"The Henry tax review saw this clearly and had its findings ignored. Keen to jump on its support of a resource super profits tax Labor turned its back on the review's equally serious finding that compulsory super "remain at 9 per cent". It chose the day it released the review – May 2, 2010 – to announce that it would do the opposite: lift compulsory super contributions swiftly to 12 per cent over the next nine years.

The superannuation cheer squad loved it. Many of them work in an industry that would manage nothing like as much as the present $1.85 trillion were it not for compulsion. Where else can you perform badly (most funds fail to match the sharemarket after deducting fees) and still be rewarded with an extra 9 per cent (now 9.5 per cent) of wage earners' income flowing your way each year.

An increase to 12 per cent would have been even better.

Curiously, Labor's mates in the union movement occupy almost half the seats on industry fund boards. Bill Shorten himself sat on one. Where else can you get the finance industry and the union movement to agree that taking money out of your wages is good for you?

I mentioned wages. Strictly speaking, compulsory super contributions are paid by employers in addition to wages rather than being taken from wages. But it's easy to see where employers get the funds. When they are forced to pay more into super they don't increase the amount they are prepared to secure the services of each employee. Instead they change the way it is broken up. They pay a higher proportion in super (because they are forced to) and a lower proportion in wages.

When compulsory super contributions climb, the next wage increase is lower than it would have been. Employers fork out what they would have anyway. Their workers get less cash in their hands, more saved up for them in super."

 

The argument is that if people want to save more, they can choose to themselves. It is very much about the individual rights versus the needs of the system. The AFR argues the systemic case:

 

"You’re going to have to save harder than ever to get enough to retire on thanks to this week’s decision by the federal ­government to postpone increases in ­compulsory superannuation.