Jazz Festivals, Housing and Super: The Unintended Side Effects of Regulation

Welcome to that super show, the podcast where we talk about all things super from the inside.

I'm Neil Benson, Chief Product Officer at Chandler cx.

And I'm Sarah Penn, CEO of Mayflower Consulting.

Each week we unpack what's changing in the industry, what funds are wrestling with and how tech and regulation are shaping the landscape.

Sometimes we bring in expert guests, but mostly it's just us having a real conversation about how super is working and what could make it even better.

Let's get into.

G', day, Sarah.

How are you doing?

Hey, Neil.

I'm very good.

It's been ages since we've done one of these.

Sort of really looking forward to it.

Well, maybe you're looking forward to it more than me, but we're recording this at lunchtime and I had a bit of a snack earlier, knowing that we're going to be recording during lunch and I've just eaten about a handful of salt and vinegar rice cakes and I feel like somebody has taken a layer of skin off my tongue and put a sock in my mouth.

Which is just what you want when you're going to record a podcast, your favorite show.

Well, I've just had lamb chop and some potatoes and a piece of banana bread because I'm going fully, fully outback Australian style food in this house.

Well, you're right.

It has been a couple of weeks since we recorded a News and Views episode.

So let's get into it because there has been a lot happening and yeah, we've got plenty to cover.

What should we do first?

Should we do Senator Bragg back at it?

Is he one of the parliamentary friends of Super?

I don't think so.

I don't think gets him in the.

Yeah, I don't, I don't think he is.

I reckon he'd get struck down by lightning at the doorway.

What's the opportunity?

What has he said?

Oh, he had.

He went on a big rant today about how super is ruining everything for everybody and it's ruining the retirement system and no one's got any more money.

In fact, they've all got less money because of super and woe is me.

And I don't know, what else did he have to say?

It's pretty good.

Well, I do think that the reduction in the liability of the aged pension system hasn't really kicked in yet.

It doesn't seem like it's going down.

We're 30 something years into superannuation.

We're hoping any day now that retirees are relying less on the age pension than before.

At the margins.

There's lots of people retiring who are playing games with, you know, donating money to their kids five years before they retire and stuffing as much money as they can into their primary place of residence.

So that, that's not.

It's the Australian way, Neil.

Well, some of that just grinds my gears.

I'm looking forward to the government including the primary place of residence in the asset test.

I think it should count.

I think we're paying far too many multimillionaires aged pension because those multi millions are all locked up in their home.

Yes, I couldn't agree more.

Just back on the stats because you know me and I love a stat quote from the article.

Australia's public pension spending currently sits at 2.3% of GDP, down from 2.8 in 1994 to 95 despite an aging population.

Want to guess what the OECD average is?

That's pretty good then.

If it's only 3%, I reckon in most other countries it's probably got closer to 3 or 4.

The OECD average is 9%.

Yeah, yeah.

Okay, so we are very significantly ahead.

Right.

Sorry Brad.

I like the fact that he isn't a parliamentary friend of super and he does like to hold the system to account.

He has slightly contrarian views to most others and pokes holes where holes need to be poked, I reckon.

Yes, I agree.

You can't have everyone just running around patting each other on the back about how amazing we are.

And occasionally he does have something useful to say.

But this morning he just hadn't had his coffee yet.

He called compulsory super one of the biggest public policy failures since Federation.

Well, there's another senator weighing in on the argument as well.

Pauline Hanson says the system is broken.

And oh, the one and only.

How do you feel about governments?

I think the Liberals had a policy as well about allowing people to access super for a home deposit as well.

Home ownership is important, especially as you reach retirement.

We all know that retirees who own their own home have a far better lifestyle and stronger, healthier retirement because of that.

Indeed.

Should we be letting people tap into their super to buy a house?

We already have the first home super saver scheme which is.

Yeah, it doesn't get you very far though.

50K is nowhere near close to the deposit that you need.

Look, the problem is housing is a supply side issue, not a demand issue.

We don't have enough housing.

And all that happens if you pump more money in the system by letting people use their super is it pushes up demand even further.

But still does nothing on the supply side.

