehow sustain the economy.

      Amazing that income support ends up as super payment anyway – so maybe cut out the middle man.

      What was that Indian wisdom thing – only a white Man would cut two inches off the bottom of a blanket, sew it to the bottom, and then say he has a longer blanket.

  4. 0
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    Well, I know Tony Sheldon, so check me for bias.

    I’ve long advocated that all super funds be under one roof which is essentially not for profit…. so I’d have to agree with Tony. We may not agree on nuts and bolts, since I also include industry funds, but there you go….

    • 0
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      Oh – Sheldon always was an honest Union man – I’m surprised he’s finally sold out to the Labor Party as it now stands (or sits on its arse) for a shot at Parliament.

    • 0
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      So you are a union man
      Explains your left bias and inability to think objectively
      Still doesn’t explain why you are not able to grasp simple concepts like imputation credits though

    • 0
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      Being a Union man and upholding the rights of all equally and fair play is not the same as being a ‘leftie’… any more than your being an alleged SMF operative with mega-bucks and massive income percentages makes you a ‘rightie’….

      I am comfortably somewhere in the middle, like most people, but I uphold and value fair play – a trait learned on the Rugby field…..

    • 0
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      Think objectively olbaid? You are incapable of that. All you can do is repeat the slogan of the day from your party director. You rarely have anything to say that genuine posters can digest.
      Don’t be too concerned about the serve TREBOR. To be expected as you are not conversing with real people. Real people offer factual views based on honest facts. You’ll never get these from trolls posting rubbish and party dogma.

  5. 0
    0

    Just goes to show, socialism is alive and kicking in the union movements. I would listen to Comrade Sheldon if union controlled industry super funds didn’t waste money on advertising at major events and similar. Comrade Sheldon only wants For Profit Super Funds abolished so that his union control of funds is increased. I would listen if these union controlled funds were banned from running political advertising during the state and federal election cycles.

    • 0
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      Socialism is alive and kicking in Australia all over the place. In fact all Chinese State Businesses, electricity, ports etc support communist China. The LNP seem to think this a great idea. Do not under any circumstances help out our own workers though. Socialism gone too far to pay people decent wages.

      Will you also ban the Feudal Lords from advertising or only the worker’s groups?

    • 0
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      That’s the difference between International Socialism and (for want of a better term) National Socialism, Rae…. many confuse the difference between the actions of the German National Socialist party and what National Socialism is really about….. but you can’t help sufferers from self-inflicted Optical Rectalitis – viewing the world upside down and confusing signals from their anus with those from their eyes…..

    • 0
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      Your last sentence says it all Rae. The media is the perfect example: they run blatant propaganda and groom their own for government whilst crying bias when the ABC gives anything to do with Labor any positive air time. God forbid if the ABC investigates the dirt in the coalition machine. That is apparently not fair.

  6. 0
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    Conflict of interest much Mr Sheldon?

    But then Mr Shorten has already promised to run Australia like a Union so presumably the Unions will do very well out of industry super funds (even more than currently) if Mr Sheldon is successful in prosecuting his ideas.

    Mr Shorten will tax you to the hilt (all the expensive promised currently being made) lower your income (removal of franking credits, increase CGT and remove negative gearing) and then the Unions will take what’s left (super payments back to unions even from none members).

    Bring on the election!

    • 0
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      People are just so stupid if they election Shorten and have the country run by unions. Then again might be some real bargains in housing to be picked up after they destroy the place economically.

    • 0
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      They will have to be quick the way NAB,CBA AND AMP and all the others are ripping us off even after death with the Coalition no wanting a Royal Commission into banks where they getting kick backs.

    • 0
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      If no one tells them you are dead then how do they know not to charge you? When they are notified your accounts are frozen so they have to wait until they get the go ahead for some sort of payout to refund the charges made after you died. Learn the rules.

    • 0
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      Correct OG, when you notify the bank of a death, funds cannot be taken out but deposits can be made into the account.

      If the bank is not notified then any deductions such as direct debits, etc will continue until the bank is notified. Simple.

    • 0
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      Some banks wont even allow deposits.

