Can’t have your cake and eat it too

From selfmanagedsuper editor, Darin Tyson-Chan, Inaugural SMSF Association Trade Media Journalist of the Year

As we all know, there is a federal election looming this year that will probably take place in May. And if you believe the polls, we are on track for a change of government in 2022.

So it’s particularly important to pay attention to the narrative Shadow Assistant Treasurer and Shadow Minister for Financial Services Stephen Jones is now building. And in an opportune and timely manner the member for Whitlam was the guest speaker at one of the first industry events for the year.

I was particularly interested in getting a sense of what his and the Labor Party’s likely attitude is toward the sector in which we all play a part. Unfortunately, the only thing I walked away with after his speech was a sense of confusion as a result of the mixed messages Jones had just delivered.

One point he was at pains to make was the fact he didn’t think it was the government’s job to dictate how superannuation savings are to be spent. In the same breath though he was highly critical of how the early access to superannuation COVID-19 relief measure had been executed because it had allowed people to spend up to $20,000 of their retirement savings on items that were not of a critical financial survival nature.

However, immediately after this criticism he lavished praise on the results of the initiative, citing it had provided a much welcome boost to the retail sector of the economy. Is it just me or this a confused way of thinking? To my mind it seems contradictory to accuse someone who accessed their super early and bought a big screen TV as not using the money properly, but at the same time praising that same individual for sustaining the economic health of the retail sector when it was being smashed by the coronavirus.

He also praised individuals he discovered had used their super to pay staff salaries during the most economically crippling part of the pandemic lockdown to date. Is this an acceptable use of these funds or is that definition reserved for more basic spending patterns, such as buying food for one’s family or paying off one’s mortgage? I’m pretty sure the loudest critics of the measure, such as the industry funds, which were against it in any way, shape or form, probably wouldn’t think so.

So I walked away not exactly sure of what his attitude toward the sector and the portfolio is. To me it seems Jones basically wants to have his cake and eat it too and I don’t think this is possible.

And it appeared to indicate our elected officials don’t seem to understand the most fundamental tenet of the superannuation system in this country – super is the individual’s money and they can spend it any way they see fit regardless of what ‘conventional thinking’ would otherwise dictate.

I know I’ve said it before, but until the politicians get this point, sensible policy initiatives for the sector could be very difficult to come by.