Superannuation, the ultimate government cash cow?

[sptrawler]

I'm with you @Belli , I am helping my kids in a similar fashion, I as you are getting older and I will run out of time before I run out of money. So helping the kids now is more effective than in 20years time when they are 60.
Your story about the guy next door is all too familiar, most of my mates that I grew up with are on full pensions, minimal super. But they always had the flash cars, expensive holidays along life's journey.
The problem I find, even now, I'm always planning and thinking about how to maximise the money I have and maintain the capital.
It's hard to give up a lifetime of habits. ?

 

[Warr87]

Spot on Belli, as the thread name says, 'the ultimate Government cash cow', while the Government gives a tax break for super investments, they feel it is their money and will continue to change the rules forever.
The part that is forgotten, is most of the sum in super originates from your contributions, not from the Government tax breaks, yet the contributer has the least say in how it is treated.
The reason the thread is so long, is because of the amount of discussion all the Government changes make to the rules.
Even this current discussion was brought about by impending Govt changes in the May budget. Specifically this article from post 2559:

Super tax concessions in Chalmers’ sights ahead of May budget

Treasurer Jim Chalmers says while the government’s immediate focus is on enshrining a definition for superannuation, that is not the end of the conversation.

www.theage.com.au

Well, didn't super originate as a supplement to the pension, as a privatised version funded by forced savings. That is why the gov is involved, and continues to be involved. Unfortunately they keep playing around with it and it no longer resembles where it began.--But the sentiment of it's theirs to play with is still there.

Changing the rules isn't a problem for me if it's to combat people gaming to system. Theres always someone who will take the piss. (Just like with our tax code.) My issue is when people start to mess with it like the opposition are currently recommending.

 

[sptrawler]

Well, didn't super originate as a supplement to the pension, as a privatised version funded by forced savings. That is why the gov is involved, and continues to be involved. Unfortunately they keep playing around with it and it no longer resembles where it began.--But the sentiment of it's theirs to play with is still there.

Changing the rules isn't a problem for me if it's to combat people gaming to system. Theres always someone who will take the piss. (Just like with our tax code.) My issue is when people start to mess with it like the opposition are currently recommending.

Everybody's take on what super is will be different, originally it was sold as a supplement to the pension, now it is being sold as a supplement or replacement for the pension.
As I said in an earlier post, how the statement 'a replacement for the pension' is defined is very open ended.
Does it mean as is now, that the pension reduces as the superannuation increases, on a sliding scale.
Or could it be interpreted, that it means that all the superannuation money has to be spent, before any pension can be accessed?

 

[Belli]

Everybody's take on what super is will be different, originally it was sold as a supplement to the pension, now it is being sold as a supplement or replacement for the pension.
As I said in an earlier post, how the statement 'a replacement for the pension' is defined is very open ended.
Does it mean as is now, that the pension reduces as the superannuation increases, on a sliding scale.
Or could it be interpreted, that it means that all the superannuation money has to be spent, before any pension can be accessed?

Buried and essentially forgotten (The Henry Report.)

Publications | Treasury.gov.au

treasury.gov.au

 

[sptrawler]

Buried and essentially forgotten (The Henry Report.)

Yes one of the only things they jumped on with glee in the report, was increasing the pension age to 67. ?

 

[Smurf1976]

Changing the rules isn't a problem for me if it's to combat people gaming to system.

The problem is when it takes a form that's equivalent to arresting everyone on the bus because one passenger committed a crime.

Looking at the various proposals over the years, they often fit into that category of being akin to banning cars to stop dangerous driving or banning matches to stop arson.

 

[Belli]

He he. It looks like the media chatter is really warming up. I've only scanned the headlines and not read the articles as basically it's the same old, same old of "They have and it ain't right!" or words to that effect. Makes investing outside of superannuation more and more attractive in some ways.

‘Easy wins’: Crossbench senators swing behind superannuation tax overhaul

The opposition has pointed out that Anthony Albanese promised before last year’s election that Labor “had no intention of making any super changes”.

www.smh.com.au

I don't object to reviewing arrangements with superannuation. I am just annoyed at the unstated implication we must be dodgey for having the audacity to save at lot and ahere to the legislation in force at any one particular time.