I do think there's a part to play for super as an infrastructure investor to put money in to housing and I wish to God we had better multi generational housing and all the things that those old people who were sitting on a bucket load of money, the problem is they would sell it and downsize into a one level three or four bedroom apartment.

Most of them would actually not most, many would really like to do that.

The problem is there are no one level three or four bedroom apartments in Australia or hardly any.

So there's nothing for them to downsize into.

So I think, I'm not saying funds getting into buy to rent schemes and other things to relieve the pressure and that's a good thing.

Probably a best member's financial interest passes on worst tax.

So yeah, I'd like to see funds to do that.

I'd say the average member, they're a little bit suspicious of government influence on how their funds invest.

Yeah, fair enough.

Cry over Australian super who announced a massive investment in India.

Right as Prime Minister Modi came to visit Australia and that was just far too coincidental in terms of timing.

India is a huge, huge developing market,.

The most populous country in the world.

Now more people than China.

Makes absolute sense that Australian super funds are finding good investment opportunities in India.

Is that government meddling?

I don't know.

No.

I suspect all sorts of treasurers and prime ministers have tried to influence how funds invest their money, how successful they are doing that.

I don't think there's much evidence they are.

I really don't think there is either.

Look, there's certainly evidence on a global scale of meddling.

In the UK for instance, now pension funds, which is equivalent to our super funds of course.

Do you have to put x percent into local infrastructure investments or something?

There's some rules there.

Yeah, yeah.

Fairly recent.

In order to try and sort of rebuild their economy.

So it's not without precedent for governments to do that sort of thing.

I really don't see that happening in Australia.

We tend to not not go in for that sort of carry on.

Also we haven't trashed our economy to the point where we're looking for options like that.

No, no, I think not yet anyway.

The chances of Australia pulling up Brexit are fairly slim.

Yeah, exactly.

Although that's my, one of my favorite.

All my jokes are terrible.

My joke about Western Australia, where I come from, I moved to Sydney 20 years ago, is that WA has already seceded and run their own separate country.

It's just that no one over here.

Well, let's not go into WA politics and the distribution and all the fun that comes with that.

Let's move on and talk.

One of my favorite topics, the compensation scheme of last resort.

I thought it was over.

I thought we'd agreed how it was going to be and then it's blown way out.

The compensation scheme of last resort cannot possibly pay for all the claims against it, mostly because of the.

Well, almost entirely because of the Shield and First Guardian debacle.

Yep.

What's the latest round of proposals there?

Well, our good mate, assistant treasurer Dan Molino.

Do we have to call him Daniel?

I haven't met him in person.

Maybe we have to.

I'm going to call him Dan.

Sorry.

Dan is consulting on a three tier waterfall levy that would have different parts of the industry paying sort of different amounts, which would include SMSFs, which I do think is a good idea.

As we've discussed before, there shouldn't be a compensation scheme of last resort.

The whole idea is bloody stupid.

But since we've got one and it's not going away, I'm sorry, but everyone's going to have to contribute.

Oh, so you would abandon the cslr, have investors compensated by general government revenues and then some kind of.

Well, there already is a levy on most financial services.

Organisations trick that levy in order to fund that general revenue.

Yeah, yeah, yeah.

I think we don't have a compensation scheme.

We don't have the similar sort of thing in medical for instance, or in other things if there was.

We have other methods of dealing with these sort of issues.

The government maintains its own reinsurance for things like, as I understand it, for things like floods and other major disasters.

But if we're going to have one, I'm sorry, team, you all have to play, including everyone who's got a self managed super, who Lord knows, more likely to need to call on it than anyone else.

Yes, we talked about how we'd limit the rollover to SMSFs and require trustees to have a bit more financial education or some kind of accountant certification, just like you have for wholesale investments.

Yeah, there's all sorts of again still going on on SMSFs.

Where do we land on cracking down on advertising in financial services and lead generation?

Have any of those discussions come to fruition yet or is any legislation on the cards?

We'll have to invite Diane on to talk about it, I reckon.

Sounds like a plan.

I think it came into effect more with a whisper than a bang, as they say.

I'm sure the companies that it does in fact.

Employment.

Employment hero, I think.

And other ones like that.

I'm sure they're particularly unimpressed, but.

