Superannuation, the ultimate government cash cow?

[sptrawler]

From 2017, worth a read, see how you are travelling.

https://www.news.com.au/finance/sup...y/news-story/ba09fe5f47f69202aa53deeb279b01d6

 

[willy1111]

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.

And this is because of the way Superannuation is taxed.

Change the Superannuation tax rates once preservation age is reached - make the earnings taxable at the same progressive tax rates as the individual marginal rates.

No need to fiddle with franking credit refunds and create carve outs for these people and those people but not those people.

 

[Knobby22]

From 2017, worth a read, see how you are travelling.

https://www.news.com.au/finance/sup...y/news-story/ba09fe5f47f69202aa53deeb279b01d6

Not true! Only need about 350k from memory.
Get part pension, health card, live on $1000 per week for the rest of your life indexed. Self interest makes the super industry want to scare people.
There's plenty of info out there and books supporting this.
Latest book is called Don't Panic.
by Nick Bruining.

Seriously for people still working...
Don't be conned into living a miserable or miserly life. Don't be conned into dodgy or risky financial decisions by these sharks.

Also another common lie, the government can't afford the rising cost of pensions. In fact as a percentage of GDP the cost is reducing. Don't believe News Corp. They serve other interests not yours.

 

[basilio]

I thought this was particularly good summation of the current hubris over tax refunds for superannuates.

"....the one issue to arouse any passion is the spectacle of the most well-off among our retired screaming to high heaven over the proposal that, though granted the concession of paying no tax on income from superannuation, they should no longer receive tax refunds as though they were paying it. " Ross Gittins

 

[willy1111]

I thought this was particularly good summation of the current hubris over tax refunds for superannuates.

"....the one issue to arouse any passion is the spectacle of the most well-off among our retired screaming to high heaven over the proposal that, though granted the concession of paying no tax on income from superannuation, they should no longer receive tax refunds as though they were paying it. " Ross Gittins

But as the beneficial owners of the companies, they are paying it.

Why is the franking credit included in their taxable income if they are not paying it?

I imagine there would be quite an uproar from the low to middle income earners if a minimum 30% tax was applied to all income sources from the first $1 like what is being proposed with dividend income.

 

[Smurf1976]

"....the one issue to arouse any passion is the spectacle of the most well-off among our retired

The big lie in this whole debate is Labor presenting it as something which only affects the most well off in society.

They fail to mention that high income earners retain full benefits, zero change, and it's those on lower incomes plus those who use creative tricks to avoid tax which are about to be hit rather hard.

Nobody's going to argue about those using clever tricks being hit but I fail to see a valid argument for removing a benefit paid to lower income earners whilst retaining it in full for those on a higher income. Doing so is just an incredibly lazy way of fixing one problem whilst ignoring the consequences of doing so. It's akin to cutting the road toll by simply banning cars.

The media is much to blame here. If we had any decent journalists these days then we'd be having a "GST birthday cake" moment over that point. At least John Hewson had enough integrity to admit he couldn't answer the question when that one came up rather than fumbling something or changing the subject - credit where it's due, both sides had more integrity back then.

 

[SirRumpole]

Nobody's going to argue about those using clever tricks being hit but I fail to see a valid argument for removing a benefit paid to lower income earners whilst retaining it in full for those on a higher income. Doing so is just an incredibly lazy way of fixing one problem whilst ignoring the consequences of doing so. It's akin to cutting the road toll by simply banning cars.

What Labor should say is this

"if you want to claim a franking credit rebate, then tell the ATO what your real income is (inclusive of tax exempt income), and if it's greater than $80k (say) then you don't get a rebate, otherwise you will".

 

[Smurf1976]

What Labor should say is this

"if you want to claim a franking credit rebate, then tell the ATO what your real income is (inclusive of tax exempt income), and if it's greater than $80k (say) then you don't get a rebate, otherwise you will".

Seems perfectly reasonable to me and I wouldn't be complaining.

