Superannuation, the ultimate government cash cow?

[farmerge]

Please re read the highlighted quote in my previous post.
The Govt can lean on the funds to work on behalf of the nation as has been shown in the above post and has also been suggested in funding renewables in the near future.
You keep up the double talk and people will think your an MP. Lol
As for the LNP giving the resources away, all sides have been doing that, Jimbo is having a beano getting great returns on iron ore.
You might have missed it, but he has mentioned that iron ore has added to his budget surplus quite often. Lol
Now we are going to rebuild the solar panel manufacturing plant, that Kev shut down last time Labor was in office, go figure. Lol
Wouldn't it be great if there was a perfect political party, it will never happen, despite your blind faith.
By the way, raiding the future fund is never far away from either parties minds and by the way it was the LNP that started the future fund if you remember. Lol

https://www.investmentmagazine.com.au/2023/11/treasurer-enlists-super-funds-for-energy-transition-push/

Super savings should be used to invest in defence sector: Chalmers

Last year, the treasurer said there was a role for super in supporting affordable housing and clean energy. Now, he wants to expand that to include defence.

www.afr.com

An undoubted cash cow that can, could and will be exploited to the benefit of whichever political party holds the keys to the Treasury cash registrar.

 

[sptrawler]

An undoubted cash cow that can, could and will be exploited to the benefit of whichever political party holds the keys to the Treasury cash registrar.

That's the way it is, the Govt gives people a tax break on putting the money in, the Govt has the right to say how it is dealt with, nothing strange about that.
As long as the person gets a reasonable rate of return, it doesn't matter.

 

[farmerge]

That's the way it is, the Govt gives people a tax break on putting the money in, the Govt has the right to say how it is dealt with, nothing strange about that.
As long as the person gets a reasonable rate of return, it doesn't matter.

@sptrawler I don't have any issue with this cash cow being used by the Govt as long as it betters the capital used.
If of course if something does go belly-up who makes up the difference to the bottom line?????

 

[sptrawler]

@sptrawler I don't have any issue with this cash cow being used by the Govt as long as it betters the capital used.
If of course if something does go belly-up who makes up the difference to the bottom line?????

The taxpayer as usual, but one way or another the taxpayer pays for it anyway, directly or indirectly.

 

[Gunnerguy]

Lifetime Annuities are a widely-used option by Financial Advisers.

Challenger are the biggest provider and they offer a Lifetime Annuity. These have a cash-out/withdrawal value in the early years following purchase, so they are more flexible than they used to be. You can opt for indexation of payments. Centrelink only assess 60% of the purchase price under the Assets Test, so they help increase qualification for Age Pension.

If you assess the PV/FV/PMT combinations of the Challenger annuities they are based on a growth of under 5% pa.
I looked at these very closely 2-3 months ago.
Yes nice to have a ‘known’ income over a time period or lifetime, however with no tax in super pension phase I believe (I know) I can beat 5% annually even just on the OZ market average gain and the dividends over a medium to long term. Add in some international equities then the return increases.
Yes there are market down turns but for a retiree with 10/15/20 years to go Challenger are certainly not of value to someone with any investment experience.
With savings accounts and Fixed Income at about 5% now (who knows in the future) I wouldn’t touch a 5% return annuity.

Gunnerguy

 

[sptrawler]

If you assess the PV/FV/PMT combinations of the Challenger annuities they are based on a growth of under 5% pa.
I looked at these very closely 2-3 months ago.
Yes nice to have a ‘known’ income over a time period or lifetime, however with no tax in super pension phase I believe (I know) I can beat 5% annually even just on the OZ market average gain and the dividends over a medium to long term. Add in some international equities then the return increases.
Yes there are market down turns but for a retiree with 10/15/20 years to go Challenger are certainly not of value to someone with any investment experience.
With savings accounts and Fixed Income at about 5% now (who knows in the future) I wouldn’t touch a 5% return annuity.

Gunnerguy

Yes annuities aren't very popular, they tie up the money and remove flexibility from my understanding, the other issue is around the concept that it wont affect the pension, I don't think people believe that spiel anymore.
Everyone now knows the stroke of a pen, blows holes in the best laid plans.

Most I talk to just want to enjoy their money as and when they want to, most baby boomers have a realistic view that age and health will stop their spending.

The Govt's have a problem with people not spending it and passing it on to their kids and at the same time spending it too quickly and going on a full pension, oh dear the quandry. Lol

 

[dyna]

I believe (I know) I can beat 5% annually

Even our little friends down at the ATO know it , too .
Just got a friendly letter from their Albury bunker , telling me they intend jacking up my next PAYG payment by an extra 5 % .
No need to appeal it. ( Five percent eh ? Oh what a blessing ! )

 

[sptrawler]

Even our little friends down at the ATO know it , too .
Just got a friendly letter from their Albury bunker , telling me they intend jacking up my next PAYG payment by an extra 5 % .
No need to appeal it. ( Five percent eh ? Oh what a blessing ! )

With regard super and the pension, the next cab off the rank is deeming.
The last Govt froze it at about a max of 2.25% from memory, that is currently under review from my understanding.

 

[Gunnerguy]

Even our little friends down at the ATO know it , too .
Just got a friendly letter from their Albury bunker , telling me they intend jacking up my next PAYG payment by an extra 5 % .
No need to appeal it. ( Five percent eh ? Oh what a blessing ! )

Me and Ms Gunnerguy get PAYG requests every year after submitting our returns.
…. And every year we go to myGov, ATO and cancel it.
Prefer to keep money and pay if/when I have to after nexts years return is done.
Generally manage to adjust holdings, CGT, and super contributions to ‘manage’ our tax.

