Why are they reducing super limits?

[So_Cynical]

So Cynical - is that figure $488K the average super at 51? Or something else?

Average of all SMSF accounts...not by age though figures by age bracket would be interesting...also of interest is the fact that SMSF's have over 1 third of all super moneys while representing only 3% of the total number of super accounts....talk about the rich getting richer.

 

[Knobby22]

Average of all SMSF accounts...not by age though figures by age bracket would be interesting...also of interest is the fact that SMSF's have over 1 third of all super moneys while representing only 3% of the total number of super accounts....talk about the rich getting richer.

Thanks - interesting.

 

[Julia]

Average of all SMSF accounts...not by age though figures by age bracket would be interesting...also of interest is the fact that SMSF's have over 1 third of all super moneys while representing only 3% of the total number of super accounts....talk about the rich getting richer.

Unless we're talking about the average balance at a particular age group, such a figure is imo pretty meaningless. Obviously someone in their early 20's will not have accumulated as much as someone at or close to retirement.

And to roll your eyes and make a snide remark about the rich getting richer smacks of simple envy.

Much of the population could easily increase their wealth, and could engage in a SMSF, if they simply took responsibility to educate themselves financially and make their own decisions. Instead, a significant portion of the non-wealthy spend their time whining about how badly their public Super is doing.

OK, yes it's doing badly. So get off the proverbial and do something about it.

The financial successful are those who work to make it so and are not prepared to accept a passive role.

 

[So_Cynical]

Unless we're talking about the average balance at a particular age group, such a figure is imo pretty meaningless. Obviously someone in their early 20's will not have accumulated as much as someone at or close to retirement.

And to roll your eyes and make a snide remark about the rich getting richer smacks of simple envy.

I thought the multi eye roll and "rich getting richer" comment was well justified based on the numbers...approximately 33% of the total dollar value held within all super funds are held in just 3% of SMSF's ~ 400 billion getting taxed at 15% or 0 depending on the age of the members...its a massive tax rort conducted by the people who can most afford to pay tax.

 

[medicowallet]

The question also needs to be asked about

indexation of the contribution limits....

I have been doing the maximum, but unfortunately, slowly, this is being eaten up by inflation.

Labor, one effective way to ensure everyone remains poor.

Wake up some posters, we always need incentives for people to make it for themselves, not barriers, as people being motivated drives productivity.

 

[freddy2]

Because rich people have been taking advantage of the generous tax concessions for many years and by greatly reducing the contribution limits the Govt hopes to levels the playing field somewhat and help the people who need it the most....not greedy rich people who have too much money anyway?

This is the correct answer.

The superannuation system in Australia is basically the lower and middle classes getting fleeced by the financial services industry while the rich exploit super to lower their tax bill. For those who are complaining about the contribution limits there is nothing stopping you from saving for your retirement outside of superannuation.

 

[Junior]

This is the correct answer.

The superannuation system in Australia is basically the lower and middle classes getting fleeced by the financial services industry while the rich exploit super to lower their tax bill. For those who are complaining about the contribution limits there is nothing stopping you from saving for your retirement outside of superannuation.

Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions. I fail to see how it's 'confined to the rich'.

You can establish an SMSF and take matters into their own hands if you are concerned about being fleeced. You don't need a large balance.

 

[Julia]

Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions. I fail to see how it's 'confined to the rich'.

You can establish an SMSF and take matters into their own hands if you are concerned about being fleeced. You don't need a large balance.

Exactly.

 

[freddy2]

Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions. I fail to see how it's 'confined to the rich'.

The lower and middle class have far less capacity to salary sacrifice and to do so comes at a far higher cost to their standard of living. A dollar today for these people is worth far more than it is to the rich. I would suggest learning about "diminishing marginal utility".

You can establish an SMSF and take matters into their own hands if you are concerned about being fleeced. You don't need a large balance.

In theory yes, in practice no for most people. Most people have neither the time, skill or knowledge to do so. What you are arguing is that people that are being forced to into a situation (ie super) deserve to be fleeced unless they spend a lot of effort not to be taken advantage of.

 

[Julia]

In theory yes, in practice no for most people. Most people have neither the time, skill or knowledge to do so.

I accept that not everyone is going to have the capacity to do this, but dispute that it's the majority. I know plenty of people, intelligent, well educated, successful in quite demanding careers, who agree that they should spend some time educating themselves and taking charge of their own financial outcomes, but they just 'don't get round to it'. It is not lack of time. We can always make time for what is important to us.
None of us were born with some sort of inherent financial ability. We've all had to acquire basic financial literacy. It's not that difficult.

What you are arguing is that people that are being forced to into a situation (ie super) deserve to be fleeced unless they spend a lot of effort not to be taken advantage of.

No, what I'm suggesting is that sufficient competence to run one's own SF is not that difficult to achieve. There is plenty of education freely available.
But hey, it's certainly easier to just sit back and whine.

 

[todster]

But hey, it's certainly easier to just sit back and whine.[/QUOTE]

bit like politics

 

[So_Cynical]

Anyone earning a salary can 'exploit super to lower their tax bill' by making salary sacrifice contributions. I fail to see how it's 'confined to the rich'.

Dude seriously...you cant see how someone on 200K a year has 4 times the potential to pay money into anything when compared to someone on 50K?..you seriously cant see how that works?

