1 00:00:00,360 --> 00:00:04,440 Speaker 1: J J and Amanda gem Nation some big changes on 2 00:00:04,480 --> 00:00:07,360 Speaker 1: the financial front and increase in minimum wage for some 3 00:00:07,960 --> 00:00:10,360 Speaker 1: and a change in superannuation for others. 4 00:00:10,400 --> 00:00:13,000 Speaker 2: What does it mean and who's impacted? For more. We're 5 00:00:13,080 --> 00:00:16,200 Speaker 2: joined by founder and CEO of fort Lake Asset. 6 00:00:15,920 --> 00:00:19,119 Speaker 1: Management, one of austraight is leading economists to Christian Balist 7 00:00:19,200 --> 00:00:21,360 Speaker 1: Christian high. 8 00:00:21,440 --> 00:00:22,919 Speaker 3: Hey jamesy, Hey Amanda, how you are. 9 00:00:22,840 --> 00:00:26,400 Speaker 4: In Christian So who's paying for this extra two percent? 10 00:00:27,000 --> 00:00:29,000 Speaker 2: Are we paying for that superannuation? 11 00:00:29,120 --> 00:00:29,280 Speaker 4: Yeah? 12 00:00:29,320 --> 00:00:30,080 Speaker 2: The superannuation? 13 00:00:30,200 --> 00:00:31,160 Speaker 4: Or does your boss. 14 00:00:30,920 --> 00:00:34,839 Speaker 3: Pay for it? Well, I guess it ultimately depends who 15 00:00:34,880 --> 00:00:37,920 Speaker 3: you work for. Obviously, through in the private sector, your 16 00:00:37,960 --> 00:00:41,120 Speaker 3: boss is paying for it, and assuming that they're not 17 00:00:41,240 --> 00:00:43,760 Speaker 3: part of the government, that obviously means that there'll be 18 00:00:43,920 --> 00:00:46,199 Speaker 3: probably a few unhappy bosses out there. And then obviously 19 00:00:46,280 --> 00:00:50,479 Speaker 3: the government will also if you're in a government employee, 20 00:00:50,479 --> 00:00:53,920 Speaker 3: I should say, they'll obviously be paying in higher amounts 21 00:00:53,920 --> 00:00:56,360 Speaker 3: on super as well. So basically it goes all the 22 00:00:56,400 --> 00:00:59,120 Speaker 3: way across the economy, and obviously it's a good thing 23 00:00:59,200 --> 00:01:04,280 Speaker 3: for for working families and working people, but ultimately it's 24 00:01:04,319 --> 00:01:06,880 Speaker 3: also a good thing for the surety of the financial 25 00:01:06,920 --> 00:01:09,839 Speaker 3: system because I think when we talk about these increases, 26 00:01:09,880 --> 00:01:12,600 Speaker 3: people often forget that one of the big silver linings 27 00:01:12,680 --> 00:01:15,160 Speaker 3: was when we went through the financial crisis in two 28 00:01:15,200 --> 00:01:18,080 Speaker 3: thousand and eight, one of the things that saved us 29 00:01:18,120 --> 00:01:20,600 Speaker 3: was our superannuation system. It was the gold standard and 30 00:01:20,640 --> 00:01:22,440 Speaker 3: everyone looked to Australia and said, wouldn't have it been 31 00:01:22,480 --> 00:01:25,280 Speaker 3: fantastic if if we had something like that. So there's 32 00:01:25,280 --> 00:01:28,480 Speaker 3: a lot of positives about the superannuation system and now 33 00:01:28,840 --> 00:01:30,480 Speaker 3: we're sort of obviously pushed it all the way up 34 00:01:30,520 --> 00:01:33,600 Speaker 3: to twelve percent, which is obviously getting a lot higher 35 00:01:33,600 --> 00:01:35,160 Speaker 3: than what it was back I think it was around 36 00:01:35,160 --> 00:01:37,520 Speaker 3: about nine and a half back then in two thousand 37 00:01:37,560 --> 00:01:39,440 Speaker 3: and eight. So it's come a long way and we're 38 00:01:39,640 --> 00:01:40,600 Speaker 3: in good shape. 39 00:01:40,640 --> 00:01:42,600 Speaker 1: Can you explain to me how it saved us during 40 00:01:42,600 --> 00:01:45,600 Speaker 1: the financial crisis, meaning that people could rely could draw 41 00:01:45,680 --> 00:01:47,240 Speaker 1: down on this super What do you mean by that? 42 00:01:48,480 --> 00:01:50,520 Speaker 3: Well, what it meant was when the banks got into 43 00:01:50,560 --> 00:01:54,880 Speaker 3: trouble and there wasn't a lot of funding around, we 44 00:01:54,920 --> 00:01:57,880 Speaker 3: had this big pool of money sitting there in our 45 00:01:57,920 --> 00:02:01,880 Speaker 3: superannuation system and basically the banks could go to the 46 00:02:01,920 --> 00:02:05,560 Speaker 3: superannuation funds and say, hey, we need a little bit 47 00:02:05,560 --> 00:02:07,840 Speaker 3: of help. We need funding, and we did. We had 48 00:02:07,880 --> 00:02:12,000 Speaker 3: all that money sitting