An Australian Equivalent of National Savings & Investments

It’s Christmas Eve and I hadn’t planned to write you a note today, but there was a news item from yesterday that I just couldn’t ignore.

I’ll keep it brief though as there’s still a bunch of last minute Christmas shopping to take care of, and we are supposedly on holiday…

You have to ask yourself, why on earth would a man who was touted as one of the brightest chaps in banking, take up the reins as chief executive of *yawn* Australia Post?

I mean, surely it would be the equivalent of one of Henry Ford’s executives leaving the budding automobile industry of the 1920s to instead head off to run Coach & Horses Inc.

It got us to thinking. As you can imagine, nothing is straight forward in the minds of the folk here at Money Morning’s global headquarters in Fitzroy Street, St Kilda.

When we see the news that Ahmed Fahour, the man who had been named to run Ruddbank now being put in charge of the post office, it sets the Money Morning alarm bells ringing.

Yep, there can be little doubt that this is an updated version of Ruddbank by the back door.

To be honest, we’d actually forgotten about that crazy idea. The Australian Business Investment Partnership was the plan to put taxpayers on the hook for billions of dollars worth of property loans.

Thankfully the whole idea flopped. Of course that didn’t stop the government spending your tax dollars in other ways, such as on the first homebuyers bribe.

But now taxpayers could be in real trouble. And so could superannuants.

You know we’re pretty fond of maths, and this looks like being the proverbial one plus one. Would we be surprised to see Australia Post given an expanded role under the Tax Review or the Superannuation Review? No, of course we wouldn’t.

But perhaps the biggest threat to taxpayers is from an indirect source.

And it goes by the name of Premium Bonds. What’s that? Let me explain…

Premium Bonds are a UK “savings” scheme. Run by the government, individuals can invest anything from £100 to £30,000 in 100% secure government Premium Bonds.

Similar to a bond, you are promised to at least receive back your initial investment on maturity. Or in this case, on demand.

The difference from a normal bond is that rather than receiving regular interest payments your bond “number” is entered into a monthly prize draw where you have the chance to win between £25 and £1 million.

In effect it’s a state sponsored and funded lottery with tax free winnings.

You may think, “What’s the problem with that? Sounds like a good idea.”

On the surface, you could think it’s all pretty harmless. But of course it isn’t. It’s really just another method for the government to increase its debt liabilities at the expense of the humble taxpayer, saver and investor.

Not only that but the organization that runs the Premium Bonds – National Savings & Investments – is drawing funds away from the private sector into the clutches of the UK government. At which point it pours the money down the drain of clapped out disasters such as the National Health Service (NHS).

Yes, take off those rose-tinted glasses, the NHS is a 100% failure.

So, you can forget Ruddbank and the funding of the commercial property market. The bigger threat on the horizon is an Australian equivalent of National Savings & Investments. Doubtless it will be called something twee like “Aussie Saver” or “Aussaver” or even Aussie National Savings ACCounts – or ANSACC for short!

Recent comments from the government indicate it is in no rush to cut back on its spending plans and the stimulus. The only problem it has to solve is how does it get its hands on taxpayer cash without causing too much alarm.

The obvious step is to establish a savings institution, and what better an organization than one that has over 4,000 branches and a presence in almost every Australian suburb – Australia Post.

What you’re looking at here is a coordinated raiding party on the savings of every Australian. But rather than the raiding party being decked out in black, wearing eye-patches and sporting cutlasses, this raiding party is in the form of a smiling and personable ex-banker.

For the government it’s a perfect way of raising money. We’re not saying the scheme will be identical to the UKs Premium Bonds, but it certainly won’t be far off the mark.

It’ll be an alternative to a cash savings account or the risky stock market. Superannuation funds in particular – especially self managed superannuation funds – will be encouraged to buy government guaranteed bonds.

Guaranteed bonds that can be converted into a government provided annuity on retirement perhaps?

Who knows? Anything’s possible.

And forget about the Commonwealth Bank’s Dollarmite savings accounts, a new savings account through the Post Office will be the new rage.

Think about it, it makes sense. At every other stage of your life the government is either taking money from you in taxes, or giving it back to you in bribes – or benefits and tax breaks as they prefer to call them.

