Super changes to tax free income

ASFA and Westpac are pushing for limits on tax-free superannuation incomes in retirement.

Super changes to tax free income

The Association of Superannuation Funds of Australia (ASFA) and Westpac are pushing for a limit of around $2.5 million to be set on the amount of tax-free money each Australian can use to fund their retirement.

This restriction would see the amount of tax-free income that can be earned each year in retirement capped at $120,000. This restriction would affect around 70,000 retirees who otherwise receive tax free earnings of over $120,000 from their superannuation.

The research presented in the submission has revealed that there are currently 475 Australians with superannuation balances of over $10 million earning, on average, $1.5 million a year tax free in retirement.

Prime Minister Tony Abbott has suggested his government won’t make any changes to the current superannuation rules, but the Labor party have proposed a policy which would see a $75,000 tax-free limit with any earnings thereafter taxed at the concessional rate of 15 per cent.

Read more from www.afr.com

Opinion: The rich get richer

Now is the time for Tony Abbott to stand up as a Prime Minister. The current superannuation system is flawed in how it rewards the rich in retirement with tax-free incomes, without a cap, and Mr Abbott needs to lead a sensible change to the current law.

A comparison of the current system could be drawn between superannuation contributions and multinationals profit-shifting to avoid tax. Both forms of action are currently legal in this country. Both benefit the top 10 per cent, but there is currently only a focus on the companies that operate from outside our shores.

The submission presented by ASFA and Westpac from the outside look to be reasonably thought out and sensible as a starting point. I would ask whether they actually go far enough when you consider the ASFA Retirement Standard states that a couple requires a retirement income of $58,444 per annum to live a comfortable lifestyle.

It’s clear to see that progress has to be made and a limit needs to be set. Mr Abbott, please, take a look at how unfair the current rules really are and take a stand on behalf of the Australian taxpayer.

What do you think? At what amount should the annual tax-free super income be capped? Is Tony Abbott failing Australians who voted for him by refusing to make changes to the current super rules?





    COMMENTS

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    Chat
    9th Jun 2015
    10:05am
    I cannot understand why anyone would oppose a suggestion that once someone is EARNING over $75,000 tax free anything in excess of that $75,000 should be taxed at the minimal rate of 15%. This isn't about how hard people have worked to get the funds to invest in Super or if it is THEIR money --- it is about earnings on that money. If I was earning $75,000 from my Super I would be very happy to pay 15% tax on anything above that amount.
    LiveItUp
    9th Jun 2015
    10:14am
    I disagree in that one can earn more than $75,000 a year on a super balance of less than $400,000 a year which is not much in super.
    Anonymous
    9th Jun 2015
    10:33am
    How, Bonny? I'm sure a lot of people would love to know how to achieve that much income from just $400,000. Very few with that balance would be achieving that return. I think many with twice that would struggle to get to $75,000 pa.
    LiveItUp
    9th Jun 2015
    10:53am
    Education is the key. The simple fact is that most financial advisors will not tell you about lots of ways of investing because they can't make any money from it.
    Fliss
    9th Jun 2015
    11:23am
    I disagree . . . simply because the rules have always been that income from super'n after a certain age is tax free. Rules shouldn't be changed part way through the game. Many many people have been going without so as that they can put as much into their super fund as possible so as to benefit when they retire. Should not suddenlt now change the game plan on them.
    MICK
    9th Jun 2015
    11:31am
    The answer to your question Chat is that this government is one owned by wealthy Australians and their big business interests. That is why Abbott is pursuing lower company tax rates (the rich own companies) and refuses to touch the superannuation tax shelter (it disproportionally benefits the rich).
    genimi
    9th Jun 2015
    12:23pm
    Fliss, the rules change all the time. tax rules, pension rules, and I don't think the rule has always been that super income is tax free, think it was a rule change to, a few years back.
    Retired Knowall
    9th Jun 2015
    4:16pm
    To get $75000 from $400000 you would need to get a return of 18.75% after fees invested in High Growth/High Risk investment products. Some years you will get that and more in high risk investments, but you will also have years when you will get a negative return. If you look at all of the Super sites you will find that over the last 10 years the best compound growth of their top product returned less than 10%. This type of investment is not recommended for retirees trying to preserve their capital.
    Adrianus
    9th Jun 2015
    4:31pm
    Well Chat I oppose it because it is stupid. It is akin to the Labor 15% contribution tax and the 15% income tax we now have. it defeats the purpose of the exercise. This is another one of those 'great moral dilemmas of our generation' which was introduced in the 1980's and now its being reversed. it achieves nothing.
    MICK
    9th Jun 2015
    5:56pm
    The sort of reply we normally see from you Frank. As normal the word 'Labor' appears in your post.
    Not "wasted" at all. The way to get people into superannuation was to offer them a carrot. The carrot in this instance was a tax deduction. Personally I would have thought just paying the old age pension like nearly all other western countries do should have stayed as it was. In the end only the rich have benefited because the superannuation scheme was intentionally set up to benefit this end of society. The schemes change but the dishonest rorting never does.
    TREBOR
    9th Jun 2015
    6:55pm
    Spot on, mick - the entire scheme was deliberately built with those huge gaping holes that the well-heeled could drive a truck through - so as to benefit politicians themselves and their cronies.
    Anonymous
    10th Jun 2015
    9:30am
    Bonny, why would it matter how much savings someone has? If they are getting more than $75,000 a year in retirement they are well off and can comfortably afford to contribute a tiny amount (and it would be a tiny amount unless their income was VERY high indeed) to the cost of running the country. We are talking about 15% of the income OVER $75,000 a year for a single person. Someone getting $100,000 a year in retirement would pay a measly $3750. Some people thought it acceptable to slug someone receiving only $22,500 a year with a whopping $13,000 a year loss, just because they had some savings. Someone earning $75,000 a year (for a single) would be quickly able to build their savings further.

    A couple can apparently live comfortably in retirement on about $58,000 a year (My husband and I live very well on less than that!) but can earn $150,000 a year tax free, giving them tax free $92,000 a year to add to savings. Anyone complaining about paying 15% on the amount over $150,000 (or $75000 for a single) would be obscenely greedy.

    It might be reasonable to allow losses to be carried forward in the same way businesses are permitted to carry losses forward.
    Anonymous
    10th Jun 2015
    3:56pm
    You are quite correct Knowall. No super fund has paid that money when it is averaged out over ten years. I would be quite happy to get 10%+ on my superannuation.
    To get a big return you have to be in a highly volatile growth fund I would imagine. Not for me.
    Adrianus
    10th Jun 2015
    4:56pm
    Radish, I know how to get 20%. If you can get 10% you can get 20%. However the issue is not the return on the funds it is the yearly draw down pension amount, and the level at which it is taxed. This level is determined by the balance in a members account and the percentile range.
    mogo51
    9th Jun 2015
    10:10am
    I agree Chat, that seems a reason figure and gives retirees a good standard of living and the tax rate still encourages savings.
    LiveItUp
    9th Jun 2015
    10:11am
    I agree with the $2.5 Million limit but not the $120,000 tax free income. I know of super funds that earn more than than on a $500,000 balance a year.

    To me earning 120,000 on $2.5 million is not a very good return.
    Chat
    9th Jun 2015
    10:34am
    Bonny the amount someone has in Super is not the issue. The only relevant issue is Income someone is receiving from the Super and if that exceeds $75,000 per year then I think it is very reasonable for them to then have to pay 15% tax on any income above that amount.
    Anonymous
    9th Jun 2015
    10:34am
    Anyone earning $120,000 a year should be delighted to pay tax, Bonny, unless they are unbelievably selfish, self-serving, and lacking in compassion for the disadvantaged.
    Anonymous
    9th Jun 2015
    10:35am
    Bonny, the figures you're quoting equate to around 24% interest (earnings) on your investment principle, and that's without compounding. This is better than loan shark interest. You are doing VERY well, if this is indeed the case.
    LiveItUp
    9th Jun 2015
    11:06am
    Loan sharks earn 25% on each transaction not per year.
    MICK
    9th Jun 2015
    11:34am
    I'd like to know which super fund earns more than $12 000 on a $500 000 investment Bonny. The return you mention is 5%. Pretty good when you can only get < 4% on bank deposits these days. Only way to improve on that is to take rick and speculate and that has concerns when things go against the script.
    Anonymous
    9th Jun 2015
    11:41am
    Mick, this guy/gal Bonny states a return of $120,000 on a $500,000 balance in his/her comment at 10:11 AM above. You believe that?!
    MICK
    9th Jun 2015
    11:42am
    Mistake methinks Eddie.
    LiveItUp
    9th Jun 2015
    11:44am
    That's why the rich have SMSFs not invest in ordinary super funds where the investor gets back the scraps after everyone else has been paid. Bank deposits are one of the most risky investments one can have in a super fund. With inflation and tax you get a negative real return nearly every year. I'd rather invest in things that appreciate over time myself and use those investment to make further gains.
    MICK
    9th Jun 2015
    11:52am
    Risk/reward Bonny. The 'investments' you mention are firstly unethical and secondly very risky.
    If you want to invest in things which grow in time then you are on a banana skin these days. Property is close to the most expensive in the world. Share market has run a fair way but may still have a few legs. What do you suggest?
    Anonymous
    9th Jun 2015
    1:27pm
    According to the figures only 70,000 people will be affected anyway.

