The money is yours to invest how you like until you reach retirement age. The govt doesn’t have anything to do with the investing. They do take 15% of everything you put in as a contributions tax, even though it is sold to the masses as your money for your retirement. So of the 12% the employer contributes on your behalf (you never see the money, it goes straight to your nominated super fund) only 10.2% gets there. Then your super fund takes a fee, and of course any realised profits it makes are taxed at 15% again. Or you can set up a self managed super fund (SMSF) if you think you are smarter than the funds, or want to avoid the fees. Which was OK to start with, but then they required a tax agent to file the returns. Later still, they required an independent audit of the SMSF before the tax agent got to work, so that’s two lots of expenses. Plus there is an annual registration fee for the tax office. So if you had a SMSF with precious just sitting there, year after year, no additions or sales, you still have three expenses, the ATO fee, the audit fee and the tax fee. They hate people managing their own stuff, and will do everything to drive you into a managed fund. The latest lunacy was taxing super 30% on unrealised gains above $3m which didn’t go ahead, this time; all the govt sees is a $3tn pot which can be tapped for revenue.
So the concept is good. The execution is typical. And despite 35 years of everybody contributing to compulsory super, at a cost to the employer, the overall tax take as a % of GDP has remained remarkably constant, even though the govt no longer has to fund nearly as much in the way of state pensions. 6% less, in fact.
There isn’t a solution which would be remotely politically acceptable. When it comes to finance, Trump is as bad as anyone. Probably worse than Biden, because at least Trump has functioning brain cells and should know better. But no, tariffs and DOGE will eliminate the deficit and pay down the debt, as well as $2,000 for everyone and subsidies for soy farmers. Reality says debt will continue to rise at an ever increasing rate (currently $3tn p.a.) until everything collapses. All we can do is prepare ourselves for that as we think best.
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