Have Your Say


Welcome to the ‘Have Your Say’ section. We have received thousands of comments on articles over the years, but here is a chance for you to set the agenda.

Cuffelinks often receives emails from readers offering opinions on subjects not directly related to any article, including feedback on the weekly editorial in the newsletter.

While Cuffelinks is not licensed to give person financial advice and often cannot respond directly, ‘Have Your Say’ is a place where you can share your opinion and engage with each other.

We also receive many approaches from market experts, especially fund managers, wanting to write articles and asking what topics to cover. Raise any subjects you would like addressed.

You can also include comments about Cuffelinks itself. Do we cover some subjects too much? Not enough? Too complicated? Too simple? Articles too long?

Comments must meet our community standards of no product flog and no personal attacks. Keep it respectful and constructive.

Of course, comments relating to a specific article should be posted with that article.

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106 Responses to Have Your Say

  1. Nicholas Chaplin November 8, 2018 at 1:17 PM #

    Hi Graham,

    I must say I’ve lost any skerrick of respect for ‘Banking Day’ after they admitted two horrific actions – they bought Kevin Rudd’s memoir, and they read it! Anyway, now I know that Rudd felt a major bank was ‘near-fatal’ and yet the government did nothing (either by themselves or via APRA). Not surprised really, as I don’t believe the hype here at all, but one has to put some guff in a memoir to get it sold doesn’t one? Incidentally, do you know if the memoir was in mandarin? He has such a way with the language.

  2. Philip - Perth November 4, 2018 at 8:49 PM #

    If you want “public employee” superannuation benefits you’d join the public service. That’s about the ONLY advantage the public servants now have, given the lack of tenure and permanence that was once a feature. I agree wholeheartedly however that politicians should have the same fund as the public servants or be allowed to take their 9.25%pa and put it in an SMSF or public-offer fund – like the rest of the population. That would help ensure they don’t get a false sense of entitlement. One politician did exactly that: Alan Carpenter as WA State Premier about 15 years ago, but he was lonely in that morally strong position.

    • SMSF Trustee November 5, 2018 at 2:45 PM #

      I think there was a guy called Harradine who did something similar.
      People forget, though, that being a politician is a very different role professionally to anything else. What other job can you do really well for 3 years, the role doesn’t get made redundant, the employer still goes about its business, but you can get voted out for reasons totally unrelated to who you are or what you’ve personally done?

      I’m all in favour of a more generous scheme for those who make it through a couple of terms living on that edge.

    • Michael November 5, 2018 at 4:18 PM #

      In case you were not aware – new Federal pollies since 9 October 2004 are no longer eligible for generous defined benefits, that was stopped many years ago (2004) in the Howard/Latham era. See https://www.finance.gov.au/superannuation/parliamentary-superannuation/new-parliamentary-superannuation-arrangements.html

      New pollies have choice of fund, which now includes an SMSF if they wish. The default fund is AustralianSuper.
      They receive an employer contribution of 15.4%, the same level as new public sector employees receive in PSSap. So they are now on the same level of entitlement as public sector employees. The long standing pollies (pre October 2004) still get a defined benefit but that was part of their terms of “employment” so it continues for them. HOWEVER it is worth noting that although they get a generous benefit, they have to personally (post-tax) contribute 11.5% of salary for the first 18 years of service and 5.75% thereafter. I doubt that there is any other fund in the country that requires a personal, post-tax member contribution that high, so it’s not all taxpayer funded as many people think. See https://www.finance.gov.au/superannuation/parliamentary-superannuation/parliamentary-leaflet.html#member

  3. Peter November 3, 2018 at 9:36 PM #

    What to do if Labor gets in: http://www.nelligennet.com/musings/musings110.html

  4. Peter Ewers November 3, 2018 at 6:08 PM #

    Graham. Just read your article on travel and remembering, half way through a 1 month oliday in Europe (Spain, Portugal and France) it was absolutely spot on, right down to the photo books and small disasters. Great way of thinking about why we travel.

  5. Michael Savery November 2, 2018 at 10:17 AM #


    A comment from a loyal subscriber. My simple argument against the Labor franking proposal follows (may have been made by others but perhaps in more words).

    If I invest in Australian shares via an industry or retail super fund, the fund should be able to convey the full benefit of franking credit refunds to me, provided the fund is tax payable overall. Industry funds have already come out and said generally they do not expect to be affected.

    The exact same investment profile transplanted into an SMSF will typically lose that refund. This is not fair. The loss will be greater in pension phase than accumulation phase.