 

[farmerge]

I/we prefer that the Tax Dept is in debt to us on a quarterly basis if possible.
Really depends on the quarterly cash coming in which in some quarters is huge and other quarters the outgoings give us a handy recoup from the Govt.
Swings and roundabouts.
The mantra is to pay as little as possible.

 

[IFocus]

Please re read the highlighted quote in my previous post.
The Govt can lean on the funds to work on behalf of the nation as has been shown in the above post and has also been suggested in funding renewables in the near future.
You keep up the double talk and people will think your an MP. Lol
As for the LNP giving the resources away, all sides have been doing that, Jimbo is having a beano getting great returns on iron ore.
You might have missed it, but he has mentioned that iron ore has added to his budget surplus quite often. Lol
Now we are going to rebuild the solar panel manufacturing plant, that Kev shut down last time Labor was in office, go figure. Lol
Wouldn't it be great if there was a perfect political party, it will never happen, despite your blind faith.
By the way, raiding the future fund is never far away from either parties minds and by the way it was the LNP that started the future fund if you remember. Lol

https://www.investmentmagazine.com.au/2023/11/treasurer-enlists-super-funds-for-energy-transition-push/

Super savings should be used to invest in defence sector: Chalmers

Last year, the treasurer said there was a role for super in supporting affordable housing and clean energy. Now, he wants to expand that to include defence.

www.afr.com

Norway population 5,474,360 sovereign wealth fund US$1.62 trillion

Australia population 26,649,231 sovereign wealth fund = 0

Australian debt heading towards $1 trillion

Pick the difference.

 

[Dona Ferentes]

Norway population 5,474,360 sovereign wealth fund US$1.62 trillion

Australia population 26,649,231 sovereign wealth fund = 0

Australian debt heading towards $1 trillion

Pick the difference.

future fund ?

 

[sptrawler]

Norway population 5,474,360 sovereign wealth fund US$1.62 trillion

Australia population 26,649,231 sovereign wealth fund = 0

Australian debt heading towards $1 trillion

Pick the difference.

And your point is? With regard our discussion.

 

[IFocus]

future fund ?

Yep $270 bill but its purpose "making provision for unfunded superannuation liabilities for politicians and other public servants " however the government has access to it and now show it in the budget.

Still a pittance compared to what we should have instead of $1 trillion in debt it should be many trillions in a sovereign fund.

Instead it appears we are relying on superannuation funds for capital investment (taxpayers savings).

This commodities demand / cycle will run out one way or another and Australia will have little to show for it other than very rich billionaires.

End of rant.

 

[IFocus]

And your point is? With regard our discussion.

"You might have missed it, but he has mentioned that iron ore has added to his budget surplus quite often. Lol"


As you can see from Norway's experience its adds very little we are still $1 trill or there abouts in debt.

Realistically Labors surpluses will be short lived.

 

[Junior]

If you assess the PV/FV/PMT combinations of the Challenger annuities they are based on a growth of under 5% pa.
I looked at these very closely 2-3 months ago.
Yes nice to have a ‘known’ income over a time period or lifetime, however with no tax in super pension phase I believe (I know) I can beat 5% annually even just on the OZ market average gain and the dividends over a medium to long term. Add in some international equities then the return increases.
Yes there are market down turns but for a retiree with 10/15/20 years to go Challenger are certainly not of value to someone with any investment experience.
With savings accounts and Fixed Income at about 5% now (who knows in the future) I wouldn’t touch a 5% return annuity.

Gunnerguy

I only use them for clients who can access Age Pension. Once you add that into the equation it's a different story.

It's never 'all-in' on an annuity either, I'd look at 20-30% of retirement assets max. The remainder in Cash/TDs/Equities, with the exact mix depending on age & income requirements.

 

[sptrawler]

"You might have missed it, but he has mentioned that iron ore has added to his budget surplus quite often. Lol"


As you can see from Norway's experience its adds very little we are still $1 trill or there abouts in debt.

Realistically Labors surpluses will be short lived.

Yes @SirRumpole and myself have been saying for years, the royalties charged on companies should be adjusted on a constant basis, to reflect the prevailing market.
Brendon Grylls in W.A pushed it, but he was shut down, now all of a sudden when nickel falls on its ar$e it isn't that difficult to adjust royalties.
All our minerals and energy exports should be taxed on a volume base against a benchmark IMO, but that is probably another thread.

 

[farmerge]

Yes @SirRumpole and myself have been saying for years, the royalties charged on companies should be adjusted on a constant basis, to reflect the prevailing market.
Brendon Grylls in W.A pushed it, but he was shut down, now all of a sudden when nickel falls on its ar$e it isn't that difficult to adjust royalties.
All our minerals and energy exports should be taxed on a volume base against a benchmark IMO, but that is probably another thread.

I think it is Sweden that makes sure its populace gets a fair share when it comes to oil. From memory a royalty of 30% goes into their "forever fund"

 

[sptrawler]

Interesting article.

Boomer ‘wave’ of outflows starts to hit super

Australia’s biggest retail superannuation funds are paying out billions more dollars in cash than they are bringing in as baby boomers reach retirement age.

www.afr.com

 

[farmerge]

Interesting article.

Boomer ‘wave’ of outflows starts to hit super

Australia’s biggest retail superannuation funds are paying out billions more dollars in cash than they are bringing in as baby boomers reach retirement age.

www.afr.com

@sptrawler Will funds now start to cry poor, as it is their money and not ours!!!!