Superannuation, the ultimate government cash cow?

[Value Collector]

It's actually the land which is leased, not the house.

Crown leases

Find information on crown leases and leasehold requirements in the ACT.

www.planning.act.gov.au

Yep, I thought that was implied . I guess at the end of the lease you can ”Move House”

I am not sure that your “house” would be holding on to any capital gain it had if the lease of the land it was sitting on expired.

 

[Belli]

Yep, I thought that was implied . I guess at the end of the lease you can ”Move House”

I am not sure that your “house” would be holding on to any capital gain it had if the lease of the land it was sitting on expired.

The lease on this property is due for renewal in 2081. As I am now in my mid-seventies, well,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

 

[divs4ever]

Yep, I thought that was implied . I guess at the end of the lease you can ”Move House”

I am not sure that your “house” would be holding on to any capital gain it had if the lease of the land it was sitting on expired.

you can with the old Queenslanders . this village has about 10% removal homes currently .

brick veneer and double brick homes are much harder to shift ( to be reused in a livable condition )

but after removal costs would there be any capital gains

 

[Value Collector]

The lease on this property is due for renewal in 2081. As I am now in my mid-seventies, well,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Yeah, my point was just that if they went by the original plan, it would extremely limit the amount of capital gains that can accrue to the private individual, and instead pass those gains along to the government, because the value of the lease would be decaying with each passing year.

For example under the original plan, if you pass away in 20 years your family only inherit a house with 37 years left on the lease, that’s not going to have much capital gain on it, and if that next owner lives in it for 30 years then it’s only got 7 years left, the lease would be decaying in value pretty fast by then.

 

[Value Collector]

you can with the old Queenslanders . this village has about 10% removal homes currently .

brick veneer and double brick homes are much harder to shift ( to be reused in a livable condition )

but after removal costs would there be any capital gains

The building is a depreciating asset, most of the capital gain is tied to the land, which you were never meant to “own”.

( but just saying that, they do now renew the leases for about $400, they have given up on the reclaiming and reselling leases, I doubt it would be politically popular )

 

[divs4ever]

The building is a depreciating asset, most of the capital gain is tied to the land, which you were never meant to “own”.

( but just saying that, they do now renew the leases for about $400, they have given up on the reclaiming and reselling leases, I doubt it would be politically popular )

especially when a lot of the residents work in Government/Council one thing to have hostile voters , but disgruntled employees as well

 

[sptrawler]

Singapore works on a lease system, it is hard to move a property nearing end of lease, but also as the Govt owns them, they can buy out the lease on old buildings knock them over and renew the building.
Which helps reduce slums.

Yep, I thought that was implied . I guess at the end of the lease you can ”Move House”

I am not sure that your “house” would be holding on to any capital gain it had if the lease of the land it was sitting on expired.

 

[Dona Ferentes]

good to see Professor Paperboy opining again.

reality is in the ACT

Crown leases

Find information on crown leases and leasehold requirements in the ACT.

www.planning.act.gov.au

one interesting aspect is that landbanking is hard to do. Buy a newly developed block of land and plans, then building, are expected to start within 12 months

 

[Belli]

especially when a lot of the residents work in Government/Council one thing to have hostile voters , but disgruntled employees as well

A stupid statement. Akin to saying public servants in the ATO won't administer tax law because they are disgruntled at paying tax.

 

[divs4ever]

A stupid statement. Akin to saying public servants in the ATO won't administer tax law because they are disgruntled at paying tax.

is it ?

maybe you converse with different government employees than i do ?

 

[Belli]

one interesting aspect is that landbanking is hard to do

I've never been able to find a satisfactory answer to the situation where leasehold land in the ACT is brought into an SMSF or Discretionary TT (which generally can only last for 80 years) and the lease is due for renewal. I'm sure there is one but I cannot find it.

 

[qldfrog]

Reading thru the AFR today
The ART is the one I left for Aus Super

 

[Belli]

Dear, dear me. "Contact centres, providing more in the way of advice, understanding their members and getting data for that - that all costs."

Did everyone expect costs would go down with the Reform of Financial Advices, resulting in many competent advisers, who understood their clients and had the data relevant to those clients, leaving the industry resulting in a shortage of advisers, who are required to meet increased standards?

Now the industry funds, attempting to be the "One and Only", have to bear those costs as do the members. Presently, advisers are limiting the clients they can assist due to the dynamics in the market.

Wait until members ask for assistance for residential care placements, which is where Aged Care Specialist financial advisers come in handy, and see if industry funds are prepared to take on that role - at a cost of course.

 

[Warr87]

So, to summarise:

• big mergers were promised to bring down overall costs, with juts a few large funds owning most of the sector.
  • didn't happen, costs increased.
• economy of scale was promised, with savings passed on.
  • didn't happen, though theoretically economy of scale should've brought down admin.
• it's the 'external factors' fault.
  • what these are, aren't really stated.
• regulation and reporting is the issue.
  • of course, some of the largest funds in Australia are saying if you just de-regulate them, they'll promise to bring down the cost. You'll see, just trust them.
• Customers and politicians wanting more, particularly answers, is costing them money hence the increased admin overhead.
• money is being invested in their infrastructure.
  • no longer outsourcing, but doing things internal. so this is now costing more, but it should actually provide savings in the future...apparently.
  • "it could provide savings"
• things should improve over the next 5yrs
  • based on...what? Just wait 5yrs then revisit the situation? Seems disingenuous at best.