    My reason for using an SMSF rather than an industry or retail super fund is not tax related. It is to gain control, transparency and lower costs.

    • SH2071 November 3, 2018 at 9:58 AM #

      You have summarised my issue with the ALP proposals in a nutshell.
      If an ageing demographic means that 0% is no longer a sustainable tax rate for funds in pension mode, then set an appropriate tax rate, but it must apply to all types of super funds. And prepaid taxes such as franking credits must be taken into account when calculating the final balance due or refundable on tax return finalisation.
      That would be a fair system and not distort investment decisions.

    • Philip - Perth November 4, 2018 at 8:40 PM #

      Hello Michael Savery. I may have a solution for you…why not hold the shares you currently have in your SMSF in a wrap account/platform where the administrator can offset tax liabilities? Many now offer direct access to shares and having an SMSF is getting more expensive while using these platforms is getting cheaper. I won’t mention names, but the best are excellent and low-cost and much more convenient than most share trading accounts as well as far cheaper than using a broker. I spent 20 years putting clients into SMSFs until about 5 years ago and since then I’ve been getting them out. The Labor policy effectively only targets high value accounts in pension phase and as it will affect only a tiny minority (despite what Mr Wilson would have you believe) it will prove quite popular and a revenue raiser from the very people it should be raising revenue from. This country needs to raise more tax rather than less if we are to have a good society with First World health, education and welfare, not to mention Aged Care – something many reading this will need to consider over the next 20 years. In my view the SMSF’s days are numbered anyway, as an aging clientele won’t want the complications and costs for very much longer.

  6. Climate change wonderer November 1, 2018 at 11:32 AM #

    There is a very interesting at this web-site commenting on two recent reports on climate change. The really interesting item relates to the second report, which is a paper that conducted an audit of just how good/ sound is the temperature date underlying the conclusions of the Inter-Governmental Panel on Climate Change (IPCC) reports. My understanding is that the data isn’t that sound until around the 1950’s.

  7. Retired self-funded pensioner November 1, 2018 at 11:24 AM #

    Regarding Labor’s proposed franking credit policy: are the major industry super funds (Australian Super, I am thinking of you) taking any stance on the policy? I would have thought that if they can afford to spend their beneficiaries funds on advertising such as “compare the pair”, they should certainly spend money to oppose such a policy that MUST have a direct and material adverse affect on the incomes of at least those beneficiaries drawing a pension.

  8. Fergus Hardingham October 29, 2018 at 1:16 PM #

    Hi Graham,

    Thanks for your editorial comments in Edition 277: https://mailchi.mp/cuffelinks/edition-277

    Firstly while ASIC call Long/ Short funds HEDGE funds… we don’t… they are simply trying to generate returns from the rise and fall of asset prices and not just the rise of asset prices as LONG ONLY FUNDS aim to (but don’t always) do.

    The example below (which we use) – certainly shows a lower exposure to MARKET RISK and a better return profile over both bull and bear markets than simply being invested long (especially in the index).

    Again it is also not just the overall return but the RISK (including drawdown) taken to generate the return… larger drawdowns = longer recovery periods… noting that the ASX (price) index is, as you know, yet to recover post 2007 peaks.



  9. Leigh October 25, 2018 at 12:06 PM #

    A suggestion for another poll.

    We are often told the science on Climate Change is “in” and everyone accepts it.

    I think it would be interesting to obtain the thoughts of people who do think.

    So my suggested question is:

    “Do you believe Climate Change is due to the actions of mankind?”

    Obviously there are many similar types of questions that could be used in the future.

    • Wayne Ryan October 25, 2018 at 1:03 PM #

      Almost all the world’s climate scientists consider that the current rate of climate change is primarily a result of human activities. Even if there is a low chance they are correct, say as low as 10%, the anticipated adverse impacts are so great that risk management tells us we should be acting.

    • Ian Bradford October 25, 2018 at 5:21 PM #

      I agree 100% with Wayne – given the potentially extreme consequences of inaction compared to the relatively low costs of moving towards a sustainable future (which by definition we must eventually do!), it’s incomprehensible to me that our leaders continue to do nothing! Clearly it’s a case of “I won’t be around when the **it hits the fan”, so why bother? Personally I feel a big responsibility to leave this world in a state that will allow my great grand-children to be able to enjoy it as much as I have, but unfortunately many others seem prepared to risk their childrens future for a few dollars.

      • Warren Bird October 25, 2018 at 11:05 PM #

        Yes. If it’s only tail risk management it’s still vital. I believe it’s more than that, but in any case the cost of getting out of coal is now low enough to justify it as a tail risk strategy.