there. It was easily accessible. At 49 00:02:12,000 --> 00:02:15,919 Speaker 3: that point in time, our superif our superannuation funds weren't 50 00:02:16,400 --> 00:02:19,240 Speaker 3: so heavily invested offshore. They tended to be a bit 51 00:02:19,240 --> 00:02:22,840 Speaker 3: more domestically focused, and we did. We really draw upon 52 00:02:22,880 --> 00:02:25,520 Speaker 3: that money and it became, I guess, a thing that 53 00:02:25,600 --> 00:02:28,080 Speaker 3: really helped the domestic banks and helped a lot of 54 00:02:28,080 --> 00:02:31,280 Speaker 3: financial institutions here domestically to help get them through a 55 00:02:31,320 --> 00:02:31,799 Speaker 3: rainy day. 56 00:02:31,880 --> 00:02:34,080 Speaker 2: But as you say, it is reliant on investment, so 57 00:02:34,120 --> 00:02:35,480 Speaker 2: you just hope the investments are good. 58 00:02:35,520 --> 00:02:35,800 Speaker 1: It is. 59 00:02:36,000 --> 00:02:39,080 Speaker 2: It is a whim, isn't it for investors? 60 00:02:40,320 --> 00:02:44,440 Speaker 3: That's right, it's a it's a double edged sword. But thankfully, 61 00:02:44,480 --> 00:02:47,760 Speaker 3: I think you know, as you know, as as we've 62 00:02:47,800 --> 00:02:51,840 Speaker 3: heard and as we've seen, you know, during the financial crisis, 63 00:02:51,840 --> 00:02:54,240 Speaker 3: what might have seen like a risky investment for the 64 00:02:54,240 --> 00:02:56,760 Speaker 3: superannuation funds to give the banks that money during that 65 00:02:56,880 --> 00:03:01,600 Speaker 3: risky period, they were obviously very or compensated. And even 66 00:03:02,000 --> 00:03:05,600 Speaker 3: the banks that brought shares, sorry the superannuation funds that 67 00:03:05,680 --> 00:03:07,760 Speaker 3: brought shares and did those sorts of things during that 68 00:03:07,800 --> 00:03:11,720 Speaker 3: period obviously did very well. So you know, everyone came 69 00:03:11,760 --> 00:03:14,519 Speaker 3: out pretty well off the back of that. But it 70 00:03:14,639 --> 00:03:16,720 Speaker 3: just goes to show if you've got the system there 71 00:03:16,720 --> 00:03:19,880 Speaker 3: and you've got it in place, if we do fall 72 00:03:19,960 --> 00:03:23,720 Speaker 3: upon hard times, we can to some extent rely on 73 00:03:24,480 --> 00:03:27,040 Speaker 3: you know, our big superannuation balances and those sorts of 74 00:03:27,040 --> 00:03:31,360 Speaker 3: things to you know, as a place for that funding. 75 00:03:31,480 --> 00:03:33,959 Speaker 3: We don't have to always look offshore or look somewhere else, 76 00:03:34,000 --> 00:03:36,640 Speaker 3: look to the government. We can always sort of look 77 00:03:36,720 --> 00:03:39,520 Speaker 3: to this, to this superannuation nestick to help us. 78 00:03:39,600 --> 00:03:41,240 Speaker 4: And what about people that say we should get rid 79 00:03:41,240 --> 00:03:43,360 Speaker 4: of superannuation it seems a little bit crazy. 80 00:03:44,920 --> 00:03:47,880 Speaker 3: Well yeah, yeah, Look, I mean I think the evidence 81 00:03:47,960 --> 00:03:49,720 Speaker 3: is pretty clear that it's been a great thing for 82 00:03:49,760 --> 00:03:53,520 Speaker 3: the nation. The people that have been invested or had 83 00:03:53,600 --> 00:03:58,240 Speaker 3: superannuation balances now since since it was conceived, you know, 84 00:03:58,280 --> 00:04:01,440 Speaker 3: they've done very well. Equity markets and share markets have 85 00:04:01,520 --> 00:04:05,120 Speaker 3: gone up a long way. And probably the biggest criticism 86 00:04:05,200 --> 00:04:07,160 Speaker 3: is we should have got to the twelve percent earlier, 87 00:04:07,560 --> 00:04:10,560 Speaker 3: because you know, we've foregone some of those great earnings 88 00:04:10,560 --> 00:04:13,200 Speaker 3: by not bumping it up quick enough. So look that 89 00:04:13,440 --> 00:04:18,280 Speaker 3: undoubtedly the compounding benefits, meaning you know, the month on month, 90 00:04:18,720 --> 00:04:21,679 Speaker 3: year on year growth of these superannuation balances that people 91 00:04:21,680 --> 00:04:24,880 Speaker 3: have had or have been forced to have. You know, 92 00:04:25,240 --> 00:04:26,960 Speaker 3: it's been a great thing for the nation, a great 93 00:04:26,960 --> 00:04:30,400 Speaker 3: thing for individuals and a lot of people, you know, 94 00:04:30,560 --> 00:04:33,640 Speaker 3: can thank government policy ultimately for being able to retire 95 00:04:33,640 --> 00:04:35,440 Speaker 3: with a pretty healthy nestic But also. 96 00:04:35,240 --> 00:04:37,360 Speaker 4: That tax that they talk about. They talk about three 97 00:04:37,360 --> 00:04:39,960 Speaker 4: million dollars at the moment, and there's two percent of 98 00:04:39,960 --> 00:04:42,720 Speaker 4: the country that has that. But down the track, Yeah, 99 00:04:43,200 --> 00:04:45,960 Speaker 4: governments aren't likely to take back tax, are they, So 100 00:04:46,120 --> 00:04:47,960 Speaker 4: this could be a bad thing for the future. 