Facts speak louder than statistics

Wednesday, 30 September 2009

Super Idea?


There are still calls out there for Superannuation (Super) funds to be forced to invest in infrastructure projects despite the fact that Super funds are in reality accounts held in trust and therefore private money.

To force that money to be invested in specific areas is something for a planned economy which is something Australia doesn’t have.

Unlike other financial accounts that are available such as term deposits Super does not come with a fixed interest rate. That being the case Super needs to be free to be invested where the highest return can be gained.

In any case I’m not sure how there can be a return for money that is ‘invested’ in infrastructure projects, especially ones that lose money. (Lane Cove Tunnel faces sale as losses spiral)

What would they say to people whose money was forced to invest in a failed project? How would they tell someone their retirement money is a much lower amount than what it should have been? Would it be “Whoopsie, my bad!”?

Whatever was said it wouldn’t help the people who would lose out on such a deal.

Super isn’t just sitting there doing nothing, Super is doing something, it is doing exactly what invested money is supposed to be doing and that is growing wealth for the holders of the accounts so their retirements can be better funded.

Super has no other function outside of this.

You can’t offer an IOU to people either, the money has to be invested to get a return. Uninvested money does not make money and if you’re paying outgoing fund members using money from incoming members then it would appear you are operating a ponzi scheme.

I for one don’t want any less of a return on my Super to pay for the wish lists of others.


Friday, 24 April 2009

The Enterprise Part 2

Following on from ‘The Enterprise Of The World’ article regarding Collective Employee/Enterprise Agreements and the sleight of hand that appears to be used in those agreements where the claim is made by employers that if they are supposedly paying more money then the employer should gain something from that like increased productivity and/or have working conditions or employee rights altered in the employers favour.

In trading off conditions for a pay rise it may help to think of the conditions in question as having a monetary value as well.

Just say each condition is worth $20,000. You are then asked to give up some of these conditions to pay for a pay rise that’s worth maybe $500 a year.

In other words you are giving your employer something of yours, and well below its true value, to pay for a pay rise that won’t keep up with inflation.

Basically you pay for your own pay rise, sort of like if you have to buy your own birthday presents.

And when there are no more conditions to trade off what will you do then?

Remember the true value of money is in the purchasing power it has. If you can’t buy as much with your wage as you could the year before you are being paid less in real terms.

Businesses don’t give more of the product or the service they offer when they raise their prices, nor do they trade anything off for that extra money so why should anyone else?