Australia’s superannuation system is costing too much,
and offering too little.
The superannuation sector will be worth $34 trillion by 2061. Over $100 billion flows from workers into compulsory superannuation each year. $30 billion comes out in fees.The funds do not compete for members
- instead, they are a closed cartel which can rely on state-enforced inflows for workers’ savings.
As with health, infrastructure, and education, superannuation needs a public option. I have proposed a model for this: Super Guarantee Australia. The model has four key objectives: increase competition by driving lower fees, increasing returns, reducing pension reliance, and improving accessibility.
The standard default superannuation account would be entrusted to independent trustees, who would pool assets with the Future Fund Management Agency. This model draws on the systems in Sweden, New Zealand, Canada, and the United Kingdom.
A consultation paper can be found below.
Submissions on this topic should be sent to Senator.Bragg@aph.gov.au