 

[Belli]

Here you are people. The murmurings which were mentioned a few pages back, are now starting to become a roar.

When asked about the idea of capping superannuation balances at $2 million or $5 million, Jones said the government has not made a decision.

“We haven’t formed a view – a final view on that yet. I’m not going to say we’re not thinking about it, clearly we are,” he said.

Capping super balances an option to stop ‘taxpayer-funded inheritance scheme’

Assistant Treasurer Stephen Jones says all options are on the table when it comes to limiting the growing cost of super tax concessions.

www.smh.com.au

Now if $2m, what does that mean for the balance cap which, due to CPI factors, could be $1.9m. Hmm, takes little movement for that to reach or exceed $2m. Mind you, the reverse is also true.

 

[sptrawler]

Here you are people. The murmurings which were mentioned a few pages back, are not starting to become a roar.

Capping super balances an option to stop ‘taxpayer-funded inheritance scheme’

Assistant Treasurer Stephen Jones says all options are on the table when it comes to limiting the growing cost of super tax concessions.

www.smh.com.au

Now if $2m, what does that mean for the balance cap which, due to CPI factors, could be $1.9m. Hmm, takes little movement for that to reach or exceed $2m. Mind you, the reverse is also true.

Also the super funds would have a problem, it would put a cap on their trough.
Then the pollies would not have an ever expanding retirement directorship, to retire into post politics.

 

[Belli]

Also the super funds would have a problem, it would put a cap on their trough.
Then the pollies would not have an ever expanding retirement directorship, to retire into post politics.

Let's go wild and ban SMSF's. Think of the savings to be made. Of course, the legal and accounting professions as well as SMSF specialists would be a wasteland of unemployment as they would no longer be required but that would be a small price to pay.

 

[sptrawler]

Let's go wild and ban SMSF's. Think of the savings to be made. Of course, the legal and accounting professions as well as SMSF specialists would be a wasteland of unemployment as they would no longer be required but that would be a small price to pay.

Classic.
We run our own SMSF, cost $1k a year, why would I put it in a retail or industry fund? Other than giving a donation to their management/directors etc.

 

[sptrawler]

Firstly, I personally think that Labors suggested cap on super is brilliant, but I doubt they actually will push it through, mainly because how will the industry funds keep the ponzi going when there is a cap on how much members can have in it.
A bit like saying the banks can only have a certain amount of deposits, how can they lend more, if they can't take in more.
But hopefully they stick to their guns and bring it in, the $3m cap is the most sensible suggestion I've heard so far, very few middle Australians will get to that amount in the forseable future, so it does limit the ability to use super as an estate wealth creation vehicle.
It is the same as negative gearing, the best way to stop it becoming a ponzi, is to limit the amount that can be negative geared.

But by far the best news to come out of it is IMO, the sound of all the elites bums slamming shut, when they think their gravy train is shutting down, that isn't why the voted the teals in. They are there as the ultimate virtue signal, now they have to show their mettle. ? ?

Teals hit back at Labor’s $3m super cap idea

Independent MPs representing some of the nation’s wealthiest voters have warned against another raid on superannuation, saying people had invested in good faith.

www.afr.com

Independent MPs representing some of the nation’s wealthiest voters have warned against another raid on superannuation, saying people had invested in good faith and the government should focus on broader tax reform to balance the budget.

As Assistant Treasurer Stephen Jones all but confirmed the government was looking at imposing higher taxes on funds of around $3 million or more, teal independents took issue with the government going after individuals who had played by the rules.

North Sydney MP Kylea Tink called it “unsophisticated”, Allegra Spender from Wentworth said it was an ad hoc tax grab, and Zoe Daniel, who holds the Melbourne seat of Goldstein, warned that constant tinkering by governments of both persuasions was damaging the appeal of super.
The government has yet to make a final decision but hinted at reining in tax breaks for superannuation balances over $3 million in the May budget, which would affect about 36,000 people and save the budget $1 billion annually.


