Mainstream Australians are being failed by the political class as the gap between two Australias continues to widen. This failure is exemplified by a superannuation system that siphons money to the financial sector and political class and actively prevents mainstream Australians from achieving the Australian way of life.
The legislated increase of forced super contributions from the current rate of 9.5% to 12% of wages will in many cases work against the financial interests of Australians, both now and in retirement. Forced super contributions come directly at the expense of savings outside of super that can be put towards a house deposit or used to reduce debt. Increasing the compulsory rate will only put the aspiration of homeownership and financial security further out of reach of an increasing proportion of the population.
Homeownership fell from 71% to 66% of households between 1995 and 2018, and is set to get worse if trends among younger generations continue. In the 1980s, 68% of Australians owned their own home in their early 30s. Of those currently in their early 30s, the rate is just 50%.
A 2019 survey by Core Data found that nearly 70% of first home buyers did not fund 100% of their deposit from their personal savings, with a majority relying on family assistance in the form of gifts, guarantees, and loans. Further diminishing the ability to save outside of super will remove the aspiration of homeownership from those unable to rely on family wealth.
As made clear by the recently released Retirement Income Review, those retiring without owning their own home are significantly disadvantaged with retirement income having to cover rental housing and without the option of drawing additional income from their home asset.
Not only is the current system damaging mainstream Australians, but it also fails to make sense from a public finance perspective. According to the review, by 2047 the revenue forgone through superannuation tax concessions will exceed the total cost of the age pension.
Despite the significant failures of superannuation, the current system along with the legislated increase of compulsory contributions to 12% of workers' wages continues to be pushed by special interests. An artificially inflated financial sector and the political class benefit from the gravy train created by $30 billion of annual superannuation fees. As my research released last week shows, the financial sector's share of national income has continued to grow following a rapid expansion that coincided with the introduction of superannuation in 1992. Before superannuation the financial sector was 2.4% of national income and has since increased to 6.5%.
The wealth transfer from hard-working Australians to the financial sector and political class generated by the superannuation system is part of a broader divide across Australian society. Australia is increasingly being divided into two Australias.
One Australia tends to be employed in the public sector or in white-collar jobs offered by big corporations that find fertile soil in a bloated financial sector. The other Australia is made up of mainstream Australians who own their own businesses or are employed in the private productive economy by small and medium-sized businesses.
It is mainstream Australians that are under stress due to a plethora of failed public policy that undermines the businesses they own and work in and creates barriers to obtaining key parts of the Australian way of life such as homeownership.
Public sector wages continue to rise, funded by taxes from workers with stagnating real wages. Big business continues its takeover of the Australian economy, while small businesses are strangled by red tape, onerous labour laws, and now lockdown and social distancing restrictions that disproportionately harm small business. And those who own their home enjoy increased equity with rising house prices, while an increasing proportion of Australians are priced out of the market due to a failure of public policy on development, taxation, superannuation, and immigration.
If trends continue, the gap between the two Australias will only widened. Public policy must be made to benefit the broader country and not become a tool of the political class that is tightly organised to promote their special interests at the expense of mainstream Australia.
Reforming superannuation towards a system of voluntary contributions would return control to Australians to make financial decisions in their own best interest given their individual circumstances and block off the siphoning that is enriching the political class at the expense of mainstream Australia.
In the wake of the Brereton report on alleged war crimes committed by Australian SAS troops in Afghanistan, there have been calls for the War Memorial to immediately reflect the allegations in its exhibitions. Memorial director Matt Anderson has suggested that curators will indeed do just that. Similarly, former Chief of the Defence Force, Admiral Chris Barrie has suggested that the SAS exhibit be removed altogether. The prime minister has responded meekly, saying only that all such changes will need to be approved by the War Memorial's board.