Only thing I'd add is the $80K should be set with reference to something (eg average wages etc or something like that) and adjusted automatically so as go avoid "bracket creep" over time.

 

[sptrawler]

The big lie in this whole debate is Labor presenting it as something which only affects the most well off in society.

They fail to mention that high income earners retain full benefits, zero change, and it's those on lower incomes plus those who use creative tricks to avoid tax which are about to be hit rather hard.

Nobody's going to argue about those using clever tricks being hit but I fail to see a valid argument for removing a benefit paid to lower income earners whilst retaining it in full for those on a higher income. Doing so is just an incredibly lazy way of fixing one problem whilst ignoring the consequences of doing so. It's akin to cutting the road toll by simply banning cars.

The media is much to blame here. If we had any decent journalists these days then we'd be having a "GST birthday cake" moment over that point. At least John Hewson had enough integrity to admit he couldn't answer the question when that one came up rather than fumbling something or changing the subject - credit where it's due, both sides had more integrity back then.

The problem is smurph, you will only convince those who aspire to become self funded, the unfairness of the policy.
The majority will never become self funded, therefore they just see it, as more money to fund their welfare.

 

[willy1111]

What Labor should say is this

"if you want to claim a franking credit rebate, then tell the ATO what your real income is (inclusive of tax exempt income), and if it's greater than $80k (say) then you don't get a rebate, otherwise you will".

And what labour are really saying is

"If you have investments in shares, we think you are rich and therefore you should pay a minimum 30% tax on any income you derive from that investment so we can give it to those that don't have investments, actually no we need it to pay for schools and hospitals that sounds better."

 

[Humid]

The big lie in this whole debate is Labor presenting it as something which only affects the most well off in society.

They fail to mention that high income earners retain full benefits, zero change, and it's those on lower incomes plus those who use creative tricks to avoid tax which are about to be hit rather hard.

Nobody's going to argue about those using clever tricks being hit but I fail to see a valid argument for removing a benefit paid to lower income earners whilst retaining it in full for those on a higher income. Doing so is just an incredibly lazy way of fixing one problem whilst ignoring the consequences of doing so. It's akin to cutting the road toll by simply banning cars.

The media is much to blame here. If we had any decent journalists these days then we'd be having a "GST birthday cake" moment over that point. At least John Hewson had enough integrity to admit he couldn't answer the question when that one came up rather than fumbling something or changing the subject - credit where it's due, both sides had more integrity back then.

I wonder how many people who are affected by this actually voted for Labor in the last election?
I would suggest not many and the same again this election.......see how it works

 

[sptrawler]

I wonder how many people who are affected by this actually voted for Labor in the last election?
I would suggest not many and the same again this election.......see how it works

Like I said a while ago Humid, it will keep the working man in his box, just like the U.K.
have a think how you will generate enough investment income, to become self funded when you stop work, you either generate it from shares or from property.
Labor is shutting both doors for the blue collar worker, you may think it is great, I think it is sad for the working person.
Time will tell, but as has been proven time and time again, there is no one better at keeping the working man down than himself.
That is why Labor get away with it, they know from experience, how gullible and apathetic the worker is from experience as union organisers.

 

[qldfrog]

So back to my 50pc idea.once 50pc of society is on welfare, the left is ensured of perpetual power by taxing to death the 49pc minority and" redistributing" the proceeds..
I think we can all agree that for people who have paid super but not yet accessing it, the title of this thread is quite accurate, and it becomes clearer year after year

 

[sptrawler]

So back to my 50pc idea.once 50pc of society is on welfare, the left is ensured of perpetual power by taxing to death the 49pc minority and" redistributing" the proceeds..

They will sit and tell you how unfair it all is, while scratching their ar$e, then putting their hand out. Is there any wonder Australia's going down the chute.

 

[Smurf1976]

Like I said a while ago Humid, it will keep the working man in his box, just like the U.K.

.......

Labor is shutting both doors for the blue collar worker, you may think it is great, I think it is sad for the working person.

You've hit the nail on the head. Everyone, blue collar and lower level white collar workers* in particular, kept in their place.