    I would have no problem in paying tax on my superannuation earning if over $75,000 ...not at all.
    Adrianus
    9th Jun 2015
    3:24pm
    It's a lousy return Bonny. Most super funds have returned more than double that in the last year or two.
    MICK
    9th Jun 2015
    6:00pm
    The only thing that counts Frank is the long term return and how it compares to things like real estate, shares and bank interest. Using the last 2 years is like issuing a forecast about winter using the last 2 days after you have 2 warm days. Illogical argument!
    Adrianus
    9th Jun 2015
    6:45pm
    So if you are happy with a long term 4.8% return on a long term investment that ok with me.
    Adrianus
    10th Jun 2015
    7:32am
    Or using the last 50 years of a billion years of climate change?

    9th Jun 2015
    10:36am
    I've been advocating ever since the budget that retirement incomes in excess of a given income level should be taxed. It's about fairness and decency. Everything so far proposed takes from the lower or middle-level, and leaves the rich untouched. Anyone earning $75,000 a year in retirement and unwilling to pay a modest tax on the earnings over that amount is just plain obscenely and disgustingly greedy.

    Actually, I think $75,000 a year for a couple is adequate, and maybe $60,000 for singles.
    MICK
    9th Jun 2015
    11:36am
    I totally agree. So would most Australians. We live on a heck of a lot less than that and travel extensively. So how is $75 000 pa, which is more than the average wageof $58 000, not enough?
    retroy
    9th Jun 2015
    3:00pm
    Who are you, or any one else for that matter, to decide how much of a persons hard earned money is to be taken out of their super balance.
    Why not mind your own business, and let the rich mind theirs.

    You jealous guys obviously do not understand that it is the Govt who makes a person over 70 take out 5% each year even if they do not need, or want that much.

    Stupidgalah is absolutely correct
    Adrianus
    9th Jun 2015
    3:34pm
    Rainey and mick, you do understand that we are discussing the earnings of a super fund? Which obviously is a separate entity and has nothing to do with personal income? Whether personal exertion income or not?
    Your eagerness to attack those who have worked hard and saved has led you to cloud the issue here I think.
    Anonymous
    9th Jun 2015
    3:57pm
    Wrong, Frank. That's precisely the point. We ARE discussing the earnings. Superfunds were set up to fund retirement. Why shouldn't they be used for just that? But not by forcing people to draw savings out to live (as Morrison's recent proposal to tighten the means test will do to some), but rather by taxing that portion of income that is in excess of reasonable needs. Nobody is attacking those who worked hard and saved. Morrison's proposal does precisely that! This proposal simply requires those who are earning more than they reasonably need to live comfortably to contribute to the cost of running the country. And of course they should - regardless of how that income is derived.
    Adrianus
    9th Jun 2015
    4:02pm
    You have no idea do you?
    MICK
    9th Jun 2015
    6:08pm
    retroy: your rant is missing the point: THE RICH HAVE USED THE SUPERANNUATION TAX SHELTER to avoid the real tax system which the rest of society is forced to use. As an Australian IT IS MY BUSINESS and the business of every other Australian.
    Your arrogance is offensive given that you have managed to accumulate a large superannuation only because it is heavily subsidised BY TAXPAYERS.
    Adrianus
    9th Jun 2015
    6:51pm
    mick there is no need to chide retroy because you feel he has more than you!
    TREBOR
    9th Jun 2015
    7:24pm
    Can his ass be chewed if Mick thinks he has less? that OK?

    (just joking)

    Super funds as current were set up so as to ensure that a many as possible would not NEED a pension. Therefore there should always have been an upper limit on any concessions involved. That there was not and is not indicates the culpability (with mens rea) of government in deliberately setting this system up so as to benefit the rich.

    Only now is that becoming clear in Tony's magnum opus :- The End Of The Age Of Entitlement.
    Anonymous
    10th Jun 2015
    9:37am
    Seems Frank is only concerned with protecting the rorts for the rich, and to hell with the country and the majority of citizens. It's called GREED.

    And I'm NOT attacking people who worked and saved, Frank. YOU ARE. I'm saying people who have done extremely well and have way more income than they need should make a fair contribution to the costs of running the nation and not load the entire burden onto people who have less (despite probably working a lot harder!). The have-nots have propped up the greedy haves for far too long and it's time to introduce some fairness into the system.

    $30 billion GIFTED TO THE RICH every year, and Morrison wants to slug the real hard workers and savers who saved a modest amount, but not enough to be self-sufficient, while continuing to obscenely indulge the rich - asking them to contribute NOTHING, but letting them continue to enjoy all the benefits of living in this country without paying their fair dues. It's YOU who has NO IDEA. Or perhaps you are among the greedy, selfish privileged who have this weird notion that it's somehow your right to have it all at no cost and to demand that others - who are less privileged - pay for it?
    stupidgalah
    9th Jun 2015
    10:45am
    Darn.....That little green man is out of his cage again.
    Gra
    9th Jun 2015
    10:48am
    The Labor party proposal sounds very fair to me. Anyone with a Super Fund like that should be more than well set up for retirement and well able to afford to pay tax on income above the $75,000.
    MICK
    9th Jun 2015
    5:48pm
    Many people would agree with that.
    LiveItUp
    9th Jun 2015
    11:12am
    Super is one of the current strategies used by the wealthy at present. Take it away and they will take their money out and the government then has no control over this money. That is why the current government does not want to touch it.
    MICK
    9th Jun 2015
    11:39am
    ???? They can take it out but above $150 000 they will incur tax on lump sum withdrawals.
    So why should governments have control over YOUR super? They are at present trying to take over control of this large pool of capital but lets hope it never happens as they will simply replace the pension with your money whilst they nibble away at the edges. Not pretty.
    LiveItUp
    9th Jun 2015
    12:08pm
    Under this proposal if there is an upper limit put on a super balance they will be told to take it out or incur penalties just like if one puts too much in.
    Dallanhk
    9th Jun 2015
    11:18am
    The rich always get richer - that's why I want to be rich!
    Fliss
    9th Jun 2015
    11:24am
    If they've worked for it then so be it! :)
    MICK
    9th Jun 2015
    11:41am
    That is because the rich own the political debate and so own the game. If there is any reason for only occasionally voting Liberal then the continual pandering to the needs of rich election funding contributors (money!!) is it. See the game for what it is!
    Sum1
    9th Jun 2015
    1:09pm
    Those Unions who support labor through the contributions from their members would make the so called rich contributors look like paupers.
    MICK
    9th Jun 2015
    6:12pm
    There is a difference Sum1 (Frank?). Money contributed from unions is not meant to pervert the system and does not involve payola. On the other hand money provided by the mining industry for, example, is for one reason only: to change legislation so that they can increase their bank accounts and/or establish monopolies.
    It is different Frank.
    Adrianus
    9th Jun 2015
    6:54pm
    I agree Sum1.
    Adrianus
    9th Jun 2015
    6:55pm
    I don't give you enough credit mick. I hadn't realised you could answer a question before it is asked.
    TREBOR
    9th Jun 2015
    7:30pm
    Work has nothing to do with being rich.. many work to be poor. Generalisation.. generalisation..
    Anonymous
    9th Jun 2015
    7:36pm
    What makes a person rich is not the amount you earn it is how you manage it.
    There are plenty of people who earn good money who, at the end of the day, have nothing to show for it.
    Their expenditure rises to meet their income.
    I know of plenty of examples of this.
    Anonymous
    10th Jun 2015
    9:47am
    Radish, it's a dual equation. It doesn't matter how you manage your money, you'll never be rich if you can't earn a decent income to start with.