101 00:04:49,480 --> 00:04:52,160 Speaker 3: Yeah, Look, it's one of those things. Look at it 102 00:04:52,200 --> 00:04:56,080 Speaker 3: has been definitely a victim of constant tampering because it 103 00:04:56,160 --> 00:04:58,360 Speaker 3: has been so successful. It's almost been a victim of 104 00:04:58,400 --> 00:05:02,280 Speaker 3: its own success. That probably the first place that politicians 105 00:05:02,480 --> 00:05:06,080 Speaker 3: look to to raise money whenever their budgets, you know, 106 00:05:06,160 --> 00:05:10,839 Speaker 3: aren't in line or we need help to balance the books. So, 107 00:05:11,560 --> 00:05:15,159 Speaker 3: you know, you do run the risk that superannuation doesn't 108 00:05:15,160 --> 00:05:17,839 Speaker 3: become this place that people want to. I guess ad 109 00:05:17,839 --> 00:05:21,320 Speaker 3: additional money too, because it's always getting tampered with. And 110 00:05:21,360 --> 00:05:25,600 Speaker 3: obviously we've got the three million dollar threshold that's there, 111 00:05:25,720 --> 00:05:29,880 Speaker 3: You've got the increase in taxation some You know, some 112 00:05:29,880 --> 00:05:33,960 Speaker 3: people pay thirty percent on their on their earnings in 113 00:05:34,040 --> 00:05:37,800 Speaker 3: SUPER and if you're locked up for what feels like 114 00:05:37,800 --> 00:05:41,640 Speaker 3: a lifetime for those people on the higher income tax threshold, 115 00:05:41,680 --> 00:05:44,160 Speaker 3: So if you're on forty eight percent, that people might say, well, 116 00:05:44,400 --> 00:05:46,200 Speaker 3: you know what, I'd prefer not to have SUPER. I 117 00:05:46,279 --> 00:05:48,560 Speaker 3: prefer not to put my money in SUPER because there's 118 00:05:48,560 --> 00:05:53,120 Speaker 3: only a marginal benefit from a taxation perspective. But I'm 119 00:05:53,160 --> 00:05:55,120 Speaker 3: also locking up my money for quite a long period 120 00:05:55,160 --> 00:05:57,360 Speaker 3: of time. So a lot of people would argue that 121 00:05:57,400 --> 00:05:58,960 Speaker 3: SUPER is not the best thing for them because they 122 00:05:59,120 --> 00:06:00,920 Speaker 3: would like to have their money here and now. A 123 00:06:00,960 --> 00:06:02,760 Speaker 3: good example of that is people would like to go 124 00:06:02,800 --> 00:06:05,000 Speaker 3: and buy houses with their with their SUPER instead of 125 00:06:05,000 --> 00:06:08,000 Speaker 3: having it locked up. So, you know, there's there's pros 126 00:06:08,000 --> 00:06:09,640 Speaker 3: and cons to it, but I think, you know, we've 127 00:06:09,640 --> 00:06:11,360 Speaker 3: got to look at it, look at it on the 128 00:06:11,400 --> 00:06:13,880 Speaker 3: whole and on the whole, for the for the nation. 129 00:06:14,720 --> 00:06:15,560 Speaker 3: It's been a great thing. 130 00:06:15,760 --> 00:06:18,000 Speaker 2: Well good on you, Christian, thank you for joining us. 131 00:06:19,120 --> 00:06:21,200 Speaker 3: No thanks, guys, thanks having failure. 132 00:06:21,240 --> 00:06:25,640 Speaker 1: Actually it was the Superannuation Guarantee Act came into force 133 00:06:25,880 --> 00:06:27,240 Speaker 1: thirty three years ago yesterday. 134 00:06:27,400 --> 00:06:28,640 Speaker 4: I was one of the first people that got a 135 00:06:28,640 --> 00:06:33,000 Speaker 4: part of it about it, Yeah, your own super My 136 00:06:33,080 --> 00:06:34,960 Speaker 4: dad said, get your own super because you can't rely 137 00:06:35,000 --> 00:06:37,280 Speaker 4: on the government. So I got that, and then they 138 00:06:37,360 --> 00:06:40,080 Speaker 4: did the compulsory working super work. 139 00:06:41,240 --> 00:06:44,000 Speaker 2: This is why you're not the economy. We true about 140 00:06:44,000 --> 00:06:44,560 Speaker 2: these things.