Oh, that was, that was more just about promoting funds.

Whenever people change employers or onboard to a new employer, it's the folks who are running shady ads on Facebook that I'm.

I want, I want knocked out of business.

Oh yeah, yeah, totally.

Look, ASIC has been much better at going after people who are doing the wrong thing.

Finally after everyone shouting about it for the.

Well, I'm sure a very long time at least the 25 years I've been playing this game, they find bad actors.

$830 Million last year.

Yeah, I could fund the CSY.

Yeah, I know, right?

Yeah, yeah, yeah.

So they are actually taking action because their position always was, well if you don't have an AFSL then you're not in our remit so we can't do anything about it.

Yeah, it's like.

But, but, but that's the whole.

In other news, Sarah, we are.

What are we halfway through September and that means we're about 10 weeks into payday super, how's it going?

What have you heard?

Well, not much to be honest.

Although there was those couple of jazz festivals that apparently died because Payday super killed them.

Yeah, I saw this.

What do you reckon?

I cannot fathom.

As someone who is a musician myself and I have organised a fairly large classical music festival when I was in my early 20s because I didn't know enough to know that I was too young to do it.

There is no way that you would stop the thing that you are most passionate about because you are going to have an issue with your ato.

Like what on earth.

The Newcastle Hunter Jazz festival cancelled after 36 years.

Talk about passion for jazz.

Wow, that's amazing.

Six weeks out they canceled the festival.

The Inverlock Jazz Festival also canceled.

Both citing new superannuation laws.

There's hundreds of musicians play at these things.

They probably all receive some small amount of compensation.

They're probably all organized as independent contractors and the law says that clients are responsible for paying super on behalf of their contractors, which I don't agree with.

But we'll come back to that because they officially employees.

That's why.

I think it's shocking.

You know I feel for the organizers who had to do a lot of paperwork to collect all the bank details, all the super details.

But the fact that they've been running for 36 years and they're acting like they've never done it before.

Yes, yes, that is unfortunately, and I don't know anything about the Newcastle Hunter Jazz Festival, but unfortunately it is the case that in the arts, underpayment, non payment, dodgy payment, not paying till proper award wages is incredibly common.

I don't know.

So you write to all your musicians, you say when you invoice us, fill.

In this form or we're not paying you any money.

We need your bank details, we need your superannuation funds, USI and your member number.

And the agreed rate is X per hour.

You're scheduled to play for eight hours.

Da da da, done.

And then the invoice.

Yeah, exactly.

Or the timesheet comes in and you do a vendor invoice.

Yeah.

Now they'll probably need an arrangement with a clearinghouse but you know, that's all perfectly doable.

Well, they could just use Xero like everyone else with Alpha Brain does.

I have heard from bookkeepers and things that paying contractors super is really tough because a lot of contractors,.

They don't.

Think much about their super and they don't provide their superannuation details to their clients even when asked.

Yeah, I'm sure it is more of a widespread issue.

I mean it's an interesting question, isn't it?

As obviously a participant in the super system, but also as a business owner, when I employ people, some people would prefer to be paid as a contractor and some people don't really care either way.

But I will always try and pay people using payguard because it's much more straightforward and it makes sense and they are an employee.

I think if someone, if someone is an employee in that you are requiring to turn them up for the set hours that you determine and to do the thing that you've told them to do, then they're an employee and you should pay them as an employee.

Whenever I run my business, we had two types of contractor.

One was a casual and they just came and went whenever we needed them, whenever they wanted to work and we just treated them.

We took all the liability like they're an employee.

They are and we paid them way above award and that included their super and everything else.

Or we're organized as a proprietary limited company and you invoiced us business to business and you took care of all your own insurance, all your own super and payroll and we didn't have any of these people in the middle who are just an ABN holder who are set up in their own business, sole trader arrangement because the liability was never clear.

The insurance arrangements, the workers comp, everything was just a bit too gray.

And it was just too hard.

So.

Yes, couldn't agree more.

I'm very sad that the festival's been cancelled.

I do find it kind of stunning that they've let something to do with tax and super kill their whole.

But you know, having said that, this is the only bit of bad news that's come out of Payday super that I'm aware of.

