Noel Whittaker on tax cuts, super and state governments

Personal finance wizard Noel Whittaker gives his thoughts on what lies ahead for over-50s, sneaky moves in the Federal Budget and what you should never overlook.

YourLifeChoices: What does the next financial year hold for older Australians given announcements in the Federal Budget?

Noel Whittaker: There will be an election for sure and my spies tell me that it will probably be in October, but who knows?

What was strange in the May Federal Budget was that the changes made were for July next year, not this year.

Also, a sneaky one was that they said anyone can contribute to super until age 67, but from next year, you can contribute to age 75 but without the work test. Now that is fine for after-tax non-concessional contributions, but the tax-deductible concessional ones can only be made by salary sacrifice for those over 67, which means they must be made by your boss! So, if they need to be made by your boss, you need to be working. A little sneaky, I think.

What is the biggest concern you have for over-50s in the current environment?
Well, I think we are a group that just ‘hangs in there’, but my key concern is that people find retirement complex – particularly the interaction between tax, Centrelink, superannuation and aged care.

Read more: Ageing populations an asset: report

And I understand 50 per cent of people still don’t have a will. I have tried to address all these issues in my new book, Retirement Made Simple, because people don’t know what they don’t know.

What are the key things you would like to ensure people are considering when they are planning for retirement?
First, a basic principle is that how long your super will last depends mainly on the rate of return you can get. It’s paramount that people are in well-performing super funds

Also, have all your important documents in a safe place. By this I mean enduring power of attorney, your will and your advanced healthcare directive. Make sure you have them in a safe place and that your family know where they are.

What are your thoughts on the schemes to use equity in your house?
There are only three options – sell, take out a reverse mortgage or get into an equity release scheme. Reverse mortgages are fine in the right circumstances, but more people are moving to land lease communities and retirement villages, which are not eligible for reverse mortgages. The other reverse mortgage scheme is the Pension Loans Scheme from the government, but again you need to own a free-hold property to be involved.

If you were financial king of Australia, what would you do?
1. I am a big fan of compulsory super because a lot of people can’t handle money well, so I would definitely increase super to 12 per cent.

2. Abolish state governments.

3. Raise GST to 15 per cent.

4. Bring forward tax cuts with the top rate of 30 per cent.

Read more: How public trustees can help you

Which country do you look at and think, ‘Why can’t we do that?’
Probably New Zealand – no payroll tax, no stamp duty and no capital gains tax. The small population helps but the top tax rate is 33 per cent and the GST is 15 per cent.

What is the best place to start for people who are looking ahead now?
They should read my book, Retirement Made Simple, because that sets it all out. I also recommend a book called Avoiding the Ageing Parent Trap by Brian Herd, which really got to me. The whole landscape can change in seconds, but the more you know about it, the more you can plan.

For more information or to buy Retirement Made Simple, or any of Noel’s other books, go to

What is your main worry about retirement? Do you find the system too complex? What would you do if you were financial king/queen for a day? Have your say in the comments section below.

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Disclaimer: All content on the YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

Written by YourLifeChoices Writers

YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.

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