Superannuation, the ultimate government cash cow?

[dyna]

$450 Billion was contributed to the $3.35 Trillion superannuation giant for fiscal year 30 June 2021.
28% of it has already found a home in overseas equities .Foreign assets to domestic ones now sit at about 20%. For the past 3 years, the dividend flow back to OZ has far exceeded the payout to foreigners who have shares in our stock market.
Downside to this though, is the interest paid out by government and aussie banks to foreign bond holders. Still, that overseas savings pot is only gonna get bigger over time and is sure to eventually give some heft to the $A .

 

[divs4ever]

$450 Billion was contributed to the $3.35 Trillion superannuation giant for fiscal year 30 June 2021.
28% of it has already found a home in overseas equities .Foreign assets to domestic ones now sit at about 20%. For the past 3 years, the dividend flow back to OZ has far exceeded the payout to foreigners who have shares in our stock market.
Downside to this though, is the interest paid out by government and aussie banks to foreign bond holders. Still, that overseas savings pot is only gonna get bigger over time and is sure to eventually give some heft to the $A .

you would think so , but currency rates are totally manipulated , and currencies backed by promises from an untrustworthy entity are essentially worthless

technically a currency is a monetized unit of productivity ( work done ) ... anyone see the problem now in the last year ( more currency issued but reduced productivity )

 

[Belli]

Not exactly about superannuation but the cash cow aspect is from an income insurance perspective in superannuation. This applies from today in super funds it seems.

Policies are subject to reassessment after 5 years. These changes will allow insurers to alter terms or decline cover after 5 years.

So it appears if a member is unable to work from, say, age 40, your income is for five years not until you reach 65, there is no automatic renewal after five years and the insurance company can change the T&C's.

Significant changes to Income Protection policies come into place from Friday, 1 October 2021 - Pitcher Partners

In the face of increasing losses and concerns of the financial sustainability of insurers, the Australian Prudential Regulation Authority (APRA) has required insurers to commit to several changes to income protection products as of October 1st, 2021.

www.pitcher.com.au

 

[qldfrog]

Not exactly about superannuation but the cash cow aspect is from an income insurance perspective in superannuation. This applies from today in super funds it seems.

Policies are subject to reassessment after 5 years. These changes will allow insurers to alter terms or decline cover after 5 years.

So it appears if a member is unable to work from, say, age 40, your income is for five years not until you reach 65, there is no automatic renewal after five years and the insurance company can change the T&C's.

Significant changes to Income Protection policies come into place from Friday, 1 October 2021 - Pitcher Partners

In the face of increasing losses and concerns of the financial sustainability of insurers, the Australian Prudential Regulation Authority (APRA) has required insurers to commit to several changes to income protection products as of October 1st, 2021.

www.pitcher.com.au

You will notice recently a strong set of changes in life policies access, terms of those and limited payments..
Even big banks getting out of the life and disability insurance business
Obviously NOT related to the mass injections of millions with untested for long term effect of genetic modification product..
No omg in my food, just straight into my body..
We can applaud insurance companies to do their homework , can not say the same for our government..
Just saying..feel free to look yourself
Which is all good news for super funds..less withdrawers ahead

 

[Belli]

If your post made even the slightest bit of sense I may have thought more deeply about whatever it is you're trying to convey.

 

[Miner]

Soon after coming to office in 1996, the Howard Government introduced a superannuation surcharge for contributions from higher income earners. It's reintroduction is currently off the agenda (according to The Australian), but Labor is currently considering the following measures (below, again from The Australian).

Linking the contributions tax to a worker's marginal income tax rate would, in effect, be the same as the Coalition's surcharge, but Labor may go further, hitting income from super as well.

How about revisiting what said in 2012 ?

 

[sptrawler]

How about revisiting what said in 2012 ?

The Government of the day IMO will have three options regarding the tax on super in the pension phase, as it is interconnected with the old age pension.
The super system still has to be attractive to maintain people's enthusiasm for it.
1. Tax the funds earnings, as it does in the accumulation phase.
2. Increase the tax on the discharging of the funds at death.(currently 16.5% on the untaxed portion)
3. Add the PPR to the asset test

There are a whole heap of other options, but in reality the Government wants two things, people to self fund and stop intergenerational wealth transfer.
The second one is becoming a bigger issue than the first, as the baby boomers pass away, it wont be long before no one wants to take the rubbish out. ?
Imagine, we will end up with a whole FIFO workforce from Indonesia and the South Pacific, while the Aussie's sip latte's and take in the sun.