I have heard.

Can I name the super fund, Art?

Yeah, yeah, go on.

Art has issued some statements to its members saying really sorry that we're having problems, allegedly.

I've seen screenshots of their communication.

So you're having trouble allocating funds to members accounts right now because of the unexpectedly high volumes, which is bizarre that three or four years notice wasn't enough to get ready.

But wait till Maureen daily Surprise.

Yeah.

So come on, Art, hopefully your backlog is sorted out by nine every.

Everybody's getting their super on time.

Because I've heard lots of great reports from members saying, yeah, it's amazing.

I'm getting paid within a couple of days.

It's in my account.

My employer runs payroll and the money lands my bank account for my salary and in my super account for my superannuation contributions within a couple of days of each other.

I know it is great.

And as an employer who actually is reasonably organized because I have great people around me, just to be clear, it's really not changed very much for us.

There's a couple of extra steps that Deb, who's our business manager has to do each fortnight and that's that.

And it all just happens because we use zero.

So yes, people are not taking responsibility for doing it.

Yeah, I don't have a lot of sympathy.

You know what I'm like.

I'm pretty light on the sympathy front though in a lot of cases.

Your sympathy has a genetic defect.

You were just born in one sympathetic chromosome.

Yeah, not many.

Well, after we had Xavier from Super Consumers Australia on recently with their report has gone out and there's been quite a bit of coverage of that coverage.

Oh, there's so much backlash.

I'm getting whiplash.

Yeah, well, like do better.

Speaking of lack of sympathy.

So Australian super said that SCA kind of benchmarking work was done right in the middle of their transition from one contact center provider to another.

They apologized for not being able to answer all the calls, but so they're now answering all calls within two minutes or 90% of calls, which is good.

Yeah, sometimes it's just a bad luck.

And these things are done even during a Transition like that, there's no excuse for not answering the call within 15 minutes.

No, no, there really isn't.

And interestingly, it is being seen at the other end of the scale too, because AFCA complaints are going back up again.

Quite significantly, actually.

I so want things to be better, Neil.

Well, they're going to be better, Sarah, because your friend Dan has confirmed that the government response is coming out any day now.

There's going to be new legislative minimum service standards, including insurance specific rules as well.

So we're looking forward to those being published soon and you'll hear about that on the next episode of that super show.

Yes, yes, we will definitely, definitely cover that.

I have to say I'm nervous about what those are going to look like because you're getting a bunch of people who are not the people in the super funds writing up the rules for how a different bunch of people should be doing things.

Yeah, interesting.

I wonder what they're going to look to other industries for inspiration.

As Xavier mentioned that in other sectors there are minimum standards for customer service as well.

So whether we look at, you know, telcos, utilities or others.

Yep.

Not that any of those are good examples.

Let's not copy how airlines handle customer.

Service, for example, or telcos.

Oh my God.

For anybody, really.

Yeah, well, I know, I think, I mean, maybe this is the fundamental problem, right.

Maybe our expectations are just completely off the, off the reservation as to what actually is reasonable.

Maybe we shouldn't think so, Sarah.

I think, you know, somebody answering the phone within 15 minutes and being able to answer some basic questions like a human.

When I had my daughter, one of my friends who has three children who are older than my kid, she said to me, the key to successful parenting, Sarah, is to lower your expectations until they are met.

Oh dear.

And maybe, maybe that's the key to successful super is to lower one's expectations until they are met.

Unlike many other industries, I think they're in a really tough spot because a lot of members don't care about service standards.

They don't select funds based on service standards and in many cases they don't want admin fees to go up in order to provide better service standards either.

So.

I know, but I don't think people really.

I actually don't think the average punter knows even what they're paying in terms of admin fees on their, on their super.

And what they would think is a reasonable amount of money to pay.

I did see something recently that Aussie Super.

Recently someone was telling me this is probably completely Wrong.

That Aussie super had put their admin fees up.

They have indeed.

Yeah.

The biggest fund in the country is raising their admin fees and there is speculation.

So let's get into the Australian super story.

So they've.

I don't know if they've announced it.

Well, no, they kind of have because Michelle.

No, they have.

It's on there.