Mr Jones said self-managed super fund holders with large accounts would not be forced to sell assets such as property or farms.

“Can I be really, really clear about this? This is not about the government saying to any individual – a farmer, a small business owner, a factory worker, a teacher, a nurse – ‘you can only have this amount of money in retirement savings’,” he said.

“We’re not saying that, we’re not saying there’s a cap on how much money you can have in your retirement savings, and we’re not saying there’s a cap on how much money you can hand over to your kids in the form of your estate or your favourite charity.

 

[Belli]

Sit back, get some popcorn and enjoy the show. Best entertainment going.

 

[sptrawler]

Sit back, get some popcorn and enjoy the show. Best entertainment going.

Spot on, it could be one of the all time classic rope a dope moves ever IMO. ?

Great diversionary move and worst case scenario, they bring in something more palatable and everyone goes, thank god for that.?
Negotiation 101.
They have already wedged the Libs and the Teals and they haven't said anything yet, great move by Labor IMO.

 

[Belli]

Spot on, it could be one of the all time classic rope a dope moves ever IMO. ?

Great diversionary move and worst case scenario, they bring in something more palatable and everyone goes, thank god for that.?
Negotiation 101.

Just the way of it. Lots of words will be written, lots of words will be said, lots of opinions from those who ain't got much but wish they did and a few howls of anguish from those who do have some. And in the end, after much tooing and froing in the back rooms of Parliament and with other involved parties, we will find out either on Budget night or earlier depending when or if legislation is presented to Parliament. And when that happens, do what we always do - adapt.

Until then continue as normal. In my case that means grabbing a guitar and heading over to a mate's place for the afternoon.

 

[dyna]

From today's Weekend AFR : ( Some of it , at least. The rest , I just made up )

Super's pension account limit goes up to $ 1.9 mill. from July 1 2023. right ? but the Greens , bless ' em , want the now, likely $ 3 Mill. cap for tax concessions reduced to ...$ 2 Mill. There will be more squawking from them next week , no doubt .

Our socialist buddies down at the Gratten Institute, not wanting to be left out of the class warfare game, object to any " grandfathering " of existing funds already above the $ 3 Mill. threshold , saying that measure, alone , will pull in an extra $ Billion dollars in extra tax every year. Effectively , they want a " soft" cap , allowing assets above $ 3 Mill. to stay in the super fund, but just taxed more. Neat, eh?

Off topic, again, but this rag has a $ 4.50 cover price, these days. You would think some human would at least read the damned thing for spelling and grammar errors, before going to the printers.
" Putin's raging war on...." It's not a one-off, either . And any day of the week , too.
Climbing down off soap box, now.

 

[divs4ever]

Well this didn't take long, to rear its head. Like flies to a bucket of you know what. ?

like 'pigs to a food trough ' sprung straight to my mind ( because you just know they won't use those extra taxes wisely )

but yes i chose to liquidate my super in 2010 because i saw this coming ( surprised they waited so long , in fact )

 

[divs4ever]

“Right now, we’re on track to spend more on super tax concessions than the age pension by around 2050,” Chalmers said in a speech in Sydney on Monday.

must be planning to kill more of us off with their vaccines and wars then ( to reduce those that survive until 70 )

 

[divs4ever]

Well, Jimbo , the fun starts now . We all know where this is heading, now. It's been on the cards for a long time.

I'll give the Labor Party credit for calling out the Libs for sabotaging the super savings of all those hapless, low- income workers during the pandemic. They were the only mob that showed any morality in that despicable affair.
The media were nowhere to be seen during Morrison's cynical stunt. Not his constituency , so no concern what-so- ever for him , .... the ferkel.

they have ALL been busy sabotaging it after Keating sold us compulsory super .( instead of justified wage rises in take-home pay )

 

[divs4ever]

If you were like them, you would be wondering why $4,500 of your salary was being put away for 30 years and you can't afford the rent.

well i could afford the rent , but that was because i never bought a car ( or motorbike ) a new TV , paid tobacco taxes , etc etc

so all i see are politician's elephant tears at the consequences of their collective ( politician's ) greed