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February 2005   

Economics: Super Seduction
Sharks are circling your super. From July 1, banks and financial planners will have access to the nesteggs of an extra four million workers.

Interview: Bono and Me
ACTU Sharan Burrow lifts the lid on the rock star lifestyle of an international union leader.

Unions: The Eight Hour Day and the Holy Spirit
Rowan Cahill bucks conventional wisdom to argue the eight-hour day began in Sydney.

Economics: OEC-Who?
The OECD calls for more reform. But, Asks Neale Towart, who is really doing the calling?

Technology: From Widgets to Digits
How can unions grow and continue to successfully represent workers when their traditional structures are rooted in an industry, craft or fixed location?

Education: Dumb and Dumber
Unions are leading the fight against a political agenda that does away with smart jobs.

Health: No Place for the Young
The support of union members is required to help get young people out of nursing homes, writes Mark Robinson

History: The Work-In That Changed a Nation
February 17 marks 30-years to the day that sacked coal miners at the NSW Northern District Nymboida Colliery began their historic work-in at the mine.

Review: Dare to Win
The history of the militant and often controversial BLF is as surprising as it is fascinating writes Tim Brunero.

Poetry: Labor's Dreaming
With another change at the helm of the Labor Party, our resident bard, David Peetz, can't help but dreamily drawing on some political history.


Titanic Forces
There are book reviewers who have not read the book they have just reviewed and there are critics who have criticised films they have not yet seen. I want to review a novel that has not yet been written.

The Soapbox
Labour and Labor
Grant Bellchamber looks at the relationship between both sides organised labour

Aussie Unions Help Tsunami Victims
The union movement�s aid agency reports back on its relief effort in Asia.

The Locker Room
Game, Set and Yawn
Phil Doyle asks if tennis is evil or just boring

The Westie Wing
As a reshuffle of the State Ministry settles in and the Federal Government throws down the gauntlet, 2005 promises to be a new and vital chapter in the struggle for workers and their families, writes Ian West in Macquarie Street.


Polar Shifts
And so Workers Online makes our belated return to 2005 - and while we may have the same old familiar faces in Federal Parliament, politically, it�s a whole new ball game.


 Plastic Man Crosses the Line

 Taskforce Loses "Payback" Evidence

 Court Out � Again

 Blue Chips Fried in CBD

 Bosses Duck Decapitation

 Computer Driven Posties

 Stalking Horses in Safety Stampede

 Low Blow in Ferry Blue

 Howard "Unbalanced"

 Picketers Chase Millions

 Whistleblower Beats Bullies

 Mateship Shines Through

 Queensland Marks Power Grab

 Vale Laurie Aarons 1917-2005

 Nelson's Double Standard
 Morals Beat Hasty Retreat
 Uncounted Cost Of Asbestos
 Voting Farce Expands
 I Beg To Differ
 Politics Smolitics
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Super Seduction

By Jim Maher

Sharks are circling your super. From July 1, banks and financial planners will have access to the nesteggs of an extra four million workers.


How would you like to have an extra $212,000 in the bank?

That's one question posed by research into the performance of various superannuation products on the Australian market.

Rainmaker Information analysts concluded that a worker in an industry fund earning $40,000 a year, with $10,000 accrued today, could end up $212,000 better off than someone in a for-profit arrangement.

The analysis was based on the relative performances of industry funds and the for-profit sector, over the past five years, and assumed the worker would cash in his chips in 40 years time.

It highlights the differences that can accrue from seemingly minor discrepancies over a lengthy period, especially when they compound every day of a working life.

Shark Net Slashed

Rainmaker's figures were based on research that showed not-for-profit industry funds outperformed retail funds, for the average working Australian, by $160 over the last 12 months, and $2500 over the last five years.

It reinforced research that showed fees charged by banks, insurance companies and financial planners were much higher than those levied by industry funds.

Independent research firm, SuperRatings, found the average for-profit (master trust) returned $2.50 for every dollar taken out in fees. For the same price, industry funds added around $8.60 to members' nest eggs.