    Most of the rich are NOT rich because of either hard work or careful management. They are there because of privilege - plain and simple. They inherit money, or property, or their parents are able to give them a very good education and introduce them to the right connections. In some cases it's just a matter of parents who teach kids the attitudes needed to succeed. The poor grow up with low self-esteem, no connections, no understanding of how to impress the right people - often without even basic education in the kind of grooming, speaking and behavior needed for success. Many of the poor work far harder and are far better money managers than the rich, but just don't get the breaks in life.

    It's time the rich stopped beating their chests and pretending superiority and claiming entitlement and recognized that they have an obligation to pay their fair share towards the cost of running the nation. They are taking the benefits. They should pay for them!

    Any retiree who objects to paying 15% of earnings above $75,000 (for an individual) in retirement is SICK with greed and selfishness. There is no excuse. If doesn't matter if you got tax breaks or not (nearly all who have substantial money in super did). What matters is that you now have more than you need and the country needs someone to contribute more than they currently do. It SHOULD NOT be those who can least afford to make sacrifices - and it shouldn't be those who saved but now have less income than is reasonably needed and want, sensibly, to preserve those savings for future heavy expenses.
    MICK
    9th Jun 2015
    11:29am
    Thank you Drew. I have been jumping up and down about this tax shelter for the rich for years whilst governments of both persuasion have let the game proceed.
    Whilst saving for retirement certainly needs to be encouraged superannuation needs to at some stage NOT subsidise the rich....who will survive wonderfully even without any superannuation.
    Superannuation above a certain income is little more than a means of escaping the 49 cent in the dollar tax rate and replacing it with the 15 cents in the dollar superannuation rate. For average people it provides the ability to save a few dollars for retirement and average citizens do not have the spare cash to use the system as a tax shelter. The rich do...and use it to perfection. THIS IS WRONG and it needs to be fixed....sooner rather than later.
    LiveItUp
    9th Jun 2015
    11:38am
    Most rich people would not pay any more than the company rate of tax. It's only the highly paid wage slaves that have lots in super that this will effect.
    MICK
    9th Jun 2015
    11:45am
    Not really the case Bonny. Paying the company tax rate means the money belongs to THE COMPANY. Although individuals do use company funds for private intent there is a stage where the ATO will hold them to account and ask for a please explain. Also, company tax rate still double that of the superannuation system where the rich get control of their pension and only pay 15% tax. A great deal if you can get it, but only the rich can.
    Adrianus
    9th Jun 2015
    3:57pm
    mick Bonny is right. Lets say a company makes a regular modest profit and pays the company tax. Less assume that the company uses said taxed profits to grow, eg hire more staff, move to larger premises etc which increases the cash flow. A few years later the company has strong cash flow but no big bank balance. Let's say the company wants to reward key employees? Namely the 4 directors who have been salary sacrificing to minimise or maximise ATO assistance, which ever way you look at it. The company notices $400k of unappropriated profits so asks the bank for a loan. Now what would you do with the $400k that has already had tax paid on it? Of course the loan needs to be repaid and the company can handle that with its strong cash flow.
    mick it is not a case as you say of employees "using company funds for private intent."
    MICK
    9th Jun 2015
    9:47pm
    In many cases 'companies' are family companies...as well as Family Trusts. The game plan is to distribute income so as to minimise tax. That means payments into superannuation accounts.
    Your example avoids the facts:

    1. Those at the top always get their rewards irrespective of whether the company is growing or not or in fact doing well or not. Its called the market place.
    2. Companies borrow money to grow or issue more shares.
    3. Companies treat employee benefits as a business expense and this is a part of how successful companies are run.
    You are playing a shell game above Frank.
    Also, my discussion above is more directly aimed at private companies. Having said that those at the top benefit from the SUPERANNUATION TAX SHELTER SET UP FOR THEM in any case.
    Adrianus
    9th Jun 2015
    10:18pm
    I'm just saying that Bonny is correct. Related or key employees very rarely pay anything above the company rate. Your assertion that " Paying the company tax rate means the money belongs to THE COMPANY." is incorrect and misleading. If the money belonged to the company in the first place and assuming we are talking about profit, having paid the tax is not going to change that fact. And the company is then free to do what ever it wants with the after tax profit. Just as it was free to do what ever it wants prior to those funds being taxed.
    Jacka
    9th Jun 2015
    11:37am
    the two and a half million dollar maximum seems quite fair however I do think no tax up to 100000 dollars is appropriateper year you must remember superannuation returns are a bit of game sometimes you win sometimes you lose its not a guaranteed return positive every year.and don't forget $120,000 return on two and a half million is under 5 percent not a great rate at present returns for Suppa just something to think about Jack
    MICK
    9th Jun 2015
    11:55am
    Really?
    I think that the long term appreciation of super has been quite acceptable.
    As for a $100 000 cap maybe fair. I bet you will not get an agreement from those who earn much more from their super though.
    LiveItUp
    9th Jun 2015
    12:20pm
    I think super funds overall have had mediocre returns where most fail to even meet the market return.
    Anonymous
    9th Jun 2015
    1:31pm
    I have to disagee with your comment Bonny. I have been quite happy with the returns in my industry super fund.
    LiveItUp
    9th Jun 2015
    2:02pm
    My son is in the best performing industry fund and he is not very happy with it at all. He can't wait to get enough money to set up his own SMSF.
    Anonymous
    9th Jun 2015
    7:32pm
    I do not feel I have the expertise or want the worry of my own SMSF Bonny.
    I wish your son good luck with his.
    Dors
    9th Jun 2015
    12:09pm
    This proposed change worries me immensely. i have been paying money into super for 30 odd years and living on struggle street in the meantime. Some of my super I have paid in has been after tax - so I have in effect already paid tax on the money - why should I pay tax on it again. I am now close to 60 years old and would like to transition to retirement. I don't earn a lot for a person who has supported my family and unfortunately continues to do so. Where I live the cost of living in much higher than southern states and $75000 is not a lot of money per annum. So I say to Chat and any other why should i pay tax? The amount needs to be higher than $75000.
    LiveItUp
    9th Jun 2015
    12:18pm
    I agree.
    LiveItUp
    9th Jun 2015
    12:24pm
    An advisor told me recently that most people over 55 are better off using the transition to retirement and salary sacrificing in to their super. May be worth investigating.
    Anonymous
    9th Jun 2015
    1:34pm
    Have a friend retired from public service job.. Got herself a job as a part time checkout chick. All of her wage went into her super fund. She had a degree in Accounting so she knew what she was doing.
    Chat
    9th Jun 2015
    4:10pm
    Dors, You seem to be missing the point --- no-one is suggesting that you pay a second lot of tax on the money you have in your Super fund. What is being proposed is that INCOME earned from the Super fund (which clearly has not been taxed) is able to accrue up to $75,000 before any tax is applied. However if the INCOME exceeds $75,000 then the excess is taxed at the minimal rate of 15%.
    Nothing is being taxed twice!!
    TREBOR
    9th Jun 2015
    7:32pm
    You say you lived on struggle street, but put away a heap of after tax earnings as extra super. Your choice - nobody else's.

    Choice-mobile, son - that's what it's all about!
    Anonymous
    9th Jun 2015
    7:34pm
    Chat you are quite correct in what you say.
    ]
    The tax will only be paid on the interest earned over $75,000 (that is if it is enacted...at the moment it is only a thought bubble).
    Anonymous
    10th Jun 2015
    9:53am
    Sorry Dors, but if you can't live on $75,000 a year - regardless of where you live in the country - you are used to a very lavish lifestyle and have high expectations. And if your super fund is earning that much, you've done okay in life and can well afford to make a measly little contribution to the cost of providing the infrastructure and services that have allowed you to do so well and that continue to provide comforts for you. It comes to a miserable $3750 an income of $100,000 a year. It's NIL on $75,000.
    Fliss
    28th Nov 2015
    1:58pm
    I agree Dors
    johnny
    9th Jun 2015
    12:14pm
    I think labor's proposal is very fair. Maybe the limit can be indexed for inflation every year. But at current average earnings, anybody earning more than $75,000 can pay tax.