It's on their website.

I'm looking at it right now.

So they set up a new entity, Australian Super Advice.

One of the non tech directors is Michelle Levy of Quality Advice Review the Levy report and they're making big investments.

He's a very nice person too.

So yeah, admin fees have got to pay for it.

We'll.

We'll see.

What are you working on?

There will be an increase in the asset based fee cap for accumulation accounts from 350 to 600 a year.

A change we expect will affect about 7% of ACUM members who are currently at the 350 billion.

I thought they'd also put up the admin fee as well.

Yeah, and the admin fee has gone up from 0.1% to 0.12%.

So 20% increase, Neil.

So they have a percentage based admin fee.

Okay.

I thought they were flat fee and they got all the other big industry.

No, it is flat fee.

So admin fees will increase by about.

By up to $1.83 per week.

Why do they do weekly admin fees?

It's nonsense.

Oh well apparently.

Apparently that is historical or hysterical depending how you're looking at it.

Because it's all based on the idea of a dollar a week, so.

But everything else is done annually.

So it just makes it horrible to compare.

You've got to multiply $1.83 by 52 to arrive at $95.69.

That's right.

And then when you're writing the PDSs for these people, not for Aussie super but for other big ones as I have, you have to have this whole palava because fees are often.

Or the fund I was doing it with deducted monthly.

So you have to have this whole palava about.

What do you do if there's five Fridays in a month, Neil?

Five instead of four.

So then all your, all your calcs and everything have to have all these asterisks everywhere to include the five week month as well as the four week month.

It's very complicated.

So there are some industry funds charging 50 something dollars a year, 70 something dollars a year.

Australian Supers now 95 dollars a year.

Plus a percentage based admin fee.

Plus an investment fee.

Yeah, this is getting into the realms of reasonable amount of money.

They're expanding internationally.

They have a new advice offering they're going to invest in as well.

So lots going on at Australian Super.

I hope it all pays off for its members.

Yes, me too.

I mean, like at the end of the day they are such tiny amounts really, compared to what the actual amount of money people retire with and the difference it makes.

True.

But as a system, we're still way more expensive than the equivalent systems in the uk, in the Netherlands, in Germany, in the us so it might not be a huge amount of money in real terms or even in percentage terms, but comparably it's a lot more expensive than the retirement systems in other countries.

I wonder why that is.

We should try and find someone who can actually explain it properly.

I think it's all the extra obligations that are put upon Australian countries.

The requirement to provide insurance, the requirement to provide member service standards shortly, the hardship claims, compassionate grounds claims, all of those kinds of things cost money to run.

They do.

But surely they have a lot of those in other places.

Yeah, well, I certainly don't think you get much of that.

Some of the, what I would call the paternalistic aspects of Australians superannuation system don't exist in other countries.

But they also have retirement products and they also have advice and they also have other things that they pay for.

Yeah, yeah, yeah.

Interesting.

All right.

If someone wants to write a paper on it, we'd love them to probably.

Drag somebody onto the show who's an expert in comparable retirement systems and we can do some analysis and comparisons.

Yes, yes.

If anyone knows anyone, please send them our way.

Oh, here's another one.

Connexus Institute.

David Bell and Jeff Warren are saying the system is on an inexorable path.

Love a big word.

To roughly 10 funds holding 90% of the assets.

Oh, okay.

I know.

Well, I think I. I think they're probably right, but I think there'll still be a proliferation of little ones.

But.

So I don't think you and I have had a chance to discuss the most recent announcement, which is the memorandum of understanding between prime super and Aware Super.

No, we haven't.

We haven't.

And I've been reflecting.

Another one bites the task.

I've been reflecting on that one because like you pointed out, there's not a lot in it for the members of Aware super to have.

No, there really isn't.

40,000 Folks at prime super come and join them.

So how is it, how can the Aware super board try and demonstrate to their members that it's in their best financial interests to let these other folks.

In and, yeah, best financial interests on the larger fund side, you really have to get out the Excel spreadsheet wizardry to make that make sense, I suspect.

But at the same time, I think it's going to happen.

All these mergers, nobody's going to object.

I don't think the government objects and that objects.

So it's inexorable.