    • 0
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      https://au.finance.yahoo.com/news/apartment-projects-blacklisted-major-aussie-bank-203150522.html?utm_source=Campaign_Monitor&utm_medium=Edm&utm_campaign=DailySnap_Newsletter&utm_term=DailySnap_Newsletter&ncid=dailysnapshotau_dailysnaps_yaptekbs7gs

      “An undisclosed major bank has a blacklist of 6700 apartment projects across Australia.

      The projects are where buyers are either refused loans or are offered reduced loan to value ratios (LVR).

      Also read: 20 highest-paying Aussie industries revealed

      The list has been obtained by The Australian Financial Review from the mortgage broker, Home Loan Experts. The newspaper article only pinpointed a handful of effected projects.

      It reveals projects where buyers have either been denied loans or offered less funding are 19 Larkin Street in Camperdown in inner-city Sydney, Finbar’s Aire apartments in West Perth and Meriton’s developments on Main Beach on the Gold Coast and 1 Janoa Place in Chiswick, inner west Sydney.

      Sydney-based Home Loan Experts noted “blacklisted” projects vary across the banks.

      Areas which are consistently “blacklisted” however include Wolli Creek and Zetland (above) in inner south Sydney and the Brisbane CBD given a potential oversupply of new units or the bank reaching maximum exposure of loans on a project, managing director Otto Dargan said.”

      Intrerestinger and interestinger…..

    • 0
      0

      Yes TREBOR and unfortunately nothing can stop a liquidity crisis once it has begun.

      There are also only 9% of unionist workers now anyway, most in the public service or dangerous job sites. Everyone else is pretty much fair game now.

      Had news of two younger friends made redundant just today. No union support and they are in big trouble with high rents and car leases to service until their contracts run out.

    • 0
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      when the unions were in power, unemployment was high.

      until one day Aussies cane to their senses and ditched the unions but not before they destroyed our manufacturing sector

    • 0
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      Unions don’t hold power in government, diablo…. and the manufacturing sector is run by its managers…. who from your statement were and are not up to the job…

    • 0
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      Unions never destroyed our manufacturing industries. Greedy business people demanding to import cheaper goods and their coalition government did that.
      Paul Keating did not help by deregulating the dollar but it was John Howard who started the flog off mentality and it was his government which let the world’s third biggest LNG deposit be sold to foreigners. Do I hear ‘we have no gas’ and have to frack on fertile farming land going around again. Of course not. Can’t have people telling the historical facts can we.

  7. 0
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    The only one to profit from my Superannuation should be me not banks and there share holders simple.

    • 0
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      Whinger 01, if you only want you to profit (or lose depending on your financial expertise) from your Superannuation then set up a SMSF.

    • 0
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      I agree the only way you keep all the profit is set up your own SMSF which can cost anywhere from $1000 up in expenses.

    • 0
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      You are right there, OG… unfortunately without a genuine not for profit, costs will always be there.. but running your own is fraught with dangers…

      I’m considering getting into shares, but I will not, on principle, buy imputed dividend shares… I’ve always honestly paid my taxes and will continue to do so…. and I neither need nor want any ‘tax dodge’…..

      I’m one of those sad cases who actually believe in things nowadays….. as did Tony Sheldon once – but I never thought he’d go for a political seat to shore up his retirement and kow-tow to the ‘system’ by taking that option as a ‘reward’ for service.

      Some of us don’t need rewards or medals… just the satisfaction of a job well done…

      I guess I’m out of touch ……

    • 0
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      You need to explain why you think investing in shares that attract imputation credits as being in some way immoral, which is what you seem to be claiming, if you have shares that are franked, what ever amount they are franked at is the amount of tax that has been paid on your behalf, so as in any investment you are allowed to claim that tax back against your income, if you have paid more tax than you are liable for then you are allowed to claim that tax back, if your income exceeds the tax free allowance you are not entitled to any refund, this is exactly the same for any investment you make. Try not to get caught up in Shorten’s politics of envy.