    But the liberals will not touch it because they only work for the rich. Likewise, they will not touch negative gearing or foreigners investing in real estate at bloated prices and depriving Australians the dream of owning a home. The liberals come with all kinds of proposals to tax the battlers, but will not accept any proposals that affect the rich.
    Supernan
    9th Jun 2015
    12:25pm
    Totally agree with Chat ! But bet current Gov. wont do it ! The people who support & finance him are exactly the people who stash all that money away in Super tax free. he wont dare offend them !
    Anonymous
    9th Jun 2015
    4:00pm
    Well, I was an LNP voter, but they've lost me and my husband and many others I know because of their elitist policies and slugging the battlers. He might just be offending a lot more of his supporters than he realizes.
    bartpcb
    9th Jun 2015
    12:28pm
    It does sound reasonable to tax Super earnings of over $75,000 at 15% but I would think that would be a disincentive to plough extra money into their Super,for those who can do so, , and that's going to have a negative impact somewhere else down the line. It is likely though that this whole discussion is a smoke screen to divert our attention from something else (don't know what) because whatever happens with Super, it will only be the middle to lower income people that get hit, because the very rich will find 'legal' ways of getting around it all.
    TREBOR
    9th Jun 2015
    6:20pm
    Thing is, bart, with that level of income from super they have no need to plough extra into it.

    There is no reason for super to continue to attract multiple tax concessions when Pensioners who work are slugged with tax on income AND Pension after a lifetime of paying fully-taxed portion of income tax for Pension.

    A totally bizarre situation, and way past time the excess super hoarders paid their share of tax.
    TREBOR
    9th Jun 2015
    6:26pm
    Tax on super should be set at the same rate as for working pensioners - i.e. they get only the tax-free threshold, same as everyone else.

    On a tactical side - (or aside) - governments deliberately install such imbalances, set as time bombs - then when the goose is ripe for plucking, they stir up an argument in the community between the privileged ones and the non-privileged - and thus create the situation where they can move the goal posts and - in this case - then tax the super they let run past for so long.

    Super WILL be taxed - the argument is from what point - and will working Pensioners be brought under the same tax regime?
    Chuck
    9th Jun 2015
    12:33pm
    The $75,000 tax free threashold seems fair to me but it should apply to all retirees whether they have their money in super or other types of investments.
    LiveItUp
    9th Jun 2015
    12:37pm
    Why have super if that is the case?
    Chuck
    9th Jun 2015
    12:53pm
    After the crash of the GFC not everyone wants to place their life savings in super any longer. I just think it would be fair if all retirees were treated equally
    LiveItUp
    9th Jun 2015
    12:57pm
    If I didn't have a SMSF I wouldn't use super either. No faith in super or managed funds.
    Retired Knowall
    9th Jun 2015
    4:30pm
    It does apply to everyone, retirees included. In fact outside of super you are taxed at the marginal rate if you earn more than $18500.00 frpm any source, rental, Shares, Bank Deposits, work etc. Super is the only income source that is not taxed after 60.
    TREBOR
    9th Jun 2015
    6:27pm
    ... including Pension plus work....
    Anonymous
    10th Jun 2015
    9:54am
    Absolutely right, Chuck. I assumed it did - since it's a tax on income. It certainly should apply regardless of where the income comes from.
    Adrianus
    9th Jun 2015
    12:56pm
    It's a ridiculous and unworkable concept to tax the level of income only. I assume we are talking about income generated by a super fund then distributed to members. I can see Trustees and Fund managers on occasion fiddling with allocations so that those returns come in under the $75k. They smooth out fluctuating returns now in many funds. Example; a 40 year old member has an account balance of $450k. His time horizon dictates an aggressive asset mix. Last year his balance dropped by 11% to $400k therefor no tax. However this year his account claws back with a 20% return and a $1500 tax bill. This member has achieved a 6.8% return and is being treated like a millionaire? The only workable solution is to introduce an RBL as a one size fits all approach. I think ASFA and Westpac are on the right path in that regard.
    Please don't let Labor mess this up further.
    We saw Hawke introduce the 15% income tax and the 15% contributions tax and all it did was make super unfair for low income earners.
    LiveItUp
    9th Jun 2015
    12:59pm
    Just imagine having 2, 3 or more super funds. Totally unworkable that's why the government got rid of Labor's $100,000 limit.
    Adrianus
    9th Jun 2015
    2:02pm
    Bonny I've always been against penalising success, which only serves to reduce productivity and discretionary effort.
    I would much prefer to see personal marginal rates come down so that the top rate equals the company rate and thereby making Super a more level playing field, while simultaneously taking the lustre off "negative gearing" without harsh impact. The only way this can be achieved is by increasing the GST proportionately.
    Labor and the Greens have proved many times they lack the political will on matters concerning the economic prosperity of this great country.
    I often wonder why the unions want control of the $1.5t Super and the $700b Federal Budget?
    Kind of reminds me of the famous American bank robber Slick Willie Sutton. Willie was a well dressed, well mannered man who reportedly never hurt anyone during his life of crime.
    He was once asked "Willie, why do you rob banks?"
    To which Willie responded, "Hell that's where the money is."
    There is a lot more to Slick Willie's story and how this became known as "Sutton's Law" but that's for another day.
    MICK
    9th Jun 2015
    10:00pm
    The next political advertisement eh.
    Your account appears to be a fairytale. Superannuation funds would not get into such a situation if they are being professionally managed because members would move to a better performing fund.
    Your normal attack avoids mention of the fact that rich Australians on a tax rate of around 49% would be very happy with even 20%...or more reasonably the 15% government levy on contributions.
    Adrianus
    10th Jun 2015
    7:22am
    Again mick, you and your labor mates fail to recognise the damage of your destructive attitude and attack on those who have some wealth.
    You and your kind are so hell bent on making life harder for high income earners that you also take an unfair position on the low income households.
    We saw this with Labor's introduction of the 15% income tax on super funds.
    And this is what we are now trying to fix so that it's a fairer system for battlers.
    If a person is unemployed for say 2 years and earns no money, why is his retirement savings being taxed at 15% during this time?
    We all agree that these super taxes disadvantage low income households but I notice only denial as to how they got there.
    Let's not compound the mistakes of the past with more mistakes simply because of an ideology of attacking success.
    Anonymous
    11th Jun 2015
    7:59am
    I agree Frank, we do not want to encourage mediocrity and I certainly want people to get a good education, a good job and make their way in the world and be great achievers.
    Success is something I admire and Dick Smith, comes to mind, also Richard Branson (a man who is dyslexic and not a good achiever at school).

    I do not begrude them the fortunes they have made and look at how many people they have or are employing. We must encourage people to achieve.
    Adrianus
    11th Jun 2015
    9:36am
    Radish, thank you!
    23% of the worlds millionaires got rich through paid work.
    We need this proportion to be higher, not lower.
    Australia is a place where you could be painting signs or painting the Harbour Bridge and become a millionaire. Why change that?
    Interestingly there are around 2,060 ultra high net worth Australian citizens and only 475 think super is a priority? Is one of the reasons, "too much government interference"?!
    Anonymous
    11th Jun 2015
    1:16pm
    Nobody is proposing punishing success, Frank, much less endeavour. The LNP proposal (to tighten the means test) punishes moderate success, if you haven't achieved quite as much as you would have liked. It victimizes people who saved, but couldn't quite achieve self-sufficiency. This proposal doesn't punish anything! It says ''If you can afford to contribute to the running of the country, you should do so. That is, if your income is substantially higher than it needs to be to provide a comfortable living, you should accept an obligation to contribute to the costs of providing the infrastructure and social services that you have taken advantage of - and continue to enjoy.'' That's fair and reasonable by any ethical and moral standard. It has nothing whatever to do with punishing success, and it's YOUR attitude, not Mick's, that is destructive. Like the LNP, you are determined to protect the haves from any obligation and transfer all the burden to the strugglers. Well, they work hard to, and succeed at a given level. And your approach denies them any reward for that - which is far more damaging than taking a little from the rich because there are far more whose striving will only get them to the medium level - never to wealth.