    • Tony Reardon October 25, 2018 at 7:33 PM #

      There must have been literally tens of thousands of posts, blogs, opinion pieces, etc. about climate predictions and political responses and it is probable that most of us who take an interest have positions which we would firmly defend. The various arguments have been expressed endlessly and I do not propose to re-iterate those that I find persuasive and those that I don’t.
      However I would make some what might be called “meta points” i.e. points about the whole argument rather than the substance of anthropogenic global warming and a proper political response.

      Firstly the ascribing of motives to people who disagree with you. It has been said (to paraphrase) that the right (in political terms) believe that the left are stupid; the left believe that the right are evil. Those on the left largely believe that they are superior moral beings. If we ascribe the “left” view to the climate alarmists and the “right” view to sceptics then we see examples such as in the comments of Ian Bradford here ascribing base motives to skeptics e.g. “I won’t be around … so why bother” and “prepared to risk their children’s future for a few dollars”.

      Secondly, arguing from authority especially when it comes to long term predictions. The tired claim of “97% of climate scientists agree”, etc. Without knowing what was asked, this is an attempt to get anything believed. If what we are really worried about is a prediction that global climate will be highly damaging for the well-being of great grand-children, then that has to be the question, not “has the climate warmed” or “Is some warming due to human activity”. We all know that predicting the future is virtually impossible and we can see examples of laughable attempts from our past. Even the IPCC says is that its models produce projections not predictions and states that “In climate research and modelling, we should recognize that we are dealing with a coupled non-linear chaotic system, and therefore that the long-term prediction of future climate states is not possible.”

      Thirdly the “precautionary principle” or risk management. Even if the chances are low, the cost is high therefore take action (or take no action depending on the topic). So we shouldn’t have GM food, we shouldn’t have had mobile phones, we shouldn’t have overhead power lines, we shouldn’t have nuclear power plants, etc. These were all argued against strongly – and some still are. We have to take decisions and the precautionary principle replaces the balancing of risks and benefits with what best be described as pure pessimism. It is rational to allow this thinking to influence decisions but it is not a sole basis for making decisions. When a sensible discussion of cost benefit trade-offs is produced by such people as Bjorn Lomborg from the Copenhagen Consensus Centre, we can see the real damage to existing populations of taking actions to possibly prevent possible future issues.
      As is no doubt obvious, I am very skeptical of the whole climate alarmism but I am particularly annoyed by the sheer inanity of one single number such as 1.5 or 2 degrees Celsius as some meaningful measure of anything real when it comes to the Earth’s atmosphere. Clearly averaging night time temperatures in the middle of winter in Antarctica with noon time temperatures in the middle of summer in the Sahara and all places in between including oceans and mountains, does not produce anything meaningful. The process of establishing some number to publicise is convoluted and questionable relying as it does on historic baselines which are adjusted and homogenized within an inch of their life.

      • Stan October 29, 2018 at 8:35 AM #

        I’d like to include this chart as a comment about climate change? Note the time scale and source. Source: Bureau of Meteorology


      • Tony reardon November 8, 2018 at 7:11 PM #

        This graph illustrates some of the issues on this topic. The graph purports to show some change in the annual worldwide average temperature but the question has to be asked as to what data is being graphed? It clearly is not some specific actual set of numbers collected but is the result of much adding up and averaging but of what?

        If you were asked what is the average temperature in some specific place in Australia today perhaps you might take a measurement every few minutes and calculate an average over the 24 hours. But this isn’t what is recorded, the instruments only record the daily minimum and maximum. So we can’t do that, we can only take the pair of values and calculate a mean.
        Can we sensibly ask “what is the average of minimum/maximum temperatures across Australia on any given day?” Could we take the readings from the approximately 800 stations, add them up and divide by 800? Well, no because we should give equal weight to the temperature at each and every one of the 7.7 million square kilometres in Australia but the 800 stations are clustered in inhabited areas and are sited to be useful e.g. at airports. So a process of calculation, weighting and smoothing has to be done whereby values for all of the points in between stations are sort of smeared across the intervening square kilometres.
        Move this set of issues up to a world scale and include oceans and consider the amount of interpolating, smearing and averaging that has to take place (and the lack of actual data across huge areas).
        The graph is of “temperature anomalies” rather that actual temperatures where some number is taken as a base (the average of years 1961-1990) which is then subtracted from the value of a given year to give the figure that is graphed. This process might be done for individual stations before the geographical smearing, after that process or at any other stage in the roll-up process of days and months.
        Note that the original single station minimum/maximum data is recorded at no better than an accuracy level of .1 degrees. Note also that no-one was thinking about any of this in the recording processes or levels of accuracy for most of the last 150 or so years and the old data cannot be recollected or reproduced. Not many readings of Antarctic temperatures back in 1860 or even many stations in Australia! There are lots of issues as to data quality, “corrections” to old data, removals of “anomalies”, plus changes in the physical environment, changes in equipment, etc. so accuracy levels are not fantastic.
        The resulting graph shows the results of all this calculation across a range of -.4 to +.8 degrees with no degree of error indicated.
        What people imagine by a temperature increase is probably something that a human could sense unaided, increases in maximums, very hot days, etc. whereas we actually seem to have are small increases in the Arctic and in night time temperatures. With a global average temperature down around 14.5 C, this increase, together with an increase in CO2, would seem to be a good thing (certainly better than a colder world). But perhaps, as per Candide, back in 1980 we lived in the best of all possible worlds.

