Now as it turns out it was probablythe best thing I ever did. But it does add weight to what Fiona’s saying,that people do need confidence that thesystem’s going to remain intact beforecommit, it’s a behavioural thing.Tony Harris: I wouldn’t build acastle on my need for certainty, becauseyou just don’t – you shouldn’t get it inthis economy.Tony Cole: I just want to mentionsomething about

Singapore, just becauseit will get lost. One of the thingsyou have to know about

Singapore isthat the money has always been investedin government bonds, and that most ofthe bonds that are issued in Singaporeare issued only to give the CPF somethingto buy, something to invest in.

And typically the interest rate paidon those bonds has been around 2.5 percent, although I think it got as high as4.25 for a very brief period. But that’swhy it’s inadequate, not withstandingthe vast amount of contribution.The second thing is that it’s cappedout at a moderate salary. So the majorityof people are actually on the cap, themajority of people contribute the capamount. It’s still not enough, it produceswoefully inadequate retirementincomes.Pauline Vamos: Often when peoplethink about super, they don’t thinkabout its investment in the economy.

Some parliamentarians still think thatall the super money is in a box somewhere,under somebody’s desk, andthe bottom line is, it invests in the realeconomy, it owns 25 per cent of thelisted shares on the ASX. So the moneythat goes in is actually spent because ithas to be invested, whereas the moneythat’s given to consumers directly is notnecessarily invested, or even stimulates the economy.

That was one of theuncertainties around the impact of theeconomists’ suggestions. Michael Bailey: If the 6 per cent hadbeen in place since last November, hypothetically,would that have made anydifference to the job losses we’ve seen?Nicholas Gruen:Of course, I meanhow much we can argue about, but thatthere wouldn’t have been an effect isabsurd. Just as it’s quite obvious that thecash splash, as it’s now called, had someeffect.Tony Harris: To the extent it doesn’t have an effect, the superannuation industry can relax.

Because peoplethat won’t take up the option to reduceSG to 6, they’ll put in their own salarysacrificed contributions. To the extentit does work well, that’s what it’s aimedto achieve.Tony Cole: People can always makevoluntary contributions, the 3 per centunder our proposal would immediatelygo into salaries, but people choosing tomake voluntary contributions can salarysacrifice ….Garry Weaven: But only half theworkforce can salary sacrifice, it’s driven- as superannuation used to be entirelydriven – by employer decisions.

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