    There's no ''ideology of attacking success'' in this proposal. There's an ideology of being fair and decent.
    Essdubbya
    9th Jun 2015
    1:13pm
    Sorry, I can't agree with this proposal as it does not take account of inflation which may again reach ridiculous levels in the future. There is also no mention of indexation. Who can say what is comfortable in one individual's case compared to another, especially considering increasing health costs beyond the inflation rate. I see it as the thin end of the wedge for future governments to exploit as an easy way to increase tax revenue.
    Many of us have worked long and hard to save for our retirement or have inherited monies to fund our retirement lifestyles.
    All of the monies in our super funds have already been subject to taxation. Why increase it? It is a wealth tax by disguise.
    Anonymous
    9th Jun 2015
    4:06pm
    I would assume it would be indexed. I think the need to index is obvious. No proposal is perfect, but this sure is better than draining the savings of a relatively small group who managed to save a decent amount but not enough to be self-funded by changing the means test. That was a cruel measure that hurts one group badly and leaves all other retirees untouched. That's grossly unfair. That group worked long and hard for their retirement too, but it's being taken away while those who perhaps didn't strive as hard get more and the rich, who have way more than they need, don't contribute anything. How is that reasonable.

    This isn't a ''wealth tax''. It's a fair request to those who have more than they need to live on comfortably to pay a small contribution toward the cost of running the country. It amounts to $3750 a year for someone who earns $100,000 a year. Please don't try to tell me it's unreasonable for a single retiree with $100,000 a year income to pay a measly $3750 in tax to help ease the burden on younger workers!
    MICK
    9th Jun 2015
    10:13pm
    Not much Essdubbya. And if we have inflation guess what is going to happen to invested superannuation? IT WILL HAVE A HUGE CAPITAL GAIN. The result will be that you are n better or worse off.
    Alexii
    9th Jun 2015
    1:24pm
    I just wish that I were one of the filthy rich with a $10million super account. Truthfully, I'd be extremely happy if I had a $1million super account.
    Anonymous
    9th Jun 2015
    1:35pm
    Yes Alexii, it depends which side of the fence a person sits on lol.
    Golfer
    9th Jun 2015
    1:54pm
    So the consensus is "double tax them"! Right?

    Tax the money going into super and tax it coming out above $75k. Now that's real incentive to save for your retirement. And mind you, a retirement that obviates the government from contributing a cent towards.

    The government should spend more effort in busting the welfare cheats not the well-off folks because last time I looked cheating is still a crime.
    Anonymous
    9th Jun 2015
    4:08pm
    Money going into super earns tax concessions and so do earnings in super, so how is it unreasonable to tax it coming out if someone has more than enough to fund a comfortable lifestyle. The greedy always blame the ''welfare cheats'', but how many of them are there, really? I suspect very little money goes to cheats compared with the $30 billion that goes in superannuation tax concessions (most of it to the well-to-do).
    Adrianus
    9th Jun 2015
    4:21pm
    Golfer I could never understand why Bob Hawke introduced those 2 new taxes?
    A 15% tax on your contribution and a 15% tax on the interest income. A bank account has no tax on the interest and is subject to assessment on an individuals total income for the year. If a person is out of work and earns no income for a year his super income is still taxed.
    TREBOR
    9th Jun 2015
    6:36pm
    Golfer - those who put money into super get a tax CONCESSION - those who earn less and contribut5e via income tax towards pension receive no tax concession.

    Ho-hum - most funds generate income through ivnestments, and thus reap dividend imputation tax concesion.

    Than at maturity super can be taken as an annuity currently tax-free.

    How is that in any way 'taxing it twice'? I has already received three tax concessions along the way, unlike the income tax of pensioners, which was fully taxed along the way.

    What? You expect to be able to put money away totally tax-free into a super fund, then reap dividend im puation, theh draw it tax-free? It's not fully taxed when it goes in - it cops a 15% reduction....

    That hard to understand?
    MICK
    9th Jun 2015
    10:10pm
    You forgot to mention one thing Golfer: money going into super is only taxed at a measly 15%, so you have a much larger sum compounding away and growing to a much larger final figure. And then it is tax free at the end. Whilst accumulating in the fund earnings are only charged at 15% again.
    Do yourself a favour. Have a look at the tax scale. You obviously are not aware of what real tax looks like.
    Adrianus
    10th Jun 2015
    7:29am
    mick don't be so cocky. Your super is not safe simply because you've stopped making contributions. They are going after what ever will get through the senate. Desperate times call for desperate measures. And Labor are in this all the way. The changes will have to mean a move toward budget repair otherwise its not worth doing.
    Anonymous
    10th Jun 2015
    9:59am
    And you are supporting them going after whatever they can take, as long as it's from the battlers and not those who can afford the loss, Frank. Your greed is showing. The Labor Party is trying to counter a cruel proposal that takes from a small group who have less than enough, and instead ensure that the changes take a little from those who have more than they need. But you blinkered privileged would never agree to that. The rich must be allowed to continue to steal and over-indulge.

    No proposal is ever going to be perfect, but this is a hell of lot fairer and more economically viable long-term than Morrison's alternative, or the previous LNP solution of grinding the poorest aged into ever-increasing poverty.
    Adrianus
    10th Jun 2015
    10:38am
    I'm not greedy Rainey, far from it.
    I just want a fair system that doesn't penalise success because people's dreams and aspirations play an integral roll in their well being and happiness. You must know what it's like when that which you have strived for over a long part of your life has suddenly had a red pen go through it?
    If we as a country keep destroying the dream we will have destroyed it for all of us. Rich and poor, young and old, male and female or homosexuals, Union Bosses or Company Directors, Farmers or Doctors, all of us.
    You say... "The rich must (NOT) be allowed to continue to steal and over-indulge."
    I say.... The poor must aspire to accrue wealth.
    Yours is a negative outlook. One which aims to harness achievement rather than foster it.
    Anonymous
    11th Jun 2015
    1:22pm
    Frank, you are dead wrong about my outlook, and you have policy endorsement back to front. It's the LNP policy (tightening means tests) that punishes success and discourages endeavour. It says ''If you saved over $500,000 for your old age, you will be victimized, but if you saved only $250,000, you will be rewarded.'' This proposal, conversely, does nothing to punish or discourage endeavour. It simply says if you earn enough to fund a more than comfortable lifestyle, you should contribute to the costs of maintaining the infrastructure and social services necessary to provide an environment in which that is possible.

    Mine is an entirely POSITIVE outlook that aims to foster achievement, but also to encourage fairness and respect for others. In my view, paying tax is a privilege. One should be proud to be able to contribute to the cost of providing the environment that facilitated the effort and reward that raised one to a level of affluence.

    BTW. You cannot encourage the poor to aspire to wealth by stealing from them and trampling them down constantly to give more to the selfish rich. You are the one proposing disincentives -not me!
    Pablo
    9th Jun 2015
    2:40pm
    The Robin Hood attitude in Australia which sees the haves always subsidising the havenots makes me sick. It's just jealousy directed towards people who have worked hard and saved for their retirement. You don't have to be rich in this country to be the subject of this jealousy.
    LiveItUp
    9th Jun 2015
    2:46pm
    Exactly that's the problem with Australia today. Another thing that erks me is that people today don't like to take the blame for their own mistakes they are always looking for some one or something to blame. Lose money sue your advisor, broker, bank, fund manager etc.
    Polly Esther
    9th Jun 2015
    3:09pm
    Hear hear Pablo, and anyone who thinks differently is free to pack up and leave this Country, that they are obviously disenchanted with.
    retroy
    9th Jun 2015
    3:11pm
    Hear, hear, Pablo you are so right.
    I paid a lot more tax in my working career than any of my friends but I put my self through Uni and struggled hard in my early years, got myself up the ladder of success, brought up 3 kids that all went to Uni at my expense, and now all the lefties want to pull me down.
    I used to resent the high taxes I paid, but I was always happy to pay my fair share. Bludgers and layabouts used to get handouts financed by my taxes so I am just glad that I now do not have to pay for the current worsening crop.
    LiveItUp
    9th Jun 2015
    3:36pm
    Heard the other day of someone whose son finishes their apprenticeship and is not being offered a job. As this kid has money saved up for a house deposit he is not entitled to the dole until he basically uses it all up. What message does this send to our young people?
    Sum1
    9th Jun 2015
    3:49pm
    Unanimous Pablo....These 475 Super People in the whole of Australia who have over $10m in Super has caused hysterical envy.
    The Super Funds for these 475 x $10m pay a 15% tax to the ATO on all income derived each year prior to their retirement. No mention of that in this forum.
    Most have added to their Super as I have with AFTER TAX tax contributions.
    Ditto....retroy.
    All noise from the Whoa is Me.
    Anonymous
    9th Jun 2015
    4:15pm
    But that's exactly the point. This proposal doesn't see the haves subsidizing the have nots. It asks those who have way more than enough to live on comfortably to pay a tiny amount toward the cost of running the country, and anyone who objects is being very unfair. For heaven's sake, it comes to $3750 for a single person on $100,000 a year retirement income. Anyone who objects to that is just plain selfish - no matter how much of your super contribution was ''after tax''.
    The alternative is to victimize a small group of retirees who saved a decent nest-egg, but DON'T have enough income to live on, by forcing them to drain away their savings. How is that more acceptable.
    Anonymous
    9th Jun 2015
    4:25pm
    All the alternatives so far proposed force the have-nots to subsidize the haves by forfeiting their pension, or having it reduced substantially, in order to preserve the $30 billion in tax breaks that the Howard Govt. gave out - 80% of which benefited only the top 20% of income earners. This is not about envy. It's about fairness and decency. A decent society doesn't strip those with least of their savings in preference to making those with the most make a tiny contribution (and it IS tiny! - A miserable $3750 a year for a single person earning $100,000 a year in retirement!!)