 

[divs4ever]

more likely we will still be in lock-down , and the FIFO workers will be doing all the work while the locals will be sitting in front of the Tube ( TV or U-Tube ) slurping on a tinnie ( 'cos the wine will all be exported to the Northern Hemisphere )

found a reason to liquidate my super in 2010 and haven't regretted it for a second

 

[sptrawler]

more likely we will still be in lock-down , and the FIFO workers will be doing all the work while the locals will be sitting in front of the Tube ( TV or U-Tube ) slurping on a tinnie ( 'cos the wine will all be exported to the Northern Hemisphere )

found a reason to liquidate my super in 2010 and haven't regretted it for a second

Yes if it was only me, I would cash in and buy the McMansion and enjoy the perks of life, the other half would rather live in a cave and eat road kill, than go to centrelink. ?

 

[divs4ever]

put my payout into AMP until 2018 , luckily jumping before the Hayne Royal commission and the proceeds are still sloshing around in the market , am a person of simple needs , i laugh at all the things a vaccine passport will allow me to do ( that i had done until boredom decades ago )

interesting times , indeed

 

[dyna]

Union-aligned super funds got $ 4.5 Billion worth of inflows for the June 1/4. ( plus $ 18 Bill. member contributions )
Industry funds now hold $ 872 Billion in assets, up 23% over the year.
For the first time since September 2,016, the Retail super sector enjoyed a net $0.3 Bill. inflow as more members joined up than exited for other ( probably Union and Not-for-profits ) sectors.
The 3.3Trillion savings pool appears to be outgrowing the local sharemarket. Just 37% of it is now local, down from 45% , 8 years ago.
The 10 biggest super funds could hold 80% of superannuation assets by 2,025. Rainmaker predicts the the 5 biggest will all be Industry funds by then, too: Australian Super , Aware Super, Uni Super , Host Plus , and Q Super/ SunSuper .

 

[mullokintyre]

Union-aligned super funds got $ 4.5 Billion worth of inflows for the June 1/4. ( plus $ 18 Bill. member contributions )
Industry funds now hold $ 872 Billion in assets, up 23% over the year.
For the first time since September 2,016, the Retail super sector enjoyed a net $0.3 Bill. inflow as more members joined up than exited for other ( probably Union and Not-for-profits ) sectors.
The 3.3Trillion savings pool appears to be outgrowing the local sharemarket. Just 37% of it is now local, down from 45% , 8 years ago.
The 10 biggest super funds could hold 80% of superannuation assets by 2,025. Rainmaker predicts the the 5 biggest will all be Industry funds by then, too: Australian Super , Aware Super, Uni Super , Host Plus , and Q Super/ SunSuper .

3.3 trillion is a fair slice of money looking for a home.
How long will it be before the Super funds start to turn the tables on the banks and swallow one of them up?
BOQ and BEN are capitalised at 5 and 6 billion respectively.
Pocket money for the Union funds.
Housing mortgages would be a very nice substitute for the superfunds to have funds invested in.
Mick

 

[over9k]

3.3 trillion is a fair slice of money looking for a home.
How long will it be before the Super funds start to turn the tables on the banks and swallow one of them up?
BOQ and BEN are capitalised at 5 and 6 billion respectively.
Pocket money for the Union funds.
Housing mortgages would be a very nice substitute for the superfunds to have funds invested in.
Mick

Depends on which politicians are in power/who's donating to the liberal party.