The findings have gained widespread publicity because of the federal government's move to open up industry funds to competition from banks, insurance companies and other private operators from July 1, this year.

Golden Eggs Run Dry

Industry funds were established as part of the accord between the ACTU and the Keating Labor Government to lift national savings rates and have been effective in achieving that goal.

Usually managed by a board of worker and employer representatives, they return all profits to members.

Some economists believe the vast amount of investment money at their disposal, more than $250 billion, has been an important factor in Australia's relatively strong economic performance.

That amount of money, though, is a lure for John Howard's big business constituency and worries those who believe workers' voices should not be heard in boardrooms.

Architect's Dream Snuffed Out

The "choice" legislation is only the second major move the federal government has made on super since it was elected eight years ago. The first was to squash movements that would have taken compulsory contributions to 15 percent of annual income.

According to the ACTU, in 2004 dollars, single people will need $32,800 a year for a "comfortable" retirement. That means access to lump sums of $420,000.

If the average Aussie saves only the nine percent Super Guarantee Contribution, at current rates of return, he or she would have $167,000 in 30 years time or an annual entitlement to $19,800.

Every dollar that goes missing along the way, through poor investment decisions or fees, is important because it compounds again and again during our lifetimes

When ABC and Sydney Morning Herald commentator, Alan Kohler, compared industry funds with for-profit super he came to a thought-provoking conclusion.

"There's an awkward secret at the centre of Australia's superannuation system," Kohler wrote last August. "The socialists are winning.

"Think about this: virtually every industry fund has performed better than every retail fund since 1998 - but at the same time every industry fund costs about half of every retail fund because there's no need for a profit and those managing them earn smaller salaries."

Getting the Message?

From July 1, banks, insurance companies and financial planners will have access to the accounts of an extra four million working Australians. Choice of Fund legislation won't apply to workers covered by state awards, certified agreements of AWAs that specify a fund but all new employees must be handed a "standard choice form" within 28 days of starting. The choice legislation over-rides default funds in federal awards.

The Feeding Frenzy

We can't tell you where you will find most satisfaction but we can warn you what to look for when a member of the quick buck brigade is prowling you, and what his tactics could be...

Will He Respect You Tomorrow?

Hidden fees are the specialty of this smooth talking individual. Remember, when someone's only after one thing, you won't necessarily hear the full story.

Hidden fees can wreck your plans. Last year, one industry fund member tried to move her $2,104 account and was confronted, by a bank, with a demand for $1,234 for the privilege. Another financial institution came up with a $10,114.44 exit fee on an investor.

Honeymoon Harry

Another silver tongued devil out to woo you and screw you.

Honeymoon rates are the oldest trick in the book, luring people into relationships by not coming clean on the long-term ramifications. He'll tell you what you want to hear but the truth will come out once the deal has been consummated.

This bloke's up-front fees are competitive but your costs are loaded onto the back-end of the deal. He's almost encouraged by Choice of Fund legislation that only requires suitors to disclose their intentions for the first year.

Honeymoon rates have been remarkably successful in the home mortgage sector where many Australians have signed up for products that will cost tens of thousands of extra dollars in the long run.

Just a Gigolo

Trail commissions can be the sand in the knickers of a super relationship. Just when you think you've finally got on top, this fellow will keep nibbling away at your nest egg.

Trail commissions are the lifeblood of financial planners, they're how they finance their lifestyles. They might not seem dramatic in the heat of your first encounter but over a lifetime they can skim the cream off your plate.

Dressed to Thrill

Straight from the big end of town, Flash Freddie's got the firepower to turn your head. He's unlikely to knock on your door in person but, sure as eggs are eggs, you will find him in the living room and even laid out, most attractively, on the breakfast table.

Fancy marketing is the seduction technique of banks and insurance companies under pressure to return dividends to shareholders. Not all are up to no good, not by any stretch, but they've got deep enough pockets to fund an advertising orgy.

When you get your invitation, peel back the wrapping and check out the fine print.


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