    What the well-to-do don't seem to get is that the poor work hard too - only the better off get the benefits of their work. If all the cleaners and laborers pulled their labor tomorrow, the rich would be in dire trouble. They are needed, but they are NEVER paid what they are worth. But it seems the privileged want it all - the big incomes, the benefit of having access to cheap labor, all the benefits that accrue from having a consumer base to sell to, AND someone else paying all the taxes for them.

    Let me put a simple choice to you: Morrison's proposal sees a couple who scrimped and saved their whole working life to accumulate $825,000 losing up to $13,000 a year, despite maybe having a total income of only $22,500 a year. This proposal doesn't touch any couple earning less than $150,000 a year, but asks a retired couple earning $200,000 a year to pay a measly $7500 toward the cost of running the country.
    Which is more reasonable?
    stupidgalah
    9th Jun 2015
    6:03pm
    Take a bow, Pablo...........waiting to see how long it would take for someone to agree with me.....Tall Poppy...alive and well.......
    TREBOR
    9th Jun 2015
    6:38pm
    Well, Pablo - I can assure you that al the hard yards I did in this life certainly supported both the haves and the have-nots.

    Anyone who disagrees can pack up and leave this country if they don't like it the moment the country expects them to put in a pittance above $75k annually.
    MICK
    9th Jun 2015
    9:53pm
    retroy: surprisingly we agree.

    Sum1/Frank: good that you were successful. I do not think that this is the issue though. The issue is the absolute unfairness of giving rich Australians tax shelters which only they can access. The rest of the nation does not earn sufficient money to access such shelters. That is what makes them a scam and a rort.
    It has nothing to do about making a fuss about 475 Australians or about success. What it is about is those who have the most money being effectively given heap more. So get it right
    Circum
    9th Jun 2015
    10:20pm
    Pablo.Unfortunately your emotive comments are short on substance.People will read into it what they wish.
    What is being debated is the fairness of the system.Contrary to your comments many here,including myself,see that the havenots are subsidising the haves.The statistics clearly demonstrate this.
    It may be true that the haves will act defensively to protect their privileged position while the havenots will be resentful that the system is biased and unfair.
    The line between haves and havenots can be very blurry.
    Adrianus
    10th Jun 2015
    8:55am
    Circum, the system treats everyone the same and impartially.
    The "unfairness" as you describe it, is in the having or in the not having.
    Anonymous
    10th Jun 2015
    10:03am
    You are full of it, Frank, or just blind. The system CERTAINLY DOES NOT treat everyone the same and impartially. It treats some very well and some appallingly. And it's the UNFAIRNESS this proposal is trying to address. But those who were treated very well by the system naturally oppose it, because GREED is unlimited and incurable.
    Anonymous
    10th Jun 2015
    10:03am
    You are full of it, Frank, or just blind. The system CERTAINLY DOES NOT treat everyone the same and impartially. It treats some very well and some appallingly. And it's the UNFAIRNESS this proposal is trying to address. But those who were treated very well by the system naturally oppose it, because GREED is unlimited and incurable.
    Adrianus
    10th Jun 2015
    10:44am
    Rainey, the same superannuation rules apply to all of us.
    What could be more fairer?
    Are you saying Doctors should be taxed more than fruit pickers?
    Anonymous
    11th Jun 2015
    1:28pm
    Yes, actually Frank. The progressive taxation system was devised to balance an unfair remuneration system, and on the premise that people with pride and integrity would want to contribute as best they are able to ensuring that the country has funds to pay for the services and infrastructure we all need for growth and comfort. It's only in recent years that the greedy rich have decided they don't want to pay their share, and that's disgusting.
    Adrianus
    11th Jun 2015
    1:52pm
    Where will this discrimination stop. Super is an investment instrument. How many other investment instruments would you like to see changed in order to increase tax for the perceived wealthy? I have said for years that super should have a "reasonable benefit limit" based on a multiple of 25-30 x Average Yearly Wage. when that level is reached taxes apply. You cannot suggest that a system which sets rules to entice investors then changes once locked in is anything but unfair.
    Anonymous
    13th Jun 2015
    8:42am
    The system IS CHANGING, constantly, Frank. It's a matter of HOW it changes. How is it any fairer to change the pension system so that someone who planned for a comfortable retirement (with $500,000 in super and a part pension) is suddenly deprived of a huge slice of their income and all the benefits and forced to drain their savings to live?
    Adrianus
    13th Jun 2015
    11:36am
    Well it should stop changing. A long term investment vehicle shouldn't be constantly changing, particularly one that has so many legal restrictions.
    What I find astonishing is that you probably believe that Rudd, Gillard, Shorten, Milne, and the Union Bosses actually care about having enough in the kitty to fund pensions.

    9th Jun 2015
    3:51pm
    Yes, Tony Abbott is failing some who voted for him, and Australians overall - dismally! The focus of any means test/taxation system should be on ensuring that people have adequate INCOME to meet their needs and to ensure a fair reward for effort (so incentive is preserved) while sharing the burden of paying for infrastructure and social services fairly and equitably among those who can reasonably afford to contribute. Nobody should be penalized for saving.

    The proposal in the last budget, to victimize retirees with more than $500,000, forces those getting low investment returns to drain their savings. That's not only unfair, but economically unwise, because once they do they then qualify for pensions and benefits again. The more savings are drained away, the less the Government saves by the measure and the more risk is incurred of future costs. Also, the next generation suffers because as this generation ages less well-off, they have less money to pay for care in old age and less to leave to offspring, so the next generation is less well-off. Ultimately, it achieves the exact reverse of the goal. Also, by punishing people for saving a healthy amount, but not enough to be self-sufficient, it provides a powerful incentive to younger folk to NOT SAVE, unless they can save a massive amount. That's an absurd message to send.

    Conversely, taxing income above a certain level gives the Government ongoing extra revenue without reducing a retiree's capacity to live comfortably on an ongoing basis and meet future expenses, and even - should they wish - to leave a bit to their kids. (And the argument that pensions shouldn't facilitate an inheritance is stupid, because pensions facilitate gambling, drinking and expensive holidays. Why should someone who chooses to save to leave a bit to their children be punished for that choice while a gambler or spendthrift is taken care of from the public purse?) Taxing income enables the well-to-do to pay their fair share in a relatively painless manner, and to demonstrate fairness and human decency by accepting that those who did well in good times should make sacrifices in hard times. The well-off SHOULD be happy to contribute to supporting the disadvantaged and building a more prosperous nation for future generations, and 15% of income over a generous threshold is more than reasonable. Nobody could raise a valid objection to that! It also, I think, would please younger workers to see that well-off retirees are contributing to the tax burden - not just leaving it to the workers of today.