The idea that some of the largest pools of money in Australia, where Australians are mandated to put their money somewhere, somehow should just be trusted and don't bother asking for reporting, asking questions, or regulating them in some way is a bit laughable. Because nothing has ever happened to a monopoly of wealthy funds that insist you shouldn't hold them to account. Sounds reasonable.

 

[Belli]

For those who contribute to superannuation, the CPI calculations indicate the concessional amount will increase to $30k next financial year.

AWOTE hasn't increased to the same extent and I don't think it will increase from the current $1.9m. My numbers could be wrong of course.

 

[Ferret]

For those who contribute to superannuation, the CPI calculations indicate the concessional amount will increase to $30k next financial year.

AWOTE hasn't increased to the same extent and I don't think it will increase from the current $1.9m. My numbers could be wrong of course.

Isn't it the other way around?

The January CPI was not enough to raise the transfer balance cap from $1.9M. This cap is almost certain to rise to $2.0M on 1 July 2025.

The AWOTE drives the concessional and non-concessional contribution caps. It is reported on 22 Feb and is expected to lead to the caps raising to $30k and $120k respectively on 1 July 2024.

 

[Value Collector]

So, to summarise:

• big mergers were promised to bring down overall costs, with juts a few large funds owning most of the sector.
  • didn't happen, costs increased.
• economy of scale was promised, with savings passed on.
  • didn't happen, though theoretically economy of scale should've brought down admin.
• it's the 'external factors' fault.
  • what these are, aren't really stated.
• regulation and reporting is the issue.
  • of course, some of the largest funds in Australia are saying if you just de-regulate them, they'll promise to bring down the cost. You'll see, just trust them.
• Customers and politicians wanting more, particularly answers, is costing them money hence the increased admin overhead.
• money is being invested in their infrastructure.
  • no longer outsourcing, but doing things internal. so this is now costing more, but it should actually provide savings in the future...apparently.
  • "it could provide savings"
• things should improve over the next 5yrs
  • based on...what? Just wait 5yrs then revisit the situation? Seems disingenuous at best.

The idea that some of the largest pools of money in Australia, where Australians are mandated to put their money somewhere, somehow should just be trusted and don't bother asking for reporting, asking questions, or regulating them in some way is a bit laughable. Because nothing has ever happened to a monopoly of wealthy funds that insist you shouldn't hold them to account. Sounds reasonable.

Two points

1. The important factor is not whether over all costs increased or not, because no doubt the costs of the smaller funds would have increased over 4 years, but the point is did they increase by less than they would have without the merger.

2. how much of the increase in cost was one offs due to the merger?

and one final point, from the perspective of the individual account holder, you are going to be far better off focusing on making sure your super is setup right eg correct assets, low or no insurance, and that you are putting enough in rather than being cynical about some headline cost increases.

 

[Warr87]

Two points

1. The important factor is not whether over all costs increased or not, because no doubt the costs of the smaller funds would have increased over 4 years, but the point is did they increase by less than they would have without the merger.

2. how much of the increase in cost was one offs due to the merger?

and one final point, from the perspective of the individual account holder, you are going to be far better off focusing on making sure your super is setup right eg correct assets, low or no insurance, and that you are putting enough in rather than being cynical about some headline cost increases.

1. Obviously costs would've increased, as the cost of all things do, over time. It's called inflation, I'm sure you've heard of it. But that was hardly the point of the article. I would also imagine that any costs associated with the merger would've been accounted for in their costings and pricing. Adding on fees for admin overhead is an operational expense. Adding on the costs to current fees would unlikely be rewound once mergers have completed. People would already be accustomed to them, so why would they roll them back? The article doesn't go into that depth, but cynicism towards a large and powerful group that raises costs with no inccentive for them to fall is hardly misplaced cynicism.

2. Good point. They don't elaborate. But again, they would have had costings and pricings done prior to the merge and outlined in detail for their execs/board. If those were one offs due to the merger, then they could easily point to that and say so. In fact, the article points to the opposite. The promise was that the merger of large funds would reduce costs, not 'there will be a momentary increase in fees to ensure transition during the merger'. Instead, a reduction of costs was promised, and the opposite happened.

And you're right from the individual account holder, but to what degree do you expect everyone who has a super to be so attuned? Those of us here certainly are, but to expect an entire population to be, is crazy. And don't be cynical? You're kidding right. They almost have a monopology and are going to be some of the largest pools of money in the country. Just ignore what they're doing? It doens't effect me personally, but that doesn't mean you shouldn't be cynical and cautious of what they're going to do to others. You're point seems to be more 'I got mine, and the rest should be better'.

 

[sptrawler]

As the pool of workers decreases and the number of retirees increases, the actual earnings will become more accurate I feel.

 

[Belli]

Isn't it the other way around?

The January CPI was not enough to raise the transfer balance cap from $1.9M. This cap is almost certain to rise to $2.0M on 1 July 2025.

The AWOTE drives the concessional and non-concessional contribution caps. It is reported on 22 Feb and is expected to lead to the caps raising to $30k and $120k respectively on 1 July 2024.

Oops. You're right. Me bad.

Note to self: Don't do numbers after a long night and shortly after you drag your sorry a$$ out of bed.