Debt and Deficit - Coalition Budget Emergency

[Power Raid]

It's increasingly difficult to name any decent legacy of the Howard government which are positive. The road was paved with gold, and they sat on their arses handing it out, without so much as a thought for the future. It's a credit to Howard as a politician that he's remembered so fondly.

yes, the negative was the middle class welfare. he should have handed the funds back to the states instead as per our federation.

the positive was after years and years of reform by Keating, we needed a period of consolidation to end the necessary pain of transformation. His major achievement was getting Australia to accept change and introduce a GST to broaden the tax base. His major failing was not tackling the corrupt unions and the failed patricks saga.

 

[Rob]

It's increasingly difficult to name any decent legacy of the Howard government which are positive. The road was paved with gold, and they sat on their arses handing it out, without so much as a thought for the future.

http://www.futurefund.gov.au/

 

[Peka7777]

L

 

[PetrikDngerfild]

Bern bujet bern

 

[Elroo]

http://www.futurefund.gov.au/

One of the Howard governments worse decisions they made.

They should have directly funded the superannuation accounts of their (ex) employees directly rather than setting up a seperate fund.

 

[Rob]

One of the Howard governments worse decisions they made.

They should have directly funded the superannuation accounts of their (ex) employees directly rather than setting up a seperate fund.

It's not that simple because most of them are defined benefit, so they don't know how much they'll actually cost. Someone that takes a pension and dies straight away is going to cost a lot less than someone who takes a lump sum and dies, or takes a pension and lives until 110. Nowadays I think all new public servants get put on an accumulation plan which is fully funded anyway.

 

[Slax]

I would have thought the Keating Hawke and Howard governments were the best in the last 50 years

No way known was Howard in that group. Hawke took over an economy collapsing, Keating totally reformed the economy, giving Howard the benefits of it. I'd rate the second half of Menzies reign as much better. Even Fraser's first term was better than anything Howard did.

 

[geelong_boy]

It's increasingly difficult to name any decent legacy of the Howard government which are positive. The road was paved with gold, and they sat on their arses handing it out, without so much as a thought for the future. It's a credit to Howard as a politician that he's remembered so fondly.

The guns buyback was a good policy. And at the time I thought sending troops to East Timor in 1999 was a good thing to do. However, in light of the Timor shelf gas revelations you have to wonder how much of was self-interested as opposed to altruistic foreign policy.

 

[Elroo]

It's not that simple because most of them are defined benefit, so they don't know how much they'll actually cost. Someone that takes a pension and dies straight away is going to cost a lot less than someone who takes a lump sum and dies, or takes a pension and lives until 110. Nowadays I think all new public servants get put on an accumulation plan which is fully funded anyway.

Actually it was/is fairly easy to calculate the required government contributions required to fully fund the unfunded government defined benefits superannuation schemes such as in the MSBS. Many members of the MSBS are ex-service members who have a benefit that is based upon an employer contribution based upon their years of service. When they leave these personnel are advised of their final employer defined benefit and informed that as the employer contribution is unfunded the money cannot be rolled over to another fund of their choice. It would have been fairly simply for the government to fully fund the ex-members accounts with the unfunded employer, resulting in members earning market rates of returns rather than CPI increases for 30+ years.

In 2008 the unfunded employer contributions to ex-service personnel was $3.7 billion, by 2011 it was $5.2 billion.

http://www.aga.gov.au/publications/mil_super_2008/Chapter_7.asp

http://www.aga.gov.au/publications/mil_super_2011/Chapter_7.asp

 

[Rob]

Actually it was/is fairly easy to calculate the required government contributions required to fully fund the unfunded government defined benefits superannuation schemes such as in the MSBS. Many members of the MSBS are ex-service members who have a benefit that is based upon an employer contribution based upon their years of service. When they leave these personnel are advised of their final employer defined benefit and informed that as the employer contribution is unfunded the money cannot be rolled over to another fund of their choice. It would have been fairly simply for the government to fully fund the ex-members accounts with the unfunded employer, resulting in members earning market rates of returns rather than CPI increases for 30+ years.