    This is a proposal that only the rich and very greedy will oppose.
    LiveItUp
    9th Jun 2015
    3:56pm
    I oppose it and I'm not rich or greedy. Who will it effect if super funds have a bumper return for a year?
    Anonymous
    9th Jun 2015
    4:16pm
    Bonny, if you are getting the investment returns you claim, you are rich, and if you object to paying a tiny amount of tax on the income above a very, very generous threshold that ensures you have way more than enough to meet your needs, you are greedy. Sorry, but that's just how it is.
    LiveItUp
    9th Jun 2015
    4:24pm
    If greed is taking what I'm given nothing more or nothing less then so be it. You have no idea what my income is or in fact if I do have an income at all. I actually consider myself quite poor but I have enough to meet my needs so if that's rich then I am rich.
    Anonymous
    9th Jun 2015
    4:28pm
    Bonny, I'm only responding to your comments about the investment returns you claim to be able to achieve. Anyone who can achieve that level of return, if they are not already rich, will be very soon! And anyone who objects to a tiny tax on a very generous income obviously doesn't know what it's like to be poor in this country.

    9th Jun 2015
    5:08pm
    Bonny, I have read all of your comments above and mean no offence, but I really don't think you know what you are talking about. Nothing of what you say makes any sense whatsoever.
    LiveItUp
    9th Jun 2015
    6:28pm
    I know what you mean it took awhile for me to understand it all too.

    Years ago I came across a fellow called Peter Thornhill (http://www.motivatedmoney.com/) and what he had to say seemed to be the exact opposite of what others were recommending but it soon started to make sense to me.
    Adrianus
    9th Jun 2015
    6:57pm
    Bonny you have more knowledge than most of the posters here.
    LiveItUp
    9th Jun 2015
    7:36pm
    Lot's of people just don't realise the rich make hay while the sun shines and when it starts to look a little bleak move on to the next tax shelter. They will simply do this with super too. I actually know rich investors now who only have the bare minimum in super already as they know it's only a stroke of a pen to make the rules change.
    TREBOR
    9th Jun 2015
    6:10pm
    Should be capped at the same level as tax-free for pensioners who continue to work.

    You know all the arguments by now about who's paid what and who's got concessions along the way....
    VicCherikoff
    9th Jun 2015
    6:11pm
    It is largely the mismanagement of the economy and stupidity around mining tax, a lack of investment in science and other policies leading to a Brain Drain from Australia that the Government is laying their greedy eyes on OUR money in Super. I think that whatever policies are made, they need to reflect what the politicians do for themselves and for top management in the Public Service, with respect to superannuation. We can't have one set of laws for drug dealers, politicians and other criminals and another for the rest of us.
    Majorca
    9th Jun 2015
    6:24pm
    I think the Labour Party's proposal is to allow the first $75,000 to be tax free and any future LUMP sum withdrawals from a super fund to be taxed at 15%.
    LiveItUp
    9th Jun 2015
    6:29pm
    I disagree as that's double taxation.
    TREBOR
    9th Jun 2015
    6:43pm
    How is it double taxation? Concession of 15% before, dividend imputation during, and zero tax afterwards?

    You want it all for free?
    TREBOR
    9th Jun 2015
    6:45pm
    What IS double taxing is demanding that pensioners who work accept the current tax-free threshold and are forced to include their pension as income, something they've paid full dollar for all their lives.

    Now THAT'S double taxation! Pensioners should be entitled to earn $75k a year above pension without paying a cent in tax.

    Goose and gander....
    Adrianus
    9th Jun 2015
    6:59pm
    Wow is that so??? So it is a real con then???
    LiveItUp
    9th Jun 2015
    7:01pm
    Atleast 15% in and 15% out that's more than a lot of people pay on their normal income.

    The pension has nothing to do with superannuation. It is just for those who haven't saved for their retirement. Therefore it should not be compared with superannuation. Fully self funded people cost the taxpayer nothing whereas the pension has to come out of what other taxpayers pay.
    TREBOR
    9th Jun 2015
    7:37pm
    Yes it is, Frank. Pension money is part of income tax - and it is absolute fact that a Pensioner with a job pays tax on all income including Pension.

    This is my first year of working on Pension, and it will be interesting to see how it all works out and if I have to stump up some money, after weekly tax deductions already.

    If so - I will have absolutely zero sympathy with super fiends on $75k.
    TREBOR
    9th Jun 2015
    7:39pm
    Nonsense, Bonny - it's a 15% reduction to put it in - any imposition on earnings later is merely balancing that out to some extent. If you were paying 30% now and 15% later, you'd be right.

    It's like saying you can have 15% savings now for paying 15% later - and it still is only mooted as on incomes above $75k. Most people won't be included, and anyone with that level of assets doesn't need any more handouts.
    LiveItUp
    9th Jun 2015
    7:48pm
    Even under the new rules one could earn over $75,000 on their super and still get the part pension. That's where the problem lies.
    TREBOR
    9th Jun 2015
    8:06pm
    Umm - cut-off point for earnings is around $48k for a couple, after which no pension is available, but if you are already on the books, that is only held in suspension for up to two years.. But many may still get a concession card etc.

    http://www.humanservices.gov.au/customer/enablers/income-test-pensions

    So paying tax on $75k+ is really nothing big at all, especially when a working pensioner is taxed on pension plus income and is allowed the single tax-free threshold only .

    Disgusting really.
    TREBOR
    9th Jun 2015
    8:07pm
    Single $1,880.40
    Couple combined $2,877.60

    Those are the fortnightly cutoff points - so if me and the missus could earn $2877.60 a fortnight our pension would go to zero, but we would still be classed as pensioners and stil receive card etc. If we earned that amount or above for more than two years, pension status is reviewed.
    LiveItUp
    9th Jun 2015
    8:19pm
    One has $400,000 in assets which is deemed at 3.25% $13000 income well below cut off point. So satisfy both assets and income test for part pension. However the assets are all in super fund which earns 20% $80,000. Pension used to pay the tax I guess.
    TREBOR
    9th Jun 2015
    9:59pm
    20% How do I get into the Drug Dealer's Industry Super Fund? Is that Colombian branch or what?
    MICK
    9th Jun 2015
    10:17pm
    Not really Bonny. We are talking about 15% at either end. What you are ignoring is that the larger sum of money which goes into superannuation accumulates to a MUCH larger final sum. So the end is you are MUCH better off.
    The whole discussion about double taxation is really not valid. Look at the figures instead.
    TREBOR
    9th Jun 2015
    6:47pm
    Simple solution - pay everybody Pension, reduce it for income according to the same rules, and tax additional income according to the same rules.

    One rule for all.
    MICK
    9th Jun 2015
    10:18pm
    And that is precisely what should happen. That way the system is not as easy to rort.
    stupidgalah
    10th Jun 2015
    7:35am
    I agree with a pension for everybody. Also while you are at it......people on a pension should not be able to vote........this should give us some interesting reading this fine morning...........
    Adrianus
    10th Jun 2015
    7:43am
    stupidgalah, I agree with you on the voting rights of us seniors being taken away when we go on welfare.
    Anonymous
    10th Jun 2015
    10:06am
    Yes, Trebor. That would be the sensible way, but it will never happen, sadly. At least this proposal makes the very well-off pay a little instead of hitting out and the less affluent who worked bloody hard but couldn't quite achieve self-sufficiency. It's much fairer than either of the two previous proposals.
    Not Senile Yet!
    9th Jun 2015
    8:13pm
    Both Parties are missing the point on Super Taxation.
    Firstly, it was supposed to be tax Free upon withdrawal / access after the age of 60 regardless of how you accessed it....whether by annual amount or lump sum!!!!
    It has been butchered by continual interference by BOTH Parties!!!!
    Secondly, tax concessions or tax reduced income or claims for taxation reductions for contributions have all been introduced as a way of encouraging savings for retirement......however most tax reprieves/subsidies DO favour the HAVES and NOT the HAVE NOTS simply by their ability to take advantage of them......this is seen as unfair distribution of everyone's tax dollar to subsidise those that do not need subsidising!!!!!
    Super has been screwed up by subsidies and tax avoidance......it is not about cheating or being dishonest.....people will avoid tax if allowed or encouraged.....to do so is be human!!!!
    What the real issue here is that the Government has created an unbalanced subsidy..... using tax concessions.....that are clearly not able to be used by those on an average wage!!!!
    Salary Sacrifice is not available to the factory worker or those on a minimum wage....and even if it were....they cannot afford to take advantage of it!!!!
    It is therefore designed for Middle to Upper Class who clearly earn enough to salary sacrifice......and that is what makes it UNFAIR and UNREASONABLE!!!!
    Super was never intended to be taxed after it was accumulated!!!!
    That only came about after tax concessions were made going in!!!
    It is the structure of Tax Concessions allowed for Super Contributions that has become the real Issue....as that makes it a tax subsidy!!!
    If they had just let it be......not granted tax concessions at all....and then left it all to be tax Free at the other end.....most people would be happy!!!!
    Even taxing the earnt dividend at the end is fraught with danger!!!!
    Remember we has a GST in place and everything that is spent attracts 10%......why do they need the extra 15% before you even spend it????
    I apologise if I sound as if I am for the Wealthy.....that is not the case!!!
    It is wrong that the Government has continually fiddled with the Super.....namely Industry Super of the Workers.....yet left their own untouched.....as well as not apply any Super changes to SMF at all!!!!
    Yes the Whole of Super Fund taxation needs a complete overhaul....but not by the Very People who STUFFED IT in the first place!!!!
    TREBOR
    9th Jun 2015
    10:03pm
    You've got it right NSY - don't fret about being mistaken for being on the side of the fat cats.
    TREBOR
    9th Jun 2015
    10:05pm
    Thing is - if the tax concessions are dumped and a limit set on how much can be put away, and a zero tax imposed on super on payout - there arises a need to set right the current imbalances by imposing an equivalent tax on past contributions.

