Superannuation, the ultimate government cash cow?

[ASICK]

I don't think it is so much about punishing both sides and looking for an alternative, but more forcing them out of the current modus operandi of self-preservation and looking after special interest groups. Easier said than done, of course.

http://www.afr.com/p/national/super_hit_on_wealthy_investors_GQcUMka42N7LHKj6C6K8VO

"However, the changes – which are estimated to save $2 billion a year – will be added to an estimated $8 billion of savings from super tax changes announced in last year’s budget to pay for the national disability insurance scheme and education spending." (emphasis added)

"save"? How about "rip"? it's all to be expected from these socialists - anyway, the liberals are no better - they're all socialists now. There's no real distinction any more.

Don't fret for senators and representatives, I'll bet their super will be indexed in some way to overcome the tax.

I'll use a common term of endearment used by "what's his name?", scumbags.

 

[drsmith]

Possibly because they had promised to reinstate the $50,000 cap for over 50's from July 2014, and now propose raising it to only $35,000 - unindexed.

From Superguide's website:
http://www.superguide.com.au/how-super-works/concessional-contributions-caps-10-facts-you-should-know

I didn't see your post. Too busy posting myself.

The implication was in the detail of the media release yesterday, but that confirms it.

 

[sptrawler]

Noel Whittaker wrote a great article in the 'Sunday Times' today, the article is called 'Ad Fab for some'

It gives a great summary of the superannuation system and who are really the winners.

Here is another article in a similar line, just shows what a bunch of hypocrits the pollies are.

http://www.perthnow.com.au/news/pol...-says-opposition/story-fnhnv0wb-1226613617102

POLITICIANS on generous taxpayer-funded defined benefits would be thousands of dollars better off than ordinary workers whose superannuation earnings will be slugged, the Opposition said last night.


I hope Bolt or someone gets stuck into them.lol

 

[Julia]

Surely it's time for Tony Abbott to stop making irresponsible comments?

The government plans to raid your superannuation to fund its spending spree. The government is going to take your money, your superannuation money.

There will be thousands of ordinary, ill-informed Australians who will take this extravagant statement at face value.
Perhaps he will gain some votes from such people as a result, but isn't he in the process losing respect from people whose goodwill he needs?

 

[drsmith]

Surely it's time for Tony Abbott to stop making irresponsible comments?

He's absolutely right in the sense that Labor wants to fund its spending spree. As to whether reducing super tax concessions is taking your money, your superannuation money, that's more debatable, but the broad impression he wants give is that Labor wants to raid super to fund its spending and on that, he's right.

Comparisons with Cyprus though were definitely over the top in my view. I think now though that the politicians get advised on this short of stuff. Perhaps it's designed to appeal to a demographic less interested in politics. From my perspective however, it's just plain silly.

There was some interesting discussion on Insiders amongst the panel this morning regarding our fiscal position. Whoever wins government nest term will likely be faced with difficult fiscal choices, and for that, super is an easy target. Once the election is over, super tax concessions will be hit far harder than they are now, regardless of who is in power and what they say now. The advantage the Coalition will hopefully offer in office is that they will focus more on debt reduction than Labor.

 

[Garpal Gumnut]

Surely it's time for Tony Abbott to stop making irresponsible comments?

The government plans to raid your superannuation to fund its spending spree. The government is going to take your money, your superannuation money.

There will be thousands of ordinary, ill-informed Australians who will take this extravagant statement at face value.
Perhaps he will gain some votes from such people as a result, but isn't he in the process losing respect from people whose goodwill he needs?

I disagree Julia, Tony Abbott was quite correct to make that statement.

Nobody knows what they, the ALP, originally intended until there was a hue and cry from the Super fund Industry and from SMSF's.

And if they win the election in September, they will raid Super funds, they will have to raid them, to pay for their unfunded promises.

gg

 

[ASICK]

http://www.breitbart.com/Big-Govern...s-by-Capping-Retirement-Accounts-at-3-Million

ah... ya gotta love these socialists.

It's all for the common good.

Yes gg, labor will raid those who are successful to pay for those who are hopeless (or unfortunate).