But this is exactly what they've done. Last week
It was the Andrews' government's incompetence in managing hotel quarantine, along with an inadequate contact tracing system, which kept Victorians under lockdown longer than almost any other place in the world. The utopian elimination strategy, which has been pursued across Australia, has forced hundreds of thousands of employees out of work, with these job losses being concentrated in small businesses in the private sector.
Time "inside" is turning out to be considerably easier than expected. Having spent the last nine months in Melbourne, I am used to a complete loss of freedom, mandatory mask wearing and oppressive police enforcement, neatly topped off with disproportionate fines. I suppose that this conditioning is one thing I can thank Dan Andrews for. Mealtimes are sometimes a highlight, but most often a lowlight. A furtive knock on the door, or sound of a large trolley rumbling by, indicates that our food has arrived, and we emerge from our rooms to snatch up the morning's offerings. The same routine for lunch, which usually arrives while we are still recovering from the assaults of the breakfast baked beans, omelette, and sausage. Dinner is anybody's guess, and we are becoming very adept at keeping edible lunch salads for when the kitchen staff have decided to resort to inedible meat loaf or grey slices of lamb for the evening meal. We have been so very fortunate with our neighbours. On Day Two, we discovered that the cabins next to ours are inhabited by musicians Joe Camilleri and Claude Carranza. They are members of the Australian band The Black Sorrows and are on their way to tour New South Wales and South Australiaa. It took a while to coax them out of their rooms to practise on their veranda within earshot of others, but after a few nights, they came alive again after months of being isolated from each other. Soon, practice turned into a full show complete with banter for a highly appreciative, and in the truest sense of the word, captive audience. Their music filled the camp with joy. Gradually, the nightly concerts began to attract more and more residents of the Orange Zone, until one night, the set went on just a little bit too long and the crowd became just a little bit too big. The police shut the whole thing down. Joe told us afterwards that they had not really wanted to, but that they had a job to do. Such is life.
Across a number of measures, from home ownership to employment, young Australians have seen a decline to their economic and social wellbeing in recent decades. These declines have been compounded by the government-imposed lockdowns introduced in response to the coronavirus, which have disproportionately impacted young Australians.
Last week a Rudd-initiated petition was submitted to the House of Representatives calling for a Royal Commission into "the strength and diversity of Australian news media". In case anyone was in any doubt over what that meant, Rudd called the Murdoch media a "cancer on democracy" when announcing the petition on Twitter last month. The petition had over 500,000 signatures including Malcolm Turnbull's.
ACT Labor will continue to govern, as it has done since 2001, but the big winners were the Greens, who have more than doubled there representation. The 25 seat ACT Assembly will have ten Labor members (down from 12), nine Liberals (down from 11), and six Greens (up from two). The Greens already have a seat in cabinet, in exchange for propping up the minority Labor government, and will now be even more influential. The radical Greens are a party of government in the ACT.
The RBA's decade-long experiment with record low interest rates has created an economy that is dependent on low borrowing costs and has emboldened the Federal government to dramatically blow the government debt out to $1.7 trillion over the next decade.
We knew this already. That's why Victoria has been subject to the cruel and indefinite lockdown measures that have crippled the economy, caused countless businesses to close for good, and kept school children from seeing their friends for months on end.
Congratulations! You have just started an internship at Australia's public broadcaster, the ABC.
My modelling has estimated that it could take until 2045-46 for the Commonwealth government to deliver a budget surplus, with total debt expected to peak at $2.05 trillion and not be paid off until 2079-80.
Instead of sticking to its guns, the Rob Guest Endowment swiftly capitulated, issued a grovelling apology, vowed to do better and cancelled the scholarship for 2020. So much for supporting the younger generation and "helping them achieve their dreams" as the endowment proudly purports to do.
In the article, Senator Chandler bemoaned the rise of cancel culture and the way it silences people for their views about sensitive topics like sex and gender identification and commented that "you don't have to be a bigot to recognise the differences between the male and female sexes and understand why women's sports, single-sex change rooms and toilets are important".