Discussion about this post

User's avatar
George Whitlam's avatar

The incompatibility of compulsory superannuation with economic realities has not emerged to date because of favorable demographics, asset price inflation, limited withdrawals, and the psychological detachment of savers from market risks. However, this fragile equilibrium depends on continuous inflows, favorable market conditions, and low inflation. As these conditions shift, the system’s vulnerabilities will likely become more apparent, necessitating significant reforms to ensure its long-term viability.

Expand full comment
George Whitlam's avatar

Australia's superannuation system channels massive income flows into financial markets, increasing the demand for and price of financial assets like shares and real estate. Asset holders benefit disproportionately, while workers contribute to a system that drives up the cost of living. Why aren’t super funds required to invest in productive infrastructure rather than financial speculation? For example, why doesn’t the Government create incentives for funding renewable energy projects, public transport, or affordable housing?

Expand full comment
1 more comment...

No posts