The list of failures continues to grow, the list of official bodies too weak, too chummy, too lacking fire-in-the-belly to help the millions of Australians unknowingly stuck in under-performing superannuation funds.

The appalling track record of the gormless Australian Securities and Investments Commission is legendary.

The Australian Prudential Regulation Authority was exposed in the royal commission last weekas being extraordinarily negligent, incapable of doing its job, sitting on its hands and looking out the window instead of using its powers to end malfeasance.

The government itself, until embarrassed by the royal commission, notoriously favoured the worst elements of the superannuation system and tried to prevent rudimentary reforms of the wealth management industry.

Now add to that list the Productivity Commission a body that used to be regarded as the honest voice of policy reason among the noise of politics.

But when it comes to holding slack superannuation funds to account, the PC, along with ASIC and APRA, turns pussycat and treads softly.

Oh, the PCs superannuation report in Maygenerated headlines, blowing up the default super system according to the Australian Financial Review. Well, probably not.

What the PC certainly didnt do is use the power it has to force those with their fingers in the $2.6 trillion lolly jar to disgorge the information they would prefer to keep secret.

As the commissions report stated: Questions [to super funds] focused on related party transactions in the Commissions survey of funds received disconcertingly low response rates.

So what did the PC do about that? Nothing beyond recording the fact that the super funds had pretty much ignored the PCs questions. As any hack journalist could tell the commission, when an organisation pointedly ignores your questions, its a safe bet they have something to hide.

The PCs lame note-to-self caught the eye and ire of former PC economist and present CEO of Lateral Economics, Nicholas Gruen. Dr Gruen asked on Twitter why the PC hadntused its Section 48 discovery powers. He kindly provided the relevant wording from the Productivity Commission Act.

Turns out you can be jailed for six months if you dont give the commission the information or documents it requests an excellent means of gaining someones attention, I would have thought.

Let me put this in a little context. The commission wasnt inquiring into some arcane branch of protectionist theory, but the very real inefficiencies, abuse of trust and theft of money that has been occurring in parts of the superannuation industry. When it stumbled on something very suspicious, it made a diary note and ignored it.

Its been left to the Ken Hayne royal commission to drag out examples of egregious related-party transactions when the PC had the ability to force the whole industry to fess up. Nah, too hard.

Dr Gruen has gone further in a stinging article he wrote for_The Mandarin_: Behind the theatre of arms-length objective inquiry, theres always been a rich back-channel to the movers and shakers in the central agencies and their political masters. Indeed, when I was on the Commission this sometimes made Commission meetings confusing because the Chair sometimes abetted by the Executive Commissioner (the Deputy Chair in the current structure) and the Head of Office, would suddenly close down a line of argument for reasons that didnt really make sense.Id figure out later that the argument was inconvenient to a direction theyd determined in consultation with the Treasurer or the Treasury. This doesnt mean the PC simply does what its told, but theyre invariably in close touch on the shaping of any important report.

The finance inquiry seems to have been unusually influenced by the back-channel. The report on finance (which excludes super) offers some fairly scathing comments about lack of competition in banking and financial advice but pretty tame remediesfor doing much about it. However its report on superannuation seems more ambitious, at least when one considers the governments priors which are to not let the industry funds go unpunished for embarrassing the retail funds with their superior returns.

These are very serious allegations by one of Australias leading economists, someone with a respected track record in government. To paraphrase, I think hes saying the Treasurer and Treasury are quietly nobbling the Productivity Commission, ASIC and APRA.

Dr Gruen made his own submission to the PC superannuation inquiry, a submission that got short shrift. While the PC recommended a collection of best-of-breed managers to act as default funds for superannuation, Dr Gruen believes the government itself would be best placed for that role.

He uses an appealing analogy between health care and wealth management.

The moreI think of finance, the moreI think of health where in every country other than the US theres an informed purchaser of expert services keeping costs down and quality acceptable, he told me.

Whereyou dont have that, prices go through the roof whilst quality can often decline with over-servicingfor everyone except those in the know. Same in finance except that in finance, as weve seen, over-servicing oftentakes the form ofno service whatsoever.

The idea that we want to empower everyone to be their own consumer of sophisticated financial services is not only wrong-headed. Just chat to the next personyou meet in the street andyoull understand its one of those ideas that Orwell said was so absurd that only an intellectual could believe them.Its cruel and immoral.

Only 60 per cent ofAustralians describe themselves as comfortable in managing their money, and theyre talking about basic budgeting, not choosing between sophisticated investment offered by professionals working as salespeople who ply their wares as government licensed advisers.

It produces entirely avoidable disasters. We dont do it for health, do we? We just givepeople the _option_to manage thingstheirway.

Economics used to be what I call clarified common sense. Today its practitioners who spend most oftheir time staving off common sense.

This article was published by The New Daily on the 21st of August 2018. It was written by contributing editor Michael Pascoe.