No, you might say, yes, I think.

Yes.

I think they absolutely do not object.

I do think though, that whole fundamental thing of less funds is good.

It's good if you are the regulator or a regulator that has to deal with them because there's literally less teams of people to deal with.

But as to whether it actually gets better outcomes for members and a more stable system in the longer term, I really don't know.

I mean, you only have to look at supermarkets like Coles and Woolies to see who's making a lot of money there and it sure as hell ain't the person buying.

No, I was going to say, I'm thinking about Australia's other big markets.

Airlines.

We need more than two, please.

Supermarket.

Exactly.

Two, please.

Banks, we need more than four.

Thanks so much.

Super.

Limited funds.

We like our choices.

Thank you very much.

Yeah, I really think we do.

I think it would be a terrible shame if we ended up with only a small handful.

I would love to see them specialize.

Okay.

You know, Prime Super.

Yes.

Oh, they had some.

A lot of agricultural workers and a lot of regional workers.

So there was some focus there.

Obviously that's going to get lost inside.

Aware.

Super.

The bigger funds, Aware Art, Australian, super, they're serving everybody.

They're not specialising in any particular sector of the market.

No, no, they really aren't.

And they become like the banks.

Right.

They're just the thing for everybody, rather than specialised.

I mean, that is the thing about some of the smaller funds, boutique funds, is they really do focus on one particular group of people.

And I actually think that really does help keep costs down in those funds because they're very, very tailored to a specific group of people.

And so you're not trying to be everything to everyone and it does make a big difference to the overall cost to serve historically.

So, yeah, there's definitely room in the market for specialist funds to attract a certain type of member at a certain stage of life.

There is, interestingly, the ones that focus on younger people, of which there have been many Attempts or want to try and use their brand name to get a lot of people.

There was Virgin super at one point, like Virgin Airlines that crashed and burned.

I guess that's why when they're focused around a particular industry, it tends to work much, much better.

Because, I mean, super is part of your employment set up more than anything else, really.

And then it's supposed to replace you and replace you in your salary when you retire, which is a whole other thing.

Then that sort of makes it clear where it could line up, which I guess even for some of the bigger funds, the very big funds like Hester, for instance, is very focused on women.

Most of their members are women.

Most of their members have very low balances.

And so that actually does, for them, give them a very specific set of challenges that their members are facing that they are able to focus on.

I like Hess's approach because they can then advocate on issues that affect their members more than others.

So I'm this Super maternity leave and those kinds of things.

Absolutely, yeah.

They can champion those causes on behalf of the members because they know exactly the issues that matter most of them.

Yeah.

Although here's an interesting Hester thing.

So Hester's always been big in the ESG side of things.

Hester hosted a Women in super event last week, week before, in Melbourne on AI, which Katie from my team went to with one of our colleagues, and they have just today advertised for an AI specialist to lead AI work internally.

So my question is AI chewing up as it does so much water and, you know, not being great for the environment, yada, yada, yada.

I do wonder how they are, how they are seeing that internally.

Personally, I think the water use is a myth.

Modern data centers don't consume that much water.

Used to be they used evaporation, so they would draw lots of water from the system and then just evaporated off the roof to cool down the servers.

Water is too expensive and too much of precious resource and too restricted in too many places that you can't do that.

So they use modern closed systems to do it.

It still gets the water up.

And they've got a problem of putting hot water back into the lake or into the stream.

But it's all right.

The fish have three heads.

No one consume a lot of water.

They do consume a heck of a lot of power, though.

And I like the idea of data center operators being made responsible for building generation equivalent to the consumption that they drop on.

So whether that's paying for solar farms or wind farms.

Yeah.

These days That's a lot of solar farms, isn't it?

Yeah.

Making sure that they contribute to the capacity of the grid as much as they draw from it.

Yeah.

I think we're shooting ourselves in the foot if we try and say, no data centers in Australia, please, because other countries will just race ahead and we'll be left behind.

And we do have large swathes of not much in this country.

A lot of the folks that object to data centers in their backyard can be found agitating on Facebook, which is, you know, run in data centers.

So if you object to data centers, make sure you don't connect to the Internet.

All right, all right, what have we got to finish up with?

