Our security in Australia appears to have come under assault from many quarters in the past six months. First, Bali. Then the drought and the bushfires. Then Iraq and the fridge magnet. Then the nest-eggs of the baby-boomers appeared to crack as superannuation funds faltered. And more recently, financial advisers, on whom so many rely to build security in retirement, are revealed as a group to be largely incompetent or dishonest.
We are physically threatened from without — threatened by nature even into our homes, and our financial security is imperilled.
How do we get a return to security?
It might first be worth assessing the security threats more realistically. Then it might be worth looking at some of the things which make life in Australia secure. And you might well conclude that we have been lulled into a false sense of insecurity.
Bali. It was an horrific event. Eighty-eight Australians were killed. It was history’s worst terrorist attack on Australians. But it was three weeks’ road toll. Leaving aside the degree of criminality and looking at it from the point of view of the security of an average Australian, death by terrorism overseas is a very remote possibility. Death by terrorism in Australia is even more remote. There has never been a hijacking in Australia. There has not been a significant act of terrorism since the Hilton bomb killed three people 25 years ago.
Iraq. Saddam Hussein is an evil, ruthless despot who kills and tortures his own people, but Iraq poses little threat to Australia or Australians — other than to those who go deliberately, or are sent deliberately into the firing line, and even then it is nowhere near the scale of Vietnam. For more than 20 years Iraq has not used or passed on its weapons of mass destruction. It is a non-threat to Australians’ security. Yet we have a letter from the Prime Minister complete with fridge magnet to heighten our false sense of insecurity.
The drought. The drought is tragic for individual farmers and rural communities. But others in Australia face similar financial hardships. The drought does not pose a huge threat to the financial security of the average Australian. In a good year, agriculture produces about $30 billion out of a GDP of $700 billion. The drought has sliced a third of agricultural output, or about 1 per cent of GDP. Awful for those affected, but not a huge threat to financial security.
The bushfires. The jurisdiction worst affected is the ACT. There has been a lot of heartache, four deaths and several hundred injured. But looking to the future and to future physical security, the likelihood of a repeat is extremely remote. The ACT has lost about $250 million. That is about 2.5 per cent of gross state product – a set back of a year’s economic growth. It should not profoundly affect the financial security of the average Canberran.
I do not want to underestimate the profound agony these events have caused some people, but we should not over-estimate their effect on the physical and financial well-being of the broad mass of Australians in the future. We should not allow our absorption of the mass media coverage of them to warp our view of our security in the world.
Superannuation. The baby-boomers were aghast at superannuation performance figures that were summarised a week ago. Earlier projections of retirements of comfort and ease have been dashed. Many funds have had negative returns. Money would be better kept under the bed, not because the commies or a Labor Government is coming (Hawke, Fraser 1983), but because the markets have crashed and the super fund managers have proved just average.
Nonetheless, the fact is that more Australians have more superannuation than ever before. The Association of Superannuation Funds of Australia is probably right when it says super is taxed too much and average contributions are too low. But huge gains in retirement financial security have been made since the Keating Government introduced the superannuation guarantee levy (about the best thing it ever did).
Financial advisers. This week we learned from an Australian Securities Investment Commission and Australian Consumers Association survey that the majority of financial advisers were average, poor, incompetent or dishonest. Clearly ASIC has a job ahead. But we should be so lucky that five million Australians are potentially wealthy enough to engage some 16,000 financial planners to help with investments of $630 billion. That should indicate a fair level of security unless you take the Bob Dylan view that if you ain’t got nothing you got nothing to lose.
When you look at the above “threats” to security, President Franklin Roosevelt statement that “the only thing we have to fear is fear itself’’applies to our generation more than his.
Roosevelt’s generation had real security threats — a Great Depression with a third unemployed and a looming war against totalitarianism that would cost perhaps 30 million lives and hardly a person on earth not directly affected.
So here we are in Canberra and Australia with the threat of mutually assured nuclear destruction gone; a welfare safety net of $40 billion; Medicare (though not perfect) attending all serious cases; the road toll halved since the 1970s; the murder rate falling; interest rates and the currency stable; life expectancy of 78.3 (male) and 82.3 (female) among the highest in the world; infant mortality of 4.2 per 1000 – among the lowest in the world; no-one listed as dying of starvation in the Australian Yearbook; share ownership the highest in the world; and a huge shift from factory and labour-intensive drudgery to cleaner more knowledge-based industries in the past three decades. Sure, there is more casualisation and part-time work, but unemployment is the lowest for 25 years. The political and legal systems are sound and free of serious corruption, even if some of the practitioners are dullards and the administration sometimes costly and cumbersome.
In all, on a world and historic scale, we live in good times, despite the false state of insecurity that we are allowing ourselves to be lulled into.