The only exception is with the kiddies. Sure, they get benefits, but that all goes to the parents. Imagine if the government could provide a savings scheme direct to the kiddies. So that as they’ve finished saving up their pocket money over ten, fifteen or twenty years, at the time their ready to get their money back they get a nice big cheque from nice Mr. Government.

It’ll be the culmination of the ‘Cradle to the Grave’ for government influence and control over the citizenry.

Make no mistake, the ANSACCs will be touted as a soft and fluffy savings scheme offered by the friendly government.

The reality is that it will allow the government to suck even larger amounts of investment out of the economy for it to spend on its own worthless and pointless pet projects – an Australian National Health Service is an obvious start.

If you’re still in doubt about how that will work out, and how irresponsible governments are with taxpayers money, then I suggest you look no further than the soon-to-be-bankrupt UK.

Cheers.
Kris.


Money Morning is Australia’s most outspoken financial news service. Your Money Morning editorial team are not afraid to tell it like it is. From calling out politicians to taking on the housing industry, our aim is to cut through the hype and BS to help you make sense of the stories that make a difference to your wealth. Whether you agree with us or not, you’ll find our common-sense, thought provoking arguments well worth a read.

Money Morning Australia is published by Port Phillip Publishing, an independent financial publisher based in Melbourne, Australia. As an Australian financial services license holder we are subject to the regulations and laws of Corporations Act and Financial Services Act.


6 responses to “An Australian Equivalent of National Savings & Investments

  1. Kris,

    There aren’t many times I disagree with your comments but to call the UK National Health Service a 100% failure is a gross distortion of the truth and it is particularly distressing to read it on a site that I look to for exposing the worst of the hype behind the barrage of propaganda that bombards us from so many other sources.

    The NHS has many problems, mainly due it is true by interference through ham fisted government interference in areas of the service that should be left to the professionals, but the immense security it brings to the vast majority of the population makes it worthwhile for most of us.

  2. etch – I assume that have you included this hotlink to demonstrate some of the seriously deranged lunatics that exist in the USA . 60 secs of research clearly debunks the ludicrous claims being made by this fool.

  3. how can u call em deranged & u dont even live in the usa???????
    & he does with heaps of financial trouble, house foreclosures ,millions jobless ,homeless etc etc etc
    its not just one video ,theres heaps around on youtube

    http://inflation.us/videos.html

    IT COULD BE PARANOIA to some degree especially if u live in the usa
    its all happening but not too widely disclosed ..usa cannot pay its way out of DEBT …u understand DEBT ,cant even pay the interest

    therefore such as hence they will combine usa,canada & mexico into the north american union NAU & bring in new currency ,start afresh ,a ” FORCE de MAJOURE”.

    the AMERO which is worth 2 cents on the old dollar &
    by jingo thats all china & other usa”s creditors will GET

  4. Just for some sport, my point by point response:
    “how can u call em deranged & u dont even live in the usa??????? & he does” – I was not suggesting that the commentator in the video is representative of all people in the USA, just that he represents the type of conspiracy theorists that grab gullible people’s attention from time to time. I actually thought that you provided this link for the same reason – clearly not!! Secondly, how is my not living in the US relevant? – it doesn’t make the claims any more correct nor my ability to to debunk them any less so.
    Next; I did not at any stage suggest that the US is not facing serious financial and economic problems – it clearly is and these are likely to take years to resolve. Fortunately for Australia we no longer have the same level of dependence on the US that dictates how our economy reacts, although I’m sure there are many that will take issue with this.
    Regarding the establishment of the NAU and the Amero, here’s a couple of links in return – http://bankl ing.com/2009/ the-amero-currency-myths-facts-and-25-great-resources-for-further-research/ and http://www.denverpost.com/news/ci_7307870
    Lastly; the Amero is not a currency, despite the Denver Mint being used to mint some “coins”. It is merely a collectible at best, or even an elaborate practical joke. It has some trivial value in this context. There are also some commentators who have ascribed a notional exchange value to the Amero against the $US, however this is no more than a hypothetical exercise. Many of these have tended to assume a $US parity with the $C and that the Amero will have parity with these two currencies.

  5. I’m not sure about the Amero coins being genuine, but the march towards hyperinflation in America is a mathematical inevitability.

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