Superannuation, the ultimate government cash cow?

sptrawler said:

That's good recall Belli, can you remember how the min max age related drawdowns worked, it was designed to stop people just pulling their money out ad lib and then running out.
The 2007 changes worked on the fact if you drew it out, it was impossible to get it back in the tax free super system and people tended to draw the minimum anyway.

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sptrawler said:

One great attraction of a lifetime pension is that it shifts this “longevity risk” onto the provider of the pension.
In the jargon of high finance, such a pension is called an “annuity”. You can buy annuities today, but most are for fixed periods, and they’re not popular. To make them more attractive, they’d have to be for life, and this would require them to be backed by the government.

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mullokintyre said:

The problem is, the providers of these annuities will structure the annuity so as the providers make a good living out of it.
The people who might consider them look at the total amount they put into the annuity, and work out how many years they can expect to live and see how much the provider takes out, and say nah, thanks but I'll look at something else.
mick

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dyna said:

Roger Montgomery was on ( and on , ad nauseam ) about the ASA 's ( Australian Superannuation Members Association ) $ 52, 000 pa ( $ 72 , 000 for a couple ) required for a " comfortable " retirement .
Check it out on last night's ABC " Nightlife " podcast , out now . Other , more interesting stuff as well , like Tesla and E V's in general .

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dyna said:

Roger Montgomery was on ( and on , ad nauseam ) about the ASA 's ( Australian Superannuation Members Association ) $ 52, 000 pa ( $ 72 , 000 for a couple ) required for a " comfortable " retirement .
Check it out on last night's ABC " Nightlife " podcast , out now . Other , more interesting stuff as well , like Tesla and E V's in general .

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An unlikely coalition of public servants is making a last-ditch attempt to avoid being caught in the government’s new super tax for high earners.
Government bureaucrats on defined-benefit pensions want nothing to do with the plan to introduce a 30 per cent tax on super earnings for balances above $3m and are pushing back hard on government plans.

The ACPSRO – Australian Council of Public Sector Retiree Organisations – representing around 700,000 public servants says they should not come under the new tax because they will not be able to avoid it, while most retirees with pensions at risk on the market can move money out of super if they wish.

‘We are sitting ducks here, we do not have the options to move money around – we are being treated as if defined benefits were some sort of gift, but we want to make it clear that we are taxpayers, and we never got the tax concessions of others in the system,’ says John Pauley, president of the ACPSRO.

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Several retired judges are demanding Labor exempt their lucrative judicial pensions from its plan to increase taxes on big superannuation accounts, saying their inclusion could be unconstitutional and treats them “more harshly” than other retirees.

A group representing former judges separately warned the government the tax could endanger the courts’ independence and drain talent from the bench.
Labor’s proposal to double the tax paid on earnings from balances in super accounts worth more than $3 million from 15 per cent to 30 per cent is currently before the House of Representatives.
Under the scheme’s design, it appears the annual pension paid to a federal judge will be added to the balance of their super when determining the balance above $3 million. For example, a judge with a balance of $3.5 million in super who receives a $200,000 pension will pay the higher rate of tax on earnings derived from the $700,000 portion.
Retired judges who sat on the bench for at least 10 years receive a pension equivalent to 60 per cent of the salary paid to those still employed. On a current Federal Court judge salary of $480,000-plus, that adds up to as much as $7 million over 20 years.

But in a submission to Treasury on the bill, a group of retired judges said including their pension in these calculations conflated superannuation savings, which individuals had some control over, with these payments.
This “most egregious flaw” meant the government was trying to apply the tax to savings which fell outside the purposes of the bill, such as stopping retirees building large savings pools in a low-tax environment to bequeath to family.

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mullokintyre said:

The various self interest groups are ling up to claim exemptions from the 3million limits on concessional taxation as the Labour Party prepares legislation.
From Evil Murdoch press

And the ultimate fat cats, the Judiciary, is also claiming foul and demanding exemptions.
From AFR

Why is it that those who have so much, are more than happy for other people to pay more tax, as long as they are not required to follow suit.
The similarities between this issue and those who believe emission limitations applies to other people, but not to them, is instructive.
Mick

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mullokintyre said:

The various self interest groups are ling up to claim exemptions from the 3million limits on concessional taxation as the Labour Party prepares legislation.
From Evil Murdoch press

And the ultimate fat cats, the Judiciary, is also claiming foul and demanding exemptions.
From AFR

Why is it that those who have so much, are more than happy for other people to pay more tax, as long as they are not required to follow suit.
The similarities between this issue and those who believe emission limitations applies to other people, but not to them, is instructive.
Mick

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Dona Ferentes said:

first up, I find the title of this de facto Super thread annoying.

