Bank Deposits May Be Safe, But Super's Been Hit

Sydney Morning Herald

Monday October 13, 2008

Governments around the world are hastily guaranteeing bank deposits. Unfortunately, most savings are tied up in superannuation. In Australia the Superannuation Guarantee (Administration) Act, 1992 sets out the rules for employers to contribute funds for employees, currently 9 per cent. This has resulted in super funds controlling about $1 trillion, much of which is invested in global sharemarkets. Eighty per cent of bank depositors in Australia have less than $20,000 in their accounts.

It may be reassuring for bank depositors to know the Government is backing them up, but when it comes to superannuation you are but flotsam floating in a sea of turmoil and loss.

Greg Thomas Annandale

John Daniels and Mark Bloomfield (Letters, October 11-12) are barking up the wrong tree. One of the main reasons the Australian economy did not go into meltdown during the Asian financial crisis was because the dollar had been floated. Not only that, but the banking system, whilst deregulated, was strong because of the economic reforms of the late 1980s and early 1990s.

The party that should be thanked for our strong position is the Labor Party led by Bob Hawke and Paul Keating. It was their reforms that strengthened the banking system and the economy.

John Thornton Doonside

Australia is in a superior financial position irrespective of the Coalition, not because of it.

Saying the Coalition government has provided for this sound state of financial affairs amid a massive resources boom is like saying the passengers in the back seat are the reason the car is moving. No, they just happen to be lucky enough to enjoy the ride.

Karlo Tychsen Mayfield East

The original Blind Freddie used to sweep the floors in a stockbroker's office. Even he knew that you buy in gloom, sell in boom. Now we have computers that do exactly the opposite. Any wonder the financial world's up the proverbial creek.

Chris Glynn Kaleen (ACT)

China: the salvation of capitalism. That's global warming for you.

Fergus Davidson Russell Lea

Is George Bush the most incompetent President ever to hold office in the White House? Judging by his latest response to carnage on world money markets the answer is a resounding "yes". On his watch he has allowed the bankers and hedge fund jockeys to use the money markets as personal casinos.

The only way confidence will be restored is to prosecute. I am confident that an image of handcuffed Wall Street bankers sitting in the dock facing charges of financial fraud will instil renewed confidence in the world money markets.

Mike Ingram Miami (Qld)

Since HSC students left school last month nothing much has changed in ancient Rome or Greece. The causes of World War I and II remain the same.The rules of algebra and geometry still apply, as do the laws of physics and chemistry. Shakespeare still strides the literary world like a colossus. However, for students of economics ...

Tom Dolan Narraweena