  8. 0
    0

    MLC/NAB wanted $2000.00 to set up a transition to retirement plan for me 5 years ago CBUS sent me the 2 page application by post with a return paid envelope and no cost. Who is profiteering here. MLC/NAB said I would have no up front costs as they would take the $2000.00 out of my account what would the cost have been in the long term with lost interest on the $2000.00? Giv me an Industry Fund any day.

    • 0
      0

      How much Is CBUS charging you?

    • 0
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      The retirement plan for not for profits usually cost nothing. Just a bit of paper filling in and you also get an annual free advice service.

      I looked t a MLC prospectus back in 2006 and if I’d taken it would have lost hundreds of thousands and paid fees averaging over 4% of profits.

      It was a joke but I bet the gullible fell right into the fancy office and glossy brochure.

    • 0
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      I recently looked at what it would cost in both retail and industry funds to manage my super. The cheapest one was $22,000 a year and the dearest over $40,000. That’s after they have all taken their profits etc out of the funds so I’d hate to even guess what the real cost would be.

  9. 0
    0

    Great idea at last a person that thinks with his brain not his wallet like a lot that comment on this site.You will hear the tired old greedy group that oppose this idea,perhaps they have not followed the Royal Commission.

    • 0
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      Some of us have to think with both are brains and wallets as we don’t get hand outs to live.

    • 0
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      Course you do, OG – DI, CGT and NG… everybody has their cut from Big Guv….. none more than businesses….

      Shorten’s scheme is not to abolish those thing – DI is to be returned to its pre-Costello blunder paradigm – there is no longer money in the till due to the LNP’s massive borrowings to fund such gifting; CGT is ‘concessional’ even though NG has been applied throughout life of the ‘project’ and is thus wrong – you should get one or the other, not both; and NG for housing (only – I copped some NG for a stage production I funded and ran) is providing benefit to investment in deadstock instead of real infrastructure for the current and future benefit of the nation.

    • 0
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      Good Trebor and I hope you enjoy sharing your OAP with another 500,000 more pensioners. I will just sit on the sidelines and watch the show.

    • 0
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      Leading economists predict a return to surplus sooner than projected by the LnP

      The tax cuts and sound economic policy, supported by growing tax revenue will see Australia return to a surplus budget by 2020. The first time since the Howard Costello glory days

    • 0
      0

      Yes olbaid and we have never been better off than now and
      of course that is the result of good economic policy.
      We are in real trouble if a dick like this Sheldon gets in.
      I thought he would be better just steeling funds from the union members
      more money in that.

    • 0
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      Robbo they will do what it takes to get their grubby hands on our super money.

    • 0
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      Well Olbaid let’s hope the private sector can take up the slack then. It’s problematic when a Government is bent on surplus going into a demand collapse. The private sector will need a lot of capital or be prepared to take on even more debt.

      The Australian Government has never ever defaulted on debt unlike the private sector which does so every so often. Those banking/credit crisis are far harder to fix than a Sovereign default believe it or not.

      I seriously doubt Morrison has any idea about economics or history and there does not appear to be an historical economist within cooee of Canberra or they’d be worried about the boom collapsing and a liquidity trap instead of a piddling $600 billion deficit.

      Not that I think Labor will be any better in fact I think their plans and legislations are already causing problems and they are still in opposition.

      So when we get a surplus what then? Will it fix the balance of trade, sort out the hospital bed shortage, the energy fiasco, global warming or even schools for those hundreds of thousands of babies? Didn’t think so.

    • 0
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      You are a laugh a minute, diablo – and you, OG ,…… you have the right to sit on the sidelines, Don-kay – you just don’t use it!

  10. 0
    0

    This is an interesting development in the Mutual v Proprietory agrument which has been waged since the insurance companies were established back in the 1800s.
    Can we learn from History, or are we destined to repeat the mistakes of the past?
    In Australia the large mutual life offices, AMP, NMLA, CML, T &G, were dominant, until recently their Boards were persuaded to demutualise and become proprietary offices. This led to amalgamations and takeovers until AMP Ltd was the last one standing. The focus changed from policyholders to shareholders, and the culture of greed, and rewards for executives dominated.
    The solution does not lie in the description ….
    on profit… but in the desire of Trustees to ensure that superannuation Funds always act in the interest of the members.

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