There are some dozzy posts getting made in this thread.

 

[tech/a]

This is the correct answer.

The superannuation system in Australia is basically the lower and middle classes getting fleeced by the financial services industry while the rich exploit super to lower their tax bill. For those who are complaining about the contribution limits there is nothing stopping you from saving for your retirement outside of superannuation.

" Outside of Surerannuation"
Smart and wise comment.

Get yourself in the position of "Rich" outside of super
Do as Julia says and educate yourself.
Invest serious money for serious return.
Above all educate yourself on risk and mitigation of risk.

Something you can avoid far easier than pretty well all super funds managed or self managed I know of.

It's far easier the earlier you start creating your nest egg outside of Super.

 

[Junior]

Dude seriously...you cant see how someone on 200K a year has 4 times the potential to pay money into anything when compared to someone on 50K?..you seriously cant see how that works?

There are some dozzy posts getting made in this thread.

Yes, I can see how a high income earner has an increased ability to contribute towards super, and to reduce their tax liability...because they earn more and pay more tax. Very simple.

My point simply was, that this strategy is not only limited to 'the rich'. i.e. anyone who earns a salary can do this!

 

[medicowallet]

Dude seriously...you cant see how someone on 200K a year has 4 times the potential to pay money into anything when compared to someone on 50K?..you seriously cant see how that works?

There are some dozzy posts getting made in this thread.

But like the average person earning $50k, you fail to ask WHY someone is earning $200k and they are only earning $50k.

Might like to ponder that a for a bit over your evening beers, instead of still being at work, or, as in the case of doctors, training for 13 or so years.

 

[freddy2]

But like the average person earning $50k, you fail to ask WHY someone is earning $200k and they are only earning $50k.

Might like to ponder that a for a bit over your evening beers, instead of still being at work, or, as in the case of doctors, training for 13 or so years.

This is a red herring, no one is arguing whether people deserve a low or a high income. You have not justified having taxation rules that allow high income earners to lower their tax while not giving the same opportunity to everyone else. You might as well argue that 13 years training and having a high income makes it right for doctors to take kickbacks from pharmaceutical companies.

 

[medicowallet]

This is a red herring, no one is arguing whether people deserve a low or a high income. You have not justified having taxation rules that allow high income earners to lower their tax while not giving the same opportunity to everyone else. You might as well argue that 13 years training and having a high income makes it right for doctors to take kickbacks from pharmaceutical companies.

A person who earns $50k has a tax rate of approx 17% (before government handouts/middle class welfare)

A person who earns 200k has a tax rate of approx 32% (before government levies)

So salary sacrificing at 15% tax means that for $25k the high income earner is effectively paying the same amount of tax on that $25k as the $50k earner.

Some prior posters need a reality check for the real world.

WHERE is this advantageous taxation area??? I fail to see it.

If anything it is unfair for a $200k earner to pay $63k + tax for working more than the person who pays less than $8500 per year.

.... awaiting the "we deserve to be subsidised by high income earners" posts by the middle class welfare posters.

Some people make their own "luck", others whine about it.

 

[ginar]

A person who earns $50k has a tax rate of approx 17% (before government handouts/middle class welfare)

A person who earns 200k has a tax rate of approx 32% (before government levies)

So salary sacrificing at 15% tax means that for $25k the high income earner is effectively paying the same amount of tax on that $25k as the $50k earner.

Some prior posters need a reality check for the real world.

WHERE is this advantageous taxation area??? I fail to see it.

If anything it is unfair for a $200k earner to pay $63k + tax for working more than the person who pays less than $8500 per year.

.... awaiting the "we deserve to be subsidised by high income earners" posts by the middle class welfare posters.

Some people make their own "luck", others whine about it.

touche , its amazing how many capitalist socialist traders are out there LMAO ... what an oxymoron ...

 

[freddy2]

A person who earns $50k has a tax rate of approx 17% (before government handouts/middle class welfare)

A person who earns 200k has a tax rate of approx 32% (before government levies)

It's called a progressive taxation system, which all advanced western economies have in one form or another. Perhaps you should learn about it, the benefits as well as the disadvantages.

So salary sacrificing at 15% tax means that for $25k the high income earner is effectively paying the same amount of tax on that $25k as the $50k earner.

Some prior posters need a reality check for the real world.

WHERE is this advantageous taxation area??? I fail to see it.

Reminds me of the quote "None so blind as those who will not see". You do know you pay the same amount of tax on your first $50000 of income as everyone else? You do know what a marginal tax rate is?

If anything it is unfair for a $200k earner to pay $63k + tax for working more than the person who pays less than $8500 per year.

.... awaiting the "we deserve to be subsidised by high income earners" posts by the middle class welfare posters.

Some people make their own "luck", others whine about it.

And some people make mistaken unsubstantiated assumptions that others are "whining". These people don't seem to grasp that it is possible to criticise the unfairness of the taxation system while at the same time benefiting from it. Just because most people in this thread are making self-serving arguments doesn't mean everyone is.

 

[freddy2]

touche , its amazing how many capitalist socialist traders are out there LMAO ... what an oxymoron ...

I guess you missed the irony of someone whose whole profession depends on government interference of their market complaining about government interference in other areas.