    • Jay October 28, 2018 at 1:09 PM #

      Why hasn’t there been more noise against Labors, to be introduced Franking credit tax? It is very quiet in retrospect. Does everyone think the Liberals will win?

  10. Carlo October 19, 2018 at 9:51 AM #

    SMSF Funds in pension mode are required to drawdown from the Fund each year an increasing minimum amount on a percentage basis. I suggest that the original rationale for that imposition is increasingly less relevant or fair in today’s world. The drawdown regulation was clearly to avoid members accumulating increasingly large asset bases through a tax exempt funding superannuation system and consequently understandable. However in light of developments since it is surely time to reconsider and adjust the drawdown levels and assessment methods. The relevant factors are detailed below and cumulatively adversely affect the longer-term confidence of many SMSF retirees in their Plan’s ability to deliver the sort of security for their older age needs that they had planned for.

    1 The numerous Government changes imposed on SMSF superannuation in particular have reduced the levels of attraction for SMSF-type retirement saving – in a stable income accumulation and pension sense. The latest being the relatively recent $1.6 total asset cap. In an increasingly less stable world achieving responsible income and asset growth return is a much riskier and uncertain process – especially when the asset total is now capped at a lower level for many whose hard work and saving for retirement had planned on a more liberal asset base regime. Although a one-off government pause was applied belatedly during the GFC there are no guarantees of similar “legislation” for future significant downturns – even though each such adverse investment period significantly reduces the asset base on which retirees rely for earning their anticipated incomes. And importantly the older they are the less likelihood they have of ever “repairing” that unplanned asset loss.

    2 Retirees’ likely life spans are increasingly longer for many. Investment return volatility and downturn risks pose very real concerns for many self-funded retirees about whether they will be able to rely on income levels for which they had planned until death. Actuarial calculations on which SMSF legislation rules are predicated on statistics that are some 3 to 5 years in arrears of current experience and in any case questionable when for instance similar UK statistics are compared to Australian. Despite Australia being considered a healthier country than the UK as proved by underlying statistical evidence the UK actuarial tables favour greater longevity and that in turn affects government legislation in respect of superannuation entitlements. That important actuarial discrepancy adversely determines the government’s annual compulsory drawdown percentages against Australian retirees.

    3 The announced Labor pronouncements relating to franking and related tax effects would further adversely impact SMSF retirees’ earning and asset base and consequently add further stress on their ability to earn income sufficient for their living span.

    Conclusions:- Australia’s superannuation regime since inception has become increasingly less certain as the medium to save for retirement with confidence. Government has contributed to that uncertainty through rule/tax changes which disadvantage most self-funded retirees. The effect of #1 through #3 above only worsen self-funded retirees’ fears that what they had saved for will be inadequate for their lifespan due to increasing longevity, government superannuation changes, less stable investment environments, and outdated annual mandatory drawdown regulations that unfairly disadvantage those who chose to be self-reliant and independent of government benefits through hard work and saving. Much about Australia’s superannuation regime remains questionable and in need of drastic review –particularly from a self-funded retiree standpoint. But a critical urgent starting point should be a review of the underlying rules/rationale for the current annually increasing mandatory drawdown levels to reduce the risk to many SMSF retirees of their savings “bankruptcy” before they die.

    Lastly – in the overall Australian superannuation regime context, it is surely reprehensible that politicians and government employees generally continue to enjoy far superior retirement plans and benefits which also often guarantee benefit levels. The historical contexts for such benefits have long since ceased to apply. Most Australians I’m sure would welcome public employee superannuation benefits that more equitably relate to those applying to Australians in general.

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