Superannuation, the ultimate government cash cow?

[Cam019]

Do you have any idea, how much pension money is in the market? and how much effect it will have if it's removed?

According to this, about 361.1 billion dollars, excluding SMSF and small APRA-regulated funds.

 

[Smurf1976]

Why would the money be removed and if it was removed where would it then be invested?

I'm not suggesting it would all be removed.

But if Australian shares have attracted x$ of investment under current circumstances then it stands to reason that if policy changes in a way that makes holding shares less attractive, at least some individuals will choose to hold less shares than they otherwise would have.

Same with anything. Make it less attractive and those already in a marginal situation (and there's always someone) will find that enough to tip the balance.

Less demand for shares = lower share prices than would otherwise have been the case.

As for what it would be invested in, the answer is "anything that isn't Australian shares". International shares, real estate, whatever.

Note that I'm not necessarily opposed to the idea, I haven't given it sufficient thought to have a firm view there, but I do have concerns about the impact on the market of such a change.

Between the various antics of Trump, things like Brexit and now this one could be excused for thinking that the world's governments are actually trying to start a market plunge.

 

[sptrawler]

The real problem here is, super when in retirement, makes your money last longer.
The reason is, when you draw a pension from your super, the amount increases as you get older.
At the moment, when most people retire, the draw down is 4%, which at the moment is way above bank interest.
So most retirees have their money in shares, which give about 4-5% + 1.5% franking credit, which in reality covers their minimum draw down and gives a buffer for when the compulsory increased drawdown kicks in.
Then when the drawdown increases, and inflation requires you to pull out more money anyway, you don't take as big a hit on your capital.
With the suggested changes, you may as well have the money outside super, and withdraw as much or as little as you like, to suit your lifestyle.
Rather than pay a superannuation company, to tell you to take out more and have them take out more.
There really isn't any benefit at all. It is dumb $hit.IMO

 

[sptrawler]

http://www.abc.net.au/news/2018-03-...money-if-labor-abolishes-cash-refunds/9544960

When you open that link, just look at Chris Bowens face, it tells you he doesn't give a toss. He gets a taxpayer funded, indexed pension, for the rest of his life, so suck it up. What a wanker

 

[Wysiwyg]

Labor will target more than 1 million Australian taxpayers who own shares in a $59 billion revenue push that would take its heaviest toll on retirees

I'm not suggesting it would all be removed.
But if Australian shares have attracted x$ of investment under current circumstances then it stands to reason that if policy changes in a way that makes holding shares less attractive, at least some individuals will choose to hold less shares than they otherwise would have.

Starting to look like a ploy to force open some piggy banks and loosen the purse strings of savvy retirees that aren't eroding their nest eggs. Coming from someone on $400,000 per year just rolls off the tongue so easy. Lol. Making people worse off financially is bad policy. Spread the word.

 

[sptrawler]

Labor will target more than 1 million Australian taxpayers who own shares in a $59 billion revenue push that would take its heaviest toll on retirees



Starting to look like a ploy to force open some piggy banks and loosen the purse strings of savvy retirees that aren't eroding their nest eggs. Coming from someone on $400,000 per year just rolls off the tongue so easy. Lol. Making people worse off financially is bad policy. Spread the word.

Jeez you're on $400k a year, well superannuation isn't an issue for you, well done.
I certainly don't have an issue with someone who has achieved a lot and done well, I wish all my kids had.
That is what we should be promoting, rather than failure is o.k, don't worry if you can't find a job, not everyone can. Just don't stress, do you want potato chips, while you play game boy?

 

[sptrawler]

I think Labors revelations call into question the purpose of superannuation, is it to supplement and support a better retirement, or to replace the pension?

 

[Wysiwyg]

Jeez you're on $400k a year, well superannuation isn't an issue for you, well done.

Lol. Not me, Billy 'Robin Hood' Shorten.

 

[sptrawler]

Yes it is funny, they don't don't have any trouble dishing out $hit to the plebs, but rise above it themselves.
I wonder how the fluck they can live with themselves, when they make such nasty decissions, without including themselves in the outcomes.
Maybe they were all just the school yard bullies, that didn't give a fluck about the kids they hurt.
Who knows but I certainly couldn't be a politician, I couldn't make decisions, that I wasn't prepared to wear myself.
So I would have been chucked out straight away.lol

Now if you save like $hit, sell the family home to put the money into super, so you could have a great retirement.
First Liberals come in and say that is capped at $1.6m, hey that's ok, I can work with that.
Now you get told, well get over it, your going to be really screwed over.
All you can earn is 4%, and you are going to have to draw more than that soon, also inflation will really kick you in the guts. lol
Super sucks.lol

 

[PZ99]

With the suggested changes, you may as well have the money outside super, and withdraw as much or as little as you like, to suit your lifestyle.
Rather than pay a superannuation company, to tell you to take out more and have them take out more.

