The Australian federal government has really buggered up the retirement benefits of Australians who could actually afford to fund their own retirements. In Australia we have a budget deficit that needs repairing; instead of tackling rampant government spending they chose the easy option. The federal government has sought to plug the budget deficit by increasing taxes starting with our retirement accounts.

The latest target group facing tax increases is superannuation; that affects pretty much all of us who are employed seeking to reduce the burden on the taxpayer by funding our retirements. In Australia there are pretty much two superannuation types; that is accumulation funds and defined benefits funds. Naturally, breauocrats who are in members of defined benefits funds do not target these funds, they make excuses that it is too difficult to design, we all know they will not raid their own government funds.

The majority of Australians are covered under accumulation type funds and politicians and senior bureaucrats receive their pensions from defined benefits type funds – you don’t need to be an academic to work out what the more generous system is. For accumulation style funds, your employer now contributes 12% up from 9.5% of your salary. These funds are set aside by your employer, you can’t access until you turn 60 if you are born after 1963. This isn’t free money, this funding of our retirement was funded by actual pay rises that were set aside for retirement saving.

During the Howard government, the Future Fund was set up to finance bureaucrat’s retirements to reduce the reliance on consolidated revenue that would fund. This was a necessity, the government had a future unfunded liability that needed to be addressed whilst the economy was in good shape. Instead of targeting accumulation funds, the real cost is in defined benefits but why would any politician target their own retirement funds for cost savings when a much easier option exists? Raid the accumulation funds of average Australians who really are unable to prevent these honey pot raids.