 

[sails]

Surely it's time for Tony Abbott to stop making irresponsible comments?


There will be thousands of ordinary, ill-informed Australians who will take this extravagant statement at face value.
Perhaps he will gain some votes from such people as a result, but isn't he in the process losing respect from people whose goodwill he needs?

Maybe Abbott wasn't so wrong after all:

The federal government's superannuation plan is more far reaching than that forecast by Treasurer Wayne Swan and the Minister for Financial Services and Superannuation, Bill Shorten.

Retirees with far less than $2 million in superannuation face extra tax bills after the superannuation changes announced on Friday.

An examination of the federal government's announcement shows the impact will be far broader than the forecast that only 16,000 people with $2 million or more in super will be hit by the tax on retirement earnings.

Read more from SMH: Super plan contains a booby trap

 

[Intrinsic Value]

Maybe Abbott wasn't so wrong after all:



Read more from SMH: Super plan contains a booby trap

Well I still think that it was only a matter of time before the tax free income for those in the pension phase was changed.

You really cant have retirees generating income of 100k and more a year tax free whilst the rest of working population is being slugged so heavily. These same older people will also be using the hospital and medical system heavily which will also be subsidised by the younger generation. And of course there is a whole lot of baby boomers ready to join the ranks of pensioners over the next 10 years or so it was never going to be a sustainable policy over the long haul.

I can see that this will be further tightened in the years to come with the tax free component being whittled back to align perhaps with the average wage.

And for all those bashing Labor remember it was Howard who brought in all these unsustainable policies and Abbott was also a member of his cabinet at the time if I am not mistaken. The next axe will have to fall on some other of these expensive middle class welfare handouts bought in by Howard to buy votes.

 

[ASICK]

... You really cant have retirees generating income of 100k and more a year tax free whilst the rest of working population is being slugged so heavily. These same older people will also be using the hospital and medical system heavily which will also be subsidised by the younger generation. And of course there is a whole lot of baby boomers ready to join the ranks of pensioners over the next 10 years or so it was never going to be a sustainable policy over the long haul. ...

Why not? Those "same older people" will most probably not be using the hospital system because they'll most probably be privately insured. First superannuation was all about providing a future outside the public purse, now it's about superannuation supporting the public purse: socialism.

 

[nulla nulla]

You really cant have retirees generating income of 100k and more a year tax free....

I find it amazing that the "retiree generating $100k per anum" is being targeted for tax penalties. The assumption being a retiree with $2,000,000.00 of investments is generating 5% per annum income.

What about the retiree taking it up to the market and working his/her $400,000.00 generating returns of 25% or better? Why should they be penalised?

It is not as if they are salary sacrificing $25,000.00+ from a big executive pay packet to boost their smsf. They are at the market face every day trying to maximise their smsf pool so that they will not have to rely on a pension. Don't they deserve the tax breaks that Keating and Costello set up?

 

[Intrinsic Value]

I am one of those people badly hit by limiting the salary sacrifice to 25k for over fifties which I think is a bad policy because many like me had low super balances because we came late to the super game and also never had the large incomes til later in the working life.

However the tax free element for the pension phase is another issue and I will certainly take advantage of it if it is still around which I doubt by making some lump sum payments into super just before I retire.

But you cant say it is either fair or equitable. People have had the benefit of a low tax environment going in and in the accumulation phase as well and then making the whole lot tax free on retirement well it just wont wash because we wont be able to afford it no matter what govt is in office.

 

[FlyingFox]

[
...
Yes gg, labor will raid those who are successful to pay for those who are hopeless (or unfortunate).

As apposed to raiding those that were born later to fund those that were born earlier and therefore having the largest voting block?

The Coalition will do the same in due time as this a question of sustainability not policy. Maybe they'll use the money for something else but they will do it.

And for all those bashing Labor remember it was Howard who brought in all these unsustainable policies and Abbott was also a member of his cabinet at the time if I am not mistaken. The next axe will have to fall on some other of these expensive middle class welfare handouts bought in by Howard to buy votes.

+1. And we are discovering how hard it is to wind any handouts/entitlements back.