Lower level white collar - that's anyone in an office who isn't an actual lawyer, doctor, executive or otherwise earning substantially over $100K or in other words it's most white collar workers.

Add them to the blue collar workers and that's most of the Australian workforce - the ordinary people who leave home in the morning and walk to the train station to head into the CBD or who get in their ute / truck / van and drive to the job site. Everyone from nurses to bus drivers to tradies to administrative workers are affected.

Those for whom it's not a problem = highly paid professions, executives, celebrities, senior politicians, anyone else with an unusually high income.

 

[Humid]

Like I said a while ago Humid, it will keep the working man in his box, just like the U.K.
have a think how you will generate enough investment income, to become self funded when you stop work, you either generate it from shares or from property.
Labor is shutting both doors for the blue collar worker, you may think it is great, I think it is sad for the working person.
Time will tell, but as has been proven time and time again, there is no one better at keeping the working man down than himself.
That is why Labor get away with it, they know from experience, how gullible and apathetic the worker is from experience as union organisers.

Remember penalty rates
The liberal con is getting people to believe their something their not
Sound familiar
Bloody unions like at wheatstone 235k a year and barrow 250+ pa lol
I did 3 at barrow 2 at wheatstone
Not bad for a tradie

 

[sptrawler]

Remember penalty rates
The liberal con is getting people to believe their something their not
Sound familiar
Bloody unions like at wheatstone 235k a year and barrow 250+ pa lol
I did 3 at barrow 2 at wheatstone
Not bad for a tradie

Unfortunately there isn't a job for everyone there, but if you're in the loop good for you, use the money wisely.
I think it is great when a blue collar worker, breaks through the glass ceiling, just don't blindly follow what your told, think things through.

 

[sptrawler]

AustralianSuper declares war on SMSFs

AustralianSuper chief executive Silk will today call for a clampdown on self-managed super in response to the Productivity Commission's finding that SMSFs with less than $500,000 tend to perform "significantly worse" than regular super funds.

Mr Silk, who runs the nation's biggest super fund with $145 billion under management, will tell the Conference of Major Super Funds on the Gold Coast that an inquiry is needed into SMSF performance, and that the probe should lead to a "revamped and smaller SMSF sector" with tighter regulatory safeguards.
I re posted one of Ann's posts here.

It will be hard for any SMSF to perform better than a retail or industry fund, if Labor give the SMSF a 30% handicap, therefore all SMSF would be forced over.
One of my mates has a SMSF, he sold a block of land and put the money into his fund, he only puts it in term deposit and draws the minimum. He isn't beating anyone, but he sleeps well, he has plenty of holidays and it is his money.
Why should he be forced to give his money to someone else?
This will all end badly for people. IMO
My guess is the middle class will vanish, there will be the rich and the poor, like most places.
What makes Australia unique is about to disappear.IMO time will tell.
Dramatic? Maybe, but let's wait and see.

 

[HelloU]

??
i did not talk to silk bloke so not sure .................. but the recent prod comm review was about apra regulated stuff (industry and retail fee paying stuff), not smsf ato stuff. i dunno if they even mentioned it but not gunna check.

my gut feel is silk would not talk like this.

 

[Bill M]

Mr Silk, who runs the nation's biggest super fund with $145 billion under management, will tell the Conference of Major Super Funds on the Gold Coast that an inquiry is needed into SMSF performance, and that the probe should lead to a "revamped and smaller SMSF sector" with tighter regulatory safeguards.

Now why on earth would he say that? It has nothing to do with his Industry Super Fund style. Like you said SP, some people choose to have a SMSF because they would rather pay $1,000 a year in fees for a portfolio full of term deposits and they know and are happy with earning less. Some people don't want any risk.

The thing Mr. Silk (if he said that) needs to realise is that Industry Super funds charge much higher fees for large accounts and pay way less for cash deposits. So why should anyone be happy with 1.5 to 2% for cash when they can get 2.6% with term deposits in a SMSF with much less fees?