Superannuation, the ultimate government cash cow?
- Thread starter drsmith
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Is it poor,lazy or safe investment or all of the above
Seems either way your initial investment is going backwards
Knobby22
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The last line sums it up.
"I think the best way to fix it would actually be proper reform of the superannuation system," he said.
Like I've said, if they want to tax the super pension, do it in a sensible manner.
Not this half ar$ed botch up, last election Labor were going to tax pensions above $100k, this election stop franking credits.
They haven't got a clue, that is the problem and why they end up shooting themselves in the foot every time, they couldn't organise a piss up in a brewery.
Brain Farts.
Knobby22
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Libs got a report done in 2016 (David Murray)on how to fix the Super system, when it came out ScoMo said they would do it. What happened? If they actually had a plan it would help them get re-elected.
Another article on the ABC, the second guy Steve Taylor isn't you is it sptrawler?
https://www.abc.net.au/news/2019-02...the-end-of-franking/10815854?section=business
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No it isn't me Knobby, but I agree with him, it just doesn't make sense what is being proposed.
Super does need changing, it will become unaffordable, especially when the younger group come through with a lot more funds in super.
So it needs to be looked at holistically, so that the changes make it sustainable and people can have confidence in the system being fundamentally the same when they get to retirement.
What Labor are doing, is cherry picking bits and pieces ad lib to facilitate their budget, as can be seen by the different proposals every election. It isn't as though they have thought it through, or the suggested changes would stand the test of time.
The only logical system, is to have a progressive tax scale for super pension incomes, which at high incomes then aligns with the working persons tax scale, to discourage saving excess amounts as there would be no advantage.
Anyway Labor are looking as though they will implode, before the election, too many tax grab policies on a falling economy. IMO
I think Bill will be doing more back flips, than a circus tumbler, soon.
Time will tell, at least it wont be boring.
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Yeah quite interesting.
The key point about industrial scale rorting of the franking credits scheme doesn't ever seem to be fully explained. Has anyway identified the spread of people/companies using franking credits and who is behind them? If one could identify particular companies or persons claiming a taxable income of < $18k PA but receiving $300k in franking credits refunds it would be a compelling argument.
I can see the point of a more thoughtful overhaul of the super scheme to fix the problems in a better way.
BUT given the lies and screams coming from the creatives in finance and the trotting out of the lower end of retirees as victims of the current proposal, what would be the response to an even broader review ?
Nuclear would be the best word.
As I see it ending the franking credits rort is a single clear action that will have a major impact on the use of questionable processes to generate billions of dollars of tax payers refunds to those astute enough to take advantage them. After that perhaps those in the industry would be interested in a broader review. It could help those at the lower end of the self funded retirees scale. Whatever.
Can you please explain to me with a worked example that contains actual numbers how this is possible?
Knobby22
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The government knows. They have to pay the millions of dollars to certain individuals.
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How could that happen? So the dividend not income
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Maybe you could suggest how that would work?
Take 30% of their income off them, then come up with a way to help them, maybe welfare. lol
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When I filled in a tax return, I had to add my dividends and franking credit to my taxable income, then the tax payable is worked out on that sum.
Then the franking credit is removed, well that is my memory of it.
So how someone can get millions back, is weird to me.
A pension is not income, it should not be taxed.
A pension is a withdrawal from ones Superfund account.
Taxing a pension would be like taxing individuals everytime they make a withdrawal from their bank account.
It is only the interest that is taxed and likewise only the earnings of the Superfund perhaps should be taxed in pension phase rather than the current 0% tax.
Is it going to the individuals? Or to the Superfund?
I agree with the view of Chris Richardson, the taxation of Super earnings once preservation age is reached would be a better way of addressing this issue.
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Yes my bad, I was meaning earnings, not withdrawals.
The problem with taxing withdrawals would be, the tax would increase as the minimum drawdown increased with age.
It would have to be on what the fund is earning, of course.
Knobby22
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To superfunds in an individuals name.
They have tightened the laws now (bad luck gen x and y) but there are individuals with tens of million dollars worth of shares in superfunds getting the 30% franking return on top of the dividend.
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Industrial scale, companies doing it. Isn’t there caps on super balances or something,
If you getting 300k in credits, thats like 700k in dividends?
If you getting 300k in credits, thats like 700k in dividends?
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Rolled a bit of bank bashing into that one.
Really the mining tax is the best bet for raising tax money.
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