WSBA spoke exclusively to businessman and philanthropist, Bill Moss AM about the superannuation business. Bill is one of Australia’s most successful businessmen, having served as an executive for Macquarie Bank and steering the property finance and development divisions iof that firm nto a global force.
He grew up in Sydney’s west and to this credits his upbringing to much of his success.
WSBA: Bill, you have some views about our superannuation system. Can you share those with us?
Bill: There are many questions that affect businesses, employees and individuals who want to be a part of the workforce that have not been canvassed by the official media. There has been a lot written and said about superannuation over the last month. Unfortunately, the real debate on superannuation has not yet been had. Instead, we see a debate focussed on future levies and taxes targeting the superannuation of the supposedly wealthy. The real issue regarding superannuation revolves around a number of key factors. Firstly, is superannuation as critical for our future as the politicians and the superannuation industry would have us believe? Secondly, is the current format for superannuation the most likely way to ensure we make adequate provisions for our retirement? Finally, how do we remove the long term risks associated with superannuation should the government increases taxes on your super savings?
WSBA: How do you think that super contributions effect wages and savings?
Bill: Australians have one of the highest compulsory contributions to superannuation in the world. These contributions are primarily made by businesses that are forced to make these contributions by legislation. This means that businesses could pay their staff a higher wage if super contributions weren’t compulsory. From a simple business perspective, businesses can only afford to pay a certain amount of staff costs. When the government forced increase in the superannuation levy start to occur from the first of July this year, this will be invariably funded by companies at the expense of wage increases. In other words over the next few years we could see take home pay for employees not keeping pace with inflation, as companies are forced to pay more into employees superannuation.
WSBA: Is super as critical to a comfortable retirement as politicians and the superannuation industry would have us think?
Bill: It is worth noting that, historically, society has survived since its inception without compulsory superannuation; however, a lot of the rhetoric from politicians and the superannuation industry from recent months have led us to believe it will be impossible to survive retirement and old age without large amounts of funds locked away as superannuation. The real discussion which should be had is one about the merits of compulsory superannuation versus the merits of giving individuals the right to make their own provisions for their future by redirecting funds from superannuation to individual’s private account. We do not live in a world where companies have bottomless pits of money set aside in preparation for government whims that come in the form of subsidies and contributions. That being said, the debate that should be had is: is it better for the individual to save for their future with after tax dollars earned from employment, or is it better to take a lower salary with higher superannuation contributions which will ultimately be managed by the superannuation industry, subject to government regulations and inherent risks?
WSBA: What are the merits of the superannuation industry versus the individual investor?
Bill: It seems like the debate we have been having, appears to be occurring between the government, the opposition and the superannuation industry – these three entities being the major groups that are often quoted in the media. Unfortunately the fourth entity that should be involved is the actual stake holders, being us – after all, it is our money. However, I am somewhat intrigued by the fact the voice of the superannuation industry are themselves full of conflicts of interest. They include the established superannuation fund managers who have a vested interest in growing superannuation funds under management. Put simply, the superannuation industry is no different when it comes to conflicts as in the investment banking industry we saw grow over the last 20 years.
WSBA: How do we remove the long terms risks of superannuation, and prevent further government taxes on our savings?
Bill: We should not forget that superannuation is, in fact, savings. It is money deposited by us individually or by the companies we work for. It is money that is set aside for our retirement so that we can provide a suitable lifestyle for us, and our family. We should all be concerned about governments that wish to tax savings particularly during the deterioration of an economic cycle. We have seen this in Europe recently and it has been repeated throughout history, when economic times get tough. The shock and the horror of certain politicians when this matter was raised has been quite alarming. The reality is that governments have and, in future, will continue to tax savings as they struggle to meet budgets. The question for the politicians is: how can politicians enshrine in legislation that in the future your savings in the form of superannuation will not be subject to increased future taxation by governments?
WSBA: Do you think increasing the amount of compulsory superannuation is beneficial for our retirement?
Bill: We are continually told super is critical for providing a better lifestyle for us in retirement. If it is improved lifestyle we are after, why is it that a person cannot access their super in order to pay off a mortgage for the house they live in; pay schools fees for their children and grandchildren; and pay urgent medical costs? We should ask the politicians will they let us take money out of our superfund to pay off our mortgage so we have a place to live when we retire, pay our children’s school fees so they can have a better chance of succeeding in life, hence have a better chance of supporting us in retirement, and thirdly pay our medical costs which actually gives us a better chance of reaching the retirement age? All of these things are a significant part of us having a better life and a healthier retirement. We are happy to tick a box and let an ‘expert’ release our superannuation fund into the share market or invest our Australian savings internationally. I would rather be able to tick a box and use my money to reduce my mortgage or send my children to a better school. Why is it that when we die, any money in our superfund we leave to our children over the age of 18 is subject to death tax? If we had of held this own money in our own savings account, we would not be subject to this death tax. In fact why do we have death taxes at all within superannuation system? Question for the politician: will you remove all death taxes from our superannuation funds?
If you would like to meet with Bill Moss AM to talk with him about his views or any other philanthropic business matters, you can meet him at the FSHD Global Research Foundation’s renowned gala Chocolate Ball, where the entertainment, as well as a menu prepared by Luke Mangan, are all inspired by chocolate. WSBA is a sponsor of the Chocolate Ball. For more details on the Chocolate Ball call (02) 8007 7037 or visit www.fshdglobal.org
