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Australia's TRILLION dollar CPF Subscribe
From: Wee1001 21:22
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128095.1
Trillion-dollar baby promises a secure future for its retirees and old folks.
* Super is now the lifeblood of Australia's financial markets and just about everybody's retirement, write Anna Fenech and Glenda Korporaal
* December 30, 2006. The Australian
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FIFTEEN years after Paul Keating introduced the superannuation guarantee legislation, Australia's superannuation assets are set to smash through the $1 trillion level.
The magic number, which is set to be passed within the next two weeks, has dramatically changed Australian savings patterns, creating a funds management industry that is the fourth largest in the world and helping to fuel Australia's stock market boom.
It has also given a new generation of ordinary Australians with a significant level of savings outside their family home and boosted careers and salaries in financial planning, funds management and investment banks - which have designed new deals to take advantage of the huge amount of cash looking for a home.
More than $150 billion in new funds has flowed into superannuation in the last year alone, with investment managers looking at investments from shares to property, infrastructure to private equity - and an increasing volume of funds now looking for new assets offshore.
The high salaries and bonuses of those clipping the ticket of the $1 trillion super industry has seen financial services become one of the best-paid professions in Australia, reducing the attractions of other careers.
The empire includes a rapidly growing $155 billion low-cost industry superannuation sector, run jointly by unions and major employers, which is challenging traditional private superannuation suppliers for both funds and performance.
More recent changes under the Howard Government have also encouraged the development of self-managed superannuation funds, which now represent more than $210 billion of the industry.
"They were huge changes," says HSBC economist Dr John Edwards, who worked as a policy officer with Keating during his time as treasurer.
"Before Keating's changes, (superannuation) was a fantastic system for evading income tax," Edwards says.
"Keating did two major things. He encouraged the Arbitration Commission to require that a certain percentage of wages be paid as superannuation and he made sure it was preserved - that it could not be taken out and spent.
"Without these changes we would still have a system where most Australians had practically no financial assets other than money in bank accounts."
Started by the Hawke/Keating government and further encouraged by the changes of the Howard/Costello Government, Australia's massive superannuation wealth has created a unique situation which puts the country in a better position than other major Western nations to cope with the retirement of the baby boomers.
"At the point where the ageing population starts to hit - which is still about 20 years away - we would have a vastly better provision that most of Europe and the US are likely to have," Edwards says.
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From: Leongsam 21:28
To: Wee1001 unread 2 of 4
128095.2 in reply to 128095.1
Australia should hire Ho Ching to manage the funds. She'll do a great job.
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From: Dumbo98 21:50
To: Leongsam unread 3 of 4
128095.3 in reply to 128095.2
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1 Trillion should be able to last a longer period.
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From: makapa 21:53
To: Wee1001 unread 4 of 4
128095.4 in reply to 128095.1
Let's look at what lowly paid Oz ministers are capable of and the magic the best paid ministers in Peesai are capable of:
840% Increase over 2 decades!
vs
A Paltry 300% Increase in the same time frame!