Why not? Those "same older people" will most probably not be using the hospital system because they'll most probably be privately insured. First superannuation was all about providing a future outside the public purse, now it's about superannuation supporting the public purse: socialism.

Privately insured is only above medicare. I think you stated it exactly. Super is meant to provide a future; it is not meant to be used as a tax avoidance system for the wealthy.

For all those who argue that this will stop the high income earners from saving etc, here is some evidence to the contrary:

http://obs.rc.fas.harvard.edu/chetty/ret_savings.html

 

[sptrawler]

IMO It is just Labor Party garbage as per usual.
They say they are in there for the 'little guy' they say the fat cats have $2m in super.

What they fail to say is, as Noel Whittaker pointed out, Nicola Roxon retires at 45 next year on a penssion equivelent to a super fund of $4million.

Then when you read other reports, she won't lose any pension untill it's above approx $180,000. Also she can access it at 45 years old, it's government gauranteed and indexed for life.:1zhelp:

Apparently our super is unsustainable.lol,lol,lol

Give me a break, nothing better than dividing and ruling. Cheers

Why not just put $4million in her super and say right you sort it, rather than us having to? At least then she has to wear her legacy.

I'm not bashing pollies, just think if they are going to demonise 'fabulously wealthy' they should be measured by the same definition.

 

[Judd]

...First superannuation was all about providing a future outside the public purse, now it's about superannuation supporting the public purse....

Really? Where has that ever been officially stated apart from the urban myth? The SGC was introduced in 1992 with a view that when it reached a "mature" level, it, together with the Age Pension, would provide the opportunity for people on low to average wages with an average working life of 35 years to have a substantial replacement of their income. At least that is what is contained in the Explanatory Papers to the Bill.

As for additional superannuation, it was not as far as I am aware, intended to be used as a tax haven but as the tax-assisted voluntary part of the superannuation system. Generous tax concessions encourage and assist those with saving capacity to provide for their retirement.

The crux of the issue is that the tax concessions are being used/abused by some who do not need it to have an reasonable retirement income. The balance between encouraging people to save for retirement via superannuation and superannuation being used as a tax haven is what is at issue.

I don't necessarily agree with the way this Government has gone about it which I think smacks of being ham-fisted and playing politics rather than reasoned policy but I do understand the concern.

Disclaimer: I have pulled everything I can out of the superannuation system as I don't need it in order to provide for my needs.

 

[sptrawler]

Disclaimer: I have pulled everything I can out of the superannuation system as I don't need it in order to provide for my needs.

I am sure many others will be following your lead.

 

[Julia]

Maybe Abbott wasn't so wrong after all:
Super plan contains a booby trap[/URL]

No booby trap. I have no interest in defending the government, but the cgt issue mentioned in that article was not disguised.

Question for you sails, gg, and anyone else who is saying the recent announcement is unfair:
do you really think it's fair for people to be taxed at only 15% on the way in to Super, 15% in the whole of the accumulation phase, and then nothing at all thereafter once pension phase is entered?

I know when I first learned about that, I couldn't believe it.
Perhaps it's the 'thin edge of the wedge' in which case we have reason to be concerned, but on face value of what has been announced it seems to me to be simply addressing a tax dodge of the reasonably wealthy who would otherwise have still accumulated sufficient funds to fund their own retirement anyway.
Further, they will not be people who would have even considered voting Labor.

Well I still think that it was only a matter of time before the tax free income for those in the pension phase was changed.

Agree.

You really cant have retirees generating income of 100k and more a year tax free whilst the rest of working population is being slugged so heavily. These same older people will also be using the hospital and medical system heavily which will also be subsidised by the younger generation.

Yes. To suggest that private health cover will entirely remove any dependence on the public health system is fallacious. Certainly private cover is well worth while for elective surgery like knee replacements etc., but to imagine it will be the first recourse in, say, cardiovascular emergencies, acute illnesses etc, is not reasonable.

And of course there is a whole lot of baby boomers ready to join the ranks of pensioners over the next 10 years or so it was never going to be a sustainable policy over the long haul.

And according to most published stats, most of these new retirees are not going to be self funded so will be drawing on at least a part government pension.

IMO It is just Labor Party garbage as per usual.
They say they are in there for the 'little guy' they say the fat cats have $2m in super.