Wayne swan wanted a 5th big bank for a long time, hence the torpedoing of what I think was the NAB takeover of AXA so that AMP could merge with them instead and get some kind of AMP/AXA new retail bank going and that never happened so I can't help but think this is a bit of a pipe dream

 

[mullokintyre]

My thinking is that in 3 years time, there will be federal labour Government , a NSW labour Government, and Coalition in Victoria and Queensland. the rest stay the same or don't count.
So in theory at leat, Labour will be able to walk the walk instead of Talk the talk.
I expect to see the removal of negative gearing on houses, removal of at least some of the generous tax concessions for super, a commitment to zero carbon emissions by 2050, or maybe earlier, a federal anti corruption body, a bill of human rights, a first nations alternate parliament and a treaty between first nations and the Australian government, and allowance of anybody who comes to the country to stay here and gain citizenship should they wish. And to top it off, they will allow members of the various unions to negotiate mortgages on property with the super funds the unions control.
And thats just in the first term.
Mick

 

[over9k]

Dunno about that. I reckon we might have the whole "We need the coalition's superior economic management to get us out of this thing and start rebuilding the economy" or some such drivel.

Too many boomers with too much in their super funds and investment properties.

 

[sptrawler]

Dunno about that. I reckon we might have the whole "We need the coalition's superior economic management to get us out of this thing and start rebuilding the economy" or some such drivel.

Too many boomers with too much in their super funds and investment properties.

Boomers are getting old, I think you are right about them having too much money, the last thing that the Country needs is all that money transferred to the next generation, the whole workforce will have to be brought in from overseas.
I think we will definitely get a labor Government in and they will implement the changes required, to stop the inter generational wealth transfer.
When you think about the amount of citizen conditioning that has been done, in the name of covid control, there really shouldn't be any problem bring in a lot of structural change, so it should be interesting IMO.
Whether they take it off the boomers, or somehow stop the transfer to their children, will be worth keeping an eye on.
If they take it off those who have saved it, that may have a negative effect on the next generation saving and investing, more likely to introduce some form of death duty IMO.
Also the some of the changes Mick suggested, will be implemented IMO.

 

[over9k]

Boomers are getting old, I think you are right about them having too much money, the last thing that the Country needs is all that money transferred to the next generation, the whole workforce will have to be brought in from overseas.
I think we will definitely get a labor Government in and they will implement the changes required, to stop the inter generational wealth transfer.
When you think about the amount of citizen conditioning that has been done, in the name of covid control, there really shouldn't be any problem bring in a lot of structural change, so it should be interesting IMO.
Whether they take it off the boomers, or somehow stop the transfer to their children, will be worth keeping an eye on.
If they take it off those who have saved it, that may have a negative effect on the next generation saving and investing, more likely to introduce some form of death duty IMO.
Also the some of the changes Mick suggested, will be implemented IMO.

Yeah, inheritance tax is one of the very few things that they won't have a hope of passing on account of housing costs etc.

So gen X's income taxes are going to be it.

 

[dyna]

Over the next 20 years that intergenerational wealth transfer is estimated to be about what's currently in super . $ 3.5 Trillion....taxed at just 15% + the medicare levy in the well-deserving hands of the rising generation.
Unless of course, if a modest, say 10% death duty were to be brought in, on top of that, by either party's proper tax reform. It's still possible that Ken Henry's Report of so long ago, could be dusted off for another look!

 

[over9k]

Over the next 20 years that intergenerational wealth transfer is estimated to be about what's currently in super . $ 3.5 Trillion....taxed at just 15% + the medicare levy in the well-deserving hands of the rising generation.
Unless of course, if a modest, say 10% death duty were to be brought in, on top of that, by either party's proper tax reform. It's still possible that Ken Henry's Report of so long ago, could be dusted off for another look!

No chance. Just think about the uproar:

"Inheriting a place is the only hope we ever had of owning a home and now you're taking that from us too".


Like I said, gen X are the ones that are going to get squeezed.

 

[sptrawler]

No chance. Just think about the uproar:

"Inheriting a place is the only hope we ever had of owning a home and now you're taking that from us too".


Like I said, gen X are the ones that are going to get squeezed.

I agree they will be squeezed, but I disagree with how it will be done, the trajectory of income tax and business tax is down, not up.
So how they get the money from the boomers without just taking it off them is limited, much more difficult to tell people work your ar$e off for a better retirement, then when they stop working take that retirement off them.
Much easier to say, you enjoy that retirement and we will take a piece of your estate when you pass away, to help cover the cost.
That is why the Government is starting to make reverse mortgages more attractive, they don't want people inheriting a house, they want people gagging for a job, so they don't have to keep importing labour.
Even the ACTU mentioned the re introduction of death duties, when Labor were floating all the super changes and franking credit changes, one thing for sure something is going to happen.