As Global Government’s in India, Venezuela, and China roll out financial policies devaluing their currencies, fellow citizens of the first world may have considered themselves immune. But when Australia’s Queensland Government passed legislation last week, enabling them to repatriate public servant’s superannuation savings – without community consultation, the value of democracy declined.
Due to an ongoing budget crisis resulting from the resources-crash, Queensland’s credit rating was first downgraded to AA+ in 2009, then further dropped by Fitch and Moody’s to AA following the 2012 budget.
In an attempt to save its rating the Queensland government decided to draw $4 billion from the $34 billion QSuper defined benefits scheme and $10 billion from government-owned corporations.
Although state actuary, Wayne Cannon, warned the action created a 20% risk of an accrued deficit in the fund, Treasurer Curtis Pitt went ahead regardless.
Consequently, rating agency Standard and Poor’s kept the state’s credit rating steady and says Queensland could regain its AAA rating within two years. “The state government is focused on implementing its debt action plan and in the recent 2016-17 budget announced that it would repatriate about $4 billion in excess superannuation assets to repay debt and fund infrastructure, while maintaining its fully funded nature,” the agency said.
Shadow Treasurer Scott Emerson said the changes would give a treasury bureaucrat the ability to lower the multiple at which long-serving public servant’s final retirement figure was calculated under the defined benefit scheme. “This would significantly reduce the final retirement benefit of core public servants including police, teachers and nurses,” Mr Emerson told parliament.
“The changes would mean public servants who have successfully negotiated to have allowances rolled into their salary will no longer have this considered as part of their super entitlements.”
The LNP claimed it could leave a public servant with more than 30 years’ service $210,000 worse off.
LNP leader, Tim Nicholls, said the bill was mostly a repeat of legislation prepared by his party during its term, but contained “risky, sneaky and reckless” provisions. “The only new thing that this Treasurer has done in this legislation is attempt a raid on public servants’ superannuation,” Mr Nicholls said.
Perhaps the most dangerous part of the Revenue and Other Legislation Bill 2016 was the line: “Community consultation was not undertaken in relation to the revenue legislation amendments in the Bill. Consultation was not considered necessary or appropriate as these amendments are necessary to protect the State’s revenue…”
Nathan van den Bosch, founder and CEO of Sydney based Bitcoin investment company, Bitcoin Trader says the decision is having a significant impact on the way citizens invest their Super. “Historically people diversify their portfolio with a 5-10% Bitcoin investment. We are now fielding panicked calls from individuals who want to convert their entire savings into Bitcoin.”
The Queensland Government’s decision is rippling beyond local borders. Van den Bosch says the legislation sets a dangerous precedent across the entire country, “With a stroke of a pen, any Government can take your Super – Bitcoin is the only asset class immune to third party repatriation.”
Bitcoin Trader assists individuals in the establishment of Self-Managed Super Funds for Bitcoin investment.
Featured on Cryptocoinsnews December 6, 2016