In 2008 the unfunded employer contributions to ex-service personnel was $3.7 billion, by 2011 it was $5.2 billion.

http://www.aga.gov.au/publications/mil_super_2008/Chapter_7.asp

http://www.aga.gov.au/publications/mil_super_2011/Chapter_7.asp

Interesting, but you're talking about a pretty small group of people in comparison to the much larger CSS and PSS, where benefits are calculated not by years of service (directly anyway - obviously the more years in the public service the more likely to have a higher benefit) but by levels of contributions combined with the final average salary of the employee. Someone that gets a promotion late in their career can have their super 'balance' pumped up by hundreds of thousands of dollars.

But in any case, what difference does it make if the money is stored in the future fund or another super fund?

 

[Elroo]

Interesting, but you're talking about a pretty small group of people in comparison to the much larger CSS and PSS, where benefits are calculated not by years of service (directly anyway - obviously the more years in the public service the more likely to have a higher benefit) but by levels of contributions combined with the final average salary of the employee. Someone that gets a promotion late in their career can have their super 'balance' pumped up by hundreds of thousands of dollars.

But in any case, what difference does it make if the money is stored in the future fund or another super fund?

The total number of ex-service personnel affected is in the order of almost 100,000. The total amount unfunded as of 2011 for MSBS personnel was almost $30 billion. Personnel who in many cases joined in their late teens and have a super fund frozen for 30+ years earning only CPI increases.

The issue with funds like the MSBS being unfunded are actually significant as highlighted by the Poldger review in 2007 which suggested the government close the MSBS to new personnel and open a new fully funded and fully transferable super fund. This has resulted in the establishment from the 30th of June 2016 of the new ADF super which will see fully funded employer contributions of 16.4%.

The reason why the money would have better deposited directly into (ex) employees accounts rather than a separate Future Fund is the fact that upon resignation from the ADF members accounts are frozen at the defined benefit amount calculated at the time of their resignation, and increased inline with the CPI.

Under the current unfunded MSBS scheme a final pension is based upon the employer benefit calculated at their resignation from the ADF plus CPI increases over the years since they left divided by their pension factor upon drawing down their pension.

If the money had been deposited into their accounts upon resignation from the ADF it would have been; calculated employer benefit at resignation less 15% contribution tax, plus market rates of return they have achieved on their superannuation over the years since they left divided by their pension factor upon drawing down their pension. They could also at resignation from the ADF roll their MSBS over to a scheme of their choice, something the Poldger review recognised an built into the new ADF super scheme.

 

[Rob]

The total number of ex-service personnel affected is in the order of almost 100,000. The total amount unfunded as of 2011 for MSBS personnel was almost $30 billion. Personnel who in many cases joined in their late teens and have a super fund frozen for 30+ years earning only CPI increases.

The issue with funds like the MSBS being unfunded are actually significant as highlighted by the Poldger review in 2007 which suggested the government close the MSBS to new personnel and open a new fully funded and fully transferable super fund. This has resulted in the establishment from the 30th of June 2016 of the new ADF super which will see fully funded employer contributions of 16.4%.

The reason why the money would have better deposited directly into (ex) employees accounts rather than a separate Future Fund is the fact that upon resignation from the ADF members accounts are frozen at the defined benefit amount calculated at the time of their resignation, and increased inline with the CPI.

Under the current unfunded MSBS scheme a final pension is based upon the employer benefit calculated at their resignation from the ADF plus CPI increases over the years since they left divided by their pension factor upon drawing down their pension.

If the money had been deposited into their accounts upon resignation from the ADF it would have been; calculated employer benefit at resignation less 15% contribution tax, plus market rates of return they have achieved on their superannuation over the years since they left divided by their pension factor upon drawing down their pension. They could also at resignation from the ADF roll their MSBS over to a scheme of their choice, something the Poldger review recognised an built into the new ADF super scheme.