That's the thing though. You're better off doing that now anyway if the best you can get is single figure % returns.

That's if you're lucky to even get access to it in the first place. Let's not forget it was the Liberal Party that raised the preservation age under Howard and under Abbott were planning to do it again.

Raising the pension access age to 70 is still Coalition policy today. Could you imagine having to work until 70 to not only get your pension but your super as well?

In addition they've frozen employer contributions to 9.5% which by now would have been 11% under the previous system. So people will now have less super to go on when they retire which means they will be a further burden on the taxpayer.

Super sucks because it was turned to $hit by the conservatives.

 

[PZ99]

No, to get a part pension for a married couple it is about $800k, so most will get there.IMO

If you only have $250k, it will be a full pension and yes there is no way I'd be leaving $250k in super.

If it is earning 4%, that's $10k it would be pointless, to have it in super. IMO
As can be seen by the actions of both major parties, it is perilous leaving money in super.
It is only a matter of time before they confiscate the taxable component.IMO

$800k is it? Well I'll miss out on tax welfare then. Which has always been my goal.

That makes me happy because I can't be shafted if I get nothing in the first place

 

[sptrawler]

$800k is it? Well I'll miss out on tax welfare then. Which has always been my goal.

That makes me happy because I can't be shafted if I get nothing in the first place

Yes, I think that is the best strategy, I adopted the same and it is working o.k.
It is just the constant changes to super, that does your head in.
I'm really thinking of an exit strategy, the only benefit super gives, is tax free earnings.
But this is really starting to become line ball, when you weigh up the risk, of adverse rulings being applied and the constant increase in drawdown regardless of earnings.
This becomes a reverse compounding effect, if the fund has shares and the dividends don't cover the drawdown, then some shares have to be sold.
I guess, it is all designed to close down SMSF, and get the plebs to pay stupid management fees, to retail and industry funds.

 

[Toyota Lexcen]

Seems to be a lot of confusion about the proposed Labor policy

Ignoring the pension or smsf

If I get 16k in dividends, i get 4K in frank credits which comes back as cheque as don’t work and never will

4K now just disappears? Anyone know what happens to it (have Labor given any indication on what happens to the credits)

A lot of reporting is talking about not paying tax

 

[galumay]

The 4K was company tax, instead of you getting it as a form of welfare, in a rebate, it will now stay with the ATO.

 

[sptrawler]

Seems to be a lot of confusion about the proposed Labor policy

Ignoring the pension or smsf

If I get 16k in dividends, i get 4K in frank credits which comes back as cheque as don’t work and never will

4K now just disappears? Anyone know what happens to it (have Labor given any indication on what happens to the credits)

A lot of reporting is talking about not paying tax

I think Gulamay, is right.
It will effect a lot of working people, who buy shares in the wife's name, which makes the franking credit cover the tax bill.
It will hurt a lot more people, than the media is saying.
It probably will have a flow on effect, with propping up property prices, as younger people decide to negative gear a property rather than buy shares.
The whole thing is a stupid over reaction, as is always the case, it is designed to have the wow and awe effect.
Then they tone it down and shaft you slowly.

 

[PZ99]

Lol. Not me, Billy 'Robin Hood' Shorten.

Billy is always robbing hood

 

[sptrawler]

Billy is always robbing hood

No, Billy is always looking after Billy, same as the rest of them.

 

[Smurf1976]

the only benefit super gives, is tax free earnings.
But this is really starting to become line ball, when you weigh up the risk

I’ve always taken an interest in how it’s invested but never added even one cent in voluntary contributions for that reason.

I just don’t trust that government won’t decide that I’ll have to work until I’m 100 etc.

That said, I’ve still ended up with roughly 20% of my total assets in super but that’s ebough for me.

 

[sptrawler]

I’ve always taken an interest in how it’s invested but never added even one cent in voluntary contributions for that reason.

I just don’t trust that government won’t decide that I’ll have to work until I’m 100 etc.

That said, I’ve still ended up with roughly 20% of my total assets in super but that’s ebough for me.

As has been shown by both parties, super is a playpen for them.
Why a younger person would put extra money into super, should qualify them for a brain scan.IMO
The only benefit in the super system, has always been the tax advantage, that is diminishing before our eyes.
I said a zillion years ago on this thread, while talking to Julia (not the red head), the Government will take over the super system to reduce the cost of pensions.

You won't have to work until you're a 100, but you will have to spend all your money in super, before you get any Government assistance.
Which is probably right, whether it is fair is another thing, what about people who come here in their 50's, they will probably qualify for a pension much earlier while putting in much less.
Well as Iuutzu would say, they tried, but unfortunately couldn't get here any earlier.

 

[sptrawler]

I've always wondered why, someone in Government, hasn't taken the moral high ground and said "what we are doing is wrong".
"Why should some of us have a lifetime indexed "tax free' pension, while we continually impose punitive measures on everyone else".
Then I wake up, as I've probably fallen out of bed, in shock.