Oh, here's an interesting one.

Since the 2019 protecting your super pys reforms, death cover membership is down 36%.

While, of course, claims are going up and people.

It's starting to be the case that apparently reinsurers are starting to withdraw support.

Income protection claims are forecast to rise 20%.

Mental health claims are averaging 24 weeks and PTSD 50 weeks.

So to summarise, the consumer protection was supposed to do a good thing for people, but all it's done is shrank the number of people that are paying for insurance and is now with premiums going up for those who stayed.

It's not a great.

Not a great situation.

Yeah.

Anyway, so that's a fun secondary outcome of the government making changes that are supposed to benefit everyone in Super.

So back to my earlier comment about service standards.

So let's unpick that a little bit, because the default cover that almost everybody had up until the reforms was really just death cover, maybe TPD as well.

Income protection.

Yeah, it was basically death and tpd.

Yeah.

And so death and TPD are not affected by rising mental health claims.

Tpd, is it?

Yeah, yeah, yeah, yeah.

Heaps of people.

You can be temporarily disabled by a mental health issue.

No, you're permanently disabled.

And unfortunately, jokes aside.

So if you don't have income protection and you are severely mentally disabled, you are able to.

Well, even if you do have it, but a lot of people only have tpd, you can try and claim on tpd and the standard line is, if you don't have a mental health issue going into a TPD claim, you sure as hell will by the end of it, whether going in, it's physical or mental, because you have to get a whole bunch of people to sign off over and over again to say you are totally and permanently disabled and cannot contribute to society.

Wow.

Yeah, yeah.

And it's it's the.

I mean, obviously the numbers are very, very small, but the percentages are coming up fast in young people claiming tpd.

So there's a number of issues with that.

One, of course, is just that's awful.

Two, that it's potentially putting a big label on them for the rest of their life.

And three, if they do recover, which I'm sure happens a fair percentage of the time, they will never be able to get TPD later on or potentially life insurance later on.

So, yep, it's.

Yeah, it's a multiple set of.

Set of flow on effects.

Yeah.

The stories I've heard are a lot of folks who are stressed at the job, they work in a really toxic environment, they want to quit or they are.

They have quit and they can't possibly even work their notice period.

So they go to their GP and say, look, just.

It's become super toxic now that I've quit, I can't even work my notice.

I've got two weeks holiday or two weeks sick leave.

Can you write me a sick notice?

I'm too stressed to go back.

And.

Yep, just a lot of people put in those situations.

I bet you their income protection provider doesn't know about that circumstance, although that person's not at high risk of a mental health injury because they're obviously too sick to work.

We're getting all.

Just a huge number of claims and the system can't bear it.

Maybe there needs to be a income protection policy that includes mental health and an income protection policy that excludes mental health.

But then I guess all the folks who are mentally robust can choose to opt out of the cupboard, drive up the cost of premiums to everybody who's.

Who's not.

Yeah, yeah, yeah, that's, that's.

I think that's where it all gets terribly difficult too.

And the other thing that's actually happened is workers compensation now doesn't cover bullying in New South Wales, I believe.

And so again, that's putting more pressure on, on the insurance system to then take on the.

Take on the.

Trying to sort it out.

I think this for me just comes back to the fundamental thing, though, of, you know, as a society, if we're.

If we've got so many people who are struggling so, so much mentally, what are we doing to improve workplaces and improve society so that less people are in that mess?

The realms that we play in with.

Super.

Super is a.

Is a beautiful thing and we're very lucky in Australia to have it and it makes people's retirements better for nearly everybody who's worked during their, you know, been in paid work, their retirement will be better because of Super.

It might not be amazingly better, it might only be buying a new caravan better, or it might be amazingly better, but it will still be better than it would be otherwise.

And it would be great if we could just sort out some of the earlier in life stuff too, like housing and mental health, which seem to get talked about a lot but not much done about.

Very good, Sarah.

And I think that must be all we have time for.

We've covered a huge amount today.

We have.

So if everybody listening, come and join us.

Find us at that super show.

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We'll see you next time.

Thanks, Neil.

Super show.

Bye for now.

Sounds good.

Ciao.

Ciao.

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