So you're talking about a change in the conditions of the fund?

 

[Elroo]

So you're talking about a change in the conditions of the fund?

No. The government could have fully funded their employer benefits since 1991 when the scheme was established but choose not too.

I'm talking about the employer; re government funding their employer defined amount calculated upon resignation to allow resigned members to roll over their money to the fund of choice, and to earn market rates of return on their benefits.

 

[Rob]

No. The government could have fully funded their employer benefits since 1991 when the scheme was established but choose not too.

I'm talking about the employer; re government funding their employer defined amount calculated upon resignation to allow resigned members to roll over their money to the fund of choice, and to earn market rates of return on their benefits.

But that would require a change in the rules of the fund wouldn't it?

As I understand it, members of the PSS and CSS (other government DB funds are probably similar) are explicitly not entitled to do what you say because it's a rule of the fund. Never mind even the future fund doesn't have the money to cover all the unfunded liabilities anyway. At least not yet. I agree that's a problem, but by the same token it's not really a political issue because governments of both persuasions ignored the problem for decades. And you're saying the first government to actually do something about it made one of the worst decisions for decades? Should they have just ignored it and pissed all the money (mostly from the Telstra sale and the surpluses made over the years) against the wall?

 

[Elroo]

But that would require a change in the rules of the fund wouldn't it?

As I understand it, members of the PSS and CSS (other government DB funds are probably similar) are explicitly not entitled to do what you say because it's a rule of the fund. Never mind even the future fund doesn't have the money to cover all the unfunded liabilities anyway. At least not yet. I agree that's a problem, but by the same token it's not really a political issue because governments of both persuasions ignored the problem for decades. And you're saying the first government to actually do something about it made one of the worst decisions for decades? Should they have just ignored it and pissed all the money (mostly from the Telstra sale and the surpluses made over the years) against the wall?

No it wouldn't have required a change of fund rules; just the political will to do it. The Future Fund should never have been established until the government had directly funded all of their outstanding employer superannuation contributions.

 

[Rob]

No it wouldn't have required a change of fund rules; just the political will to do it. The Future Fund should never have been established until the government had directly funded all of their outstanding employer superannuation contributions.

It's about a quarter of a trillion dollars isn't it?

Where do you suggest such an amount would come from all in one hit?

 

[Elroo]

It's about a quarter of a trillion dollars isn't it?

Where do you suggest such an amount would come from all in one hit?

Whats a 1/4 of a trillion dollars and why would it have to be paid "all in one hit"?

 

[Play by Numbers]

Succeeding with a proposed GST inceease would be a solid way to trigger a recession.

The drop in consumer spending is the last thing we need as growth in other areas like resources slows.

 

[Power Raid]

Succeeding with a proposed GST inceease would be a solid way to trigger a recession.

The drop in consumer spending is the last thing we need as growth in other areas like resources slows.

that was the claim last time and look what happened

 

[Gough]

$100 roast lambs?

 

[Maggie5]

$100 roast lambs?

Don't forget the high gas and power. Thank goodness they repealed the carbon tax.

 

[Gough]

Don't forget the high gas and power. Thank goodness they repealed the carbon tax.

I have a Nigerian business associate who would love to speak to PR, he is clearly a very wise man.

 

[apparentlydead]

I have a Nigerian business associate who would love to speak to PR, he is clearly a very wise man.

PR would school him on the craft of developing multiple personas on a single internet account and then charm him out of millions with his sweet stories of survival and triumph over adversity.

 

[Number37]

I have a Nigerian business associate who would love to speak to PR, he is clearly a very wise man.

Isn't PR a Nigerian businessman?
He certainly sells the same kinds of stories.

 

[PetrikDngerfild]

http://www.smh.com.au/business/rupe...siness-virtually-taxfree-20150405-1meu0l.html