What they fail to say is, as Noel Whittaker pointed out, Nicola Roxon retires at 45 next year on a penssion equivelent to a super fund of $4million.

Then when you read other reports, she won't lose any pension untill it's above approx $180,000. Also she can access it at 45 years old, it's government gauranteed and indexed for life.:1zhelp:

Of course that's true. But you can't base a whole of system policy on what a few politicians get.
Is their situation fair and reasonable? No, of course not. But you cannot conclude, ipso facto, that therefore such inequities continue to prevail across the wider population.
The obvious answer is to address the over-generous situation for politicians. I think some steps have been taken toward this, but I'm not sure what.

Apparently our super is unsustainable.lol,lol,lol

Do you believe the present system, especially considering the demands on the age pension and public health systems by the incoming baby boomers, is genuinely sustainable into the future?

 

[sptrawler]

Do you believe the present system, especially considering the demands on the age pension and public health systems by the incoming baby boomers, is genuinely sustainable into the future?

Firstly, let's not forget, the loss of tax is on savings that prior to compulsory super, wasn't there and wouldn't be there now. It is a percieved loss of tax.

As has been pointed out if like this year, where there has been a 30% rise in the equity market, it will affect people with $500 _ $1m in super.
What Obama is suggesting is probably more sensible, where there is a cap placed on super balances.

To tax a fund in the pension phase will cause a more rapid errosion of the capital, when people are not in a position to replace it.
Therefore if another once in a lifetime happens (which seem to happen every 5 or so years) it will just push a larger number of self funded onto welfare. It is dumb IMO

They would be far better taxing pensions above $100k at 15%, that wouldn't erode the capital as quickly.IMO
Also it would capture the pollies with the same rules and save a lot of paperwork with smoke and mirrors.

Let's be honest what they are suggesting isn't about sustainability, it's about maximising returns of tax while minimising effect on them.

 

[banco]

Firstly, let's not forget, the loss of tax is on savings that prior to compulsory super, wasn't there and wouldn't be there now. It is a percieved loss of tax.

As has been pointed out if like this year, where there has been a 30% rise in the equity market, it will affect people with $500 _ $1m in super.
What Obama is suggesting is probably more sensible, where there is a cap placed on super balances.

To tax a fund in the pension phase will cause a more rapid errosion of the capital, when people are not in a position to replace it.
Therefore if another once in a lifetime happens (which seem to happen every 5 or so years) it will just push a larger number of self funded onto welfare. It is dumb IMO

They would be far better taxing pensions above $100k at 15%, that wouldn't erode the capital as quickly.IMO
Also it would capture the pollies with the same rules and save a lot of paperwork with smoke and mirrors.

Let's be honest what they are suggesting isn't about sustainability, it's about maximising returns of tax while minimising effect on them.

I think with all that you still managed to avoid saying whether the current policy settings are sustainable.

 

[Garpal Gumnut]

I take all your points Julia but will still fight against an ALP Government retrospectively changing the rules on my Super.

I have had very few sick days in a work life of nearly 40 years, and when I was sick for longer than a month, had sickness insurance, which I paid for, to tide me over.

I resent an ALP Government strapped for cash taking MY MONEY, for mine it is, to get themselves out of a political hole.

Second rates like Wong, Swan and Roxon retiring on $200,000 a year from the age of 45 indexed for life is obscene, and it is not good enough to say it will be addressed. It is obscene.

And I do think it is fair for people to be taxed at only 15% on the way in to Super, 15% in the whole of the accumulation phase, and then nothing at all thereafter once pension phase is entered.

Because that is what we were promised.

And what the muppet ALP don't realise is that retirees will spend that money when they retire, on goods and services that younger people provide.

However if it becomes an ageist war, as the ALP Government are trying to make it, they won't.

I can live on $20,000 as well as $100,000

Like many of my generation I was poor, and living poor doesn't faze me, it is not a problem.

However for the muppet retirees with their funeral insurance, grey nomad caravans, Landcruisers, accident, glass, roof maintenance, falling over and all the other crap accoutrements of retirement it will.

And the economy will suffer.

gg