Second, always watch out for someone squeezing in between you and your money.

Apollo Global Management’s co-president Jim Zelter was in Melbourne last week, telling the good and great of Australia’s $3.5 trillion super industry they are perfectly placed to help fill the gap left by banks that have been forced to limit their lending by regulation and, in some cases, poor returns..

“You all are the banks of tomorrow,” he told a finance summit. “Your pools of capital, the long duration, and your ability to manage that – that’s the real secular trend that, as an investor in 2024, you need to be aware of."

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qldfrog said:

So I could rephrase that as:
"If a project is risky or not economically worth doing for a commercial entity, let's use the suckers money with some tax incentives..(more suckers money) to build our corrupt leaders white elephants"
Is my french translation of this article right?!!

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qldfrog said:

So I could rephrase that as:
"If a project is risky or not economically worth doing for a commercial entity, let's use the suckers money with some tax incentives..(more suckers money) to build our corrupt leaders white elephants"
Is my french translation of this article right?!!

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Dona Ferentes said:

first up, I find the title of this de facto Super thread annoying.

Second, always watch out for someone squeezing in between you and your money.

Apollo Global Management’s co-president Jim Zelter was in Melbourne last week, telling the good and great of Australia’s $3.5 trillion super industry they are perfectly placed to help fill the gap left by banks that have been forced to limit their lending by regulation and, in some cases, poor returns..

“You all are the banks of tomorrow,” he told a finance summit. “Your pools of capital, the long duration, and your ability to manage that – that’s the real secular trend that, as an investor in 2024, you need to be aware of."

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sptrawler said:

Why do you find it annoying? If you don't mind me asking.
It actually IMO, captures the intent beautifully, if the Govt doesn't need more of the plebs money they don't milk it by changing the rules.
If the Govt finds themselves in a bond for money, as many brain farts leave them in that situation, they can crank up the milking of super without recourse

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IFocus said:

Because it simply isn't a cash cow for Government in fact its the opposite as it relives the Government of providing retirement funds for the peasants when they can no longer work.

It's also a savings scheme that throws money into investments that wouldn't otherwise exist.

Lots or other stuff to but you would know that.

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sptrawler said:

you don't have to get so defensive

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sptrawler said:

As if on cue, the mutterings are rising, intergenerational wealth transfer is starting to rise from the boom in asset values.

Don't forget concessionally treated super, is your money and the Governments money.

What a way to start Easter – a plan to smash the nest-egg

One way to limit the budgetary cost of superannuation is to make its sole purpose to allow people to live comfortably in retirement. That’s not what’s going on now.

www.smh.com.au

From the article:
So, if you want to stop people with super payouts using them (and all the tax concessions that contribute so much to their size) as a vehicle for enriching their kids, why not move to a system where people are encouraged to use their lump sum to buy a lifetime pension.

The amount of the pension would be determined by the size of the lump sum. Some people scrimp and save in retirement because they can’t know when they’ll die, and they’re not sure their money will last the distance.
One great attraction of a lifetime pension is that it shifts this “longevity risk” onto the provider of the pension.
In the jargon of high finance, such a pension is called an “annuity”. You can buy annuities today, but most are for fixed periods, and they’re not popular. To make them more attractive, they’d have to be for life, and this would require them to be backed by the government.
Don’t shake your head. It could happen.

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IFocus said:

Didn't mean to be defensive sorry.

As for sovereign wealth fund we don't have one the Future Fund is for "making provision for unfunded superannuation liabilities for politicians and other public servants "

The future fund is worth $272.3 billion AUD compare that to Norway's Sovereign wealth fund US$1.62 trillion, even Singapore has USD770 billion

We just give our resources away for SFA thanks to the clueless LNP conservatives (Tony Abbott and Co)

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