A wee bit on the history of Super in Oz
Introduction
Prior to the introduction of the "Superannuation Guarantee" in 1992 by the Keating Labor
government, reasonably widespread superannuation arrangements had been
in place for many years under industrial awards negotiated by the union movement
between 1986 and 1988 with support from the federal government as part
of a "wage-tax trade off", allowing a non-inflationary means of wage
increases.
The compulsory "Superannuation Guarantee" system was introduced as
part of a major reform package addressing Australia's retirement income
policies. It was anticipated that Australia, along with many other
Western nations, would experience a major demographic shift in the coming decades, resulting in the anticipated increase in age pension payments placing an unaffordable strain on the Australian economy. The proposed solution was a "three pillars" approach to retirement income:
- A safety net consisting of a means-tested Government age pension system
- Private savings generated through compulsory contributions to superannuation
- Voluntary savings through superannuation and other investments
Since its introduction, employers have been required to make
compulsory contributions to superannuation on behalf of most of their
employees. This contribution was originally set at 3% of the employees'
income, and has been incrementally increased by the Australian government. Since 1 July 2002, the minimum contribution has been set at 9% of an employee's ordinary time earnings. The 9% is thus not payable on overtime rates but is payable on remuneration items such as bonuses, commissions, shift loading and casual loadings.
Though there is general widespread support for compulsory
superannuation today, it was met with strong resistance by small
business groups at the time of its introduction who were fearful of the
burden associated with its implementation and its ongoing costs. [1]
The Howard government
has been criticised for its reluctance to increase the compulsory rate
of superannuation. Had the compulsory rate been 15% since 1996, rather
than the current 9%, total superannuation assets in Australia would be
approaching $2 trillion - almost double the current level. [2]
After over a decade of compulsory contributions, Australian workers have over $1.177 trillion[3] in superannuation assets. Australians now have more money invested in managed funds per capita than any other economy[4].
Compulsory superannuation in combination with buoyant economic growth has turned Australia into a 'shareholder society', where most workers are now indirect investors in the stock market.
Consequently, a lively personal investment marketplace has developed,
and many Australians take an interest in investment topics.
I think that it's a great idea, given the shift in demographic - plus the historical trend of kiwi's not being great savers in the long term.
I think that if a Howard Liberal government didn't roll it back - then even conservatives think it's a good idea. In reality it's up to the employee and employer to ensure the retirement security of the individual, and not the state, with people dependent on pensions.
I've been employed in Oz for 8 years, and now have an reasonable amount of money sitting in a super account, which realistically I wouldn't have saved off my own bat - and because it's over and above your base salary, you don't miss it!
When Hibs, went up, to win the Scottish Cup - I wisnae there - furfuxake!