    Simply allowing those who've quite blatantly abused the system to get away with it is not good enough. and that needs to be applied to ALL super. The current system is a mess filled with unfair advantages and blatant abuses.
    Travellersjoy
    9th Jun 2015
    9:43pm
    It is not fair.
    Too many people seem to believe that the tax payers should subsidise them to live on the income from their super so they can leave the capital to their children.

    Most of us have to plan how to make our capital last as long as we do, let alone interest from it.

    If people can calculate how much to charge me for insurance on everything from my house, car and life to my dog needing treatment, surely they can figure out a reasonable point at which tax payers should stop supporting superannuants.
    Travellersjoy
    9th Jun 2015
    9:48pm
    Bring back death duties or estate duties, at a reasonable rate and we can all stop agonising over super.
    MICK
    9th Jun 2015
    10:23pm
    Its coming but not very fair. It should be possible to leave something for your children rather than have a ravenous state take most of the estate as they did in the past.
    Your post above misses the point that there is regulation of pensions (Income and Assets Test). The only real talking point should be how to stop the greedy rich folk from using the superannuation tax shelter to avoid the tax system. That is what needs reform....and that is precisely what this governments refuses to do. Ask yourself the question WHY.
    Adrianus
    10th Jun 2015
    7:40am
    "The only real talking point should be how to stop the greedy rich folk from using the superannuation tax shelter to avoid the tax system. "
    mick,
    I thought the real talking point was to make super a better proposition for the not so greedy, not so rich, folk???
    Budwah
    10th Jun 2015
    1:18am
    $58,444 per annum to live a comfortable lifestyle is a joke to what pensioners are allowed to live on.
    Adrianus
    10th Jun 2015
    8:19am
    Are you now saying you would prefer to have a higher pension rather than,
    Pink batts in your roof.
    Faster internet.
    School Halls. OK maybe some had to be pulled down.
    200,000 more religious fanatics on welfare.
    Entertainment through $70m worth of Carbon Tax advertising.
    A new set top box.
    Look the list goes on but my point is we got all this extra stuff and now you want more? Some would say that's a tad selfish.
    Anonymous
    10th Jun 2015
    10:11am
    I'd rather have higher pensions than give $30 billion in tax cuts to the richest 20% and $9 billion to the Reserve Bank that it didn't want. Study history, Frank. The Howard Government was the highest taxing and most wasteful in Australia's history. It was the Fraser Government that stole the Welfare Fund that should have provided for the retirement of every Australian (because we all paid into it!). And this Government has doubled the deficit in just 16 months.

    Labor made some mistakes, for sure, but they can't compete with the wastefulness of the LNP, and they certainly can't compete with the unfairness of the LNP and it's over-indulgence of the rich.
    Adrianus
    10th Jun 2015
    10:51am
    You obviously didn't watch the killing fields last night? I had to check in order to make sure I wasn't on the comedy channel.
    Anonymous
    13th Jun 2015
    8:46am
    The morons in government now doubled the debt, Frank. The trouble is ALL politicians are morons and watching ANY of them is like watching comedy. We need to turf the whole lot out and put some real people in there.
    Chris B T
    10th Jun 2015
    9:42am
    All other earnings on money invested attract income tax at the rate of where it is on the individuals tax return.
    I certainly don't see a problem with taxing super earnings above $75k.
    It should be $50k @ 15% than $75k @ 30% but I don't make those decisions.
    At this level is still very generous.
    Anonymous
    10th Jun 2015
    10:22am
    Absolutely right, Chris. And as the mother of 3 kids who are working hard and paying huge taxes, I think it's disgusting that retirees on high incomes (and $75,000 for an individual IS HIGH. My kids are professionals and earning less than that!) don't pay their fair share of the costs of running the country. How greedy can you get - to object to paying a miserable 15% of the earnings OVER $75,000 for a retired individual?

    Whatever the cause - and I agree it's government mismanagement, at every level and by parties of every persuasion - we DO HAVE a budget problem. Everyone should be willing to pay what they are reasonably able to help fix it, so that our children can enjoy the prosperity we worked so hard to bequeath them.

    If my earnings go over $150,000 for myself and my husband, I'll feel very very happy indeed writing that cheque to the ATO. I've paid tax all my life despite being very hard up, and I've seen the rich pay far less and whinge, and it turns my stomach. Paying tax, if you can reasonably afford the impost, is a privilege. You drive on the roads. Your kids attend the schools. You have the right to claim help if you are injured or fall very sick and if you are struggling in old age. Why the hell shouldn't you feel obliged to pay your fair share to provide those benefits?

    And who cares what you did or didn't pay in the past? The past is gone - done - finished. This is NOW. We have a problem. Our kids and grandkids are threatened with loss of the lifestyle we worked to bequeath them. And some selfish individuals here are angry at being asked to contribute a tiny amount of the EXCESS income that they DO NOT NEED to solving that problem.

    The LNP first tried to grind the poor further and further into poverty to make THEM pay for the problem. When that failed, they tried to attack the savings of the battlers who struggled to accumulate a nest-egg, but don't have enough to be self-sufficient. Now Labor has put forward a proposal that allows those who have way more income than they need to accept just a little of the burden, and the privileged scream blue murder! Shows just how disgustingly selfish they really are.

    10th Jun 2015
    11:53am
    OMG! I'm shocked, horrified and appalled. I knew some politicians were inept, but what I was just told about Scott Morrison... well, if it's true, it beggars belief that he could be a Minister.

    I just received a letter from a Senator who challenged Mr Morrison about the proposal to tighten the Assets test. He says that the Minister told him the SOLE TARGET of the proposal was rich superannuants who had drawn down on their assets, tax free, to qualify for a pension that they otherwise would not have been entitled to.

    WHAT A WILD,STUPID, UNFAIR ASSUMPTION! Who the hell does this idiot think he is, jumping to such conclusions?

    I'll bet plenty of part-pensioners who will be affected by the new asset levels tried very hard to accumulate more in their superannuation fund and haven't drawn ANYTHING. Sure, there are plenty out there who cheated to qualify for pensions - buying expensive homes, gifting to kids before turning 60, etc. Most of the cheats WON'T be affected, but plenty of honest battlers will.

    I hope someone in the media will challenge Morrison on this proposal and demand he explain himself, apologize for acting on a wild assumption, and withdraw his cruel and unfair proposal to victimize a minority who in no way deserve this unfair treatment.
    Peterrj
    11th Jun 2015
    3:38pm
    Rainey, aye???? I so am a 'cheat' if if 'gift' to my children before I turned 60??? Ever since my children were born I have been providing $$$'s for their food and shelter ... and you say I am a cheat???? I think that you should,have a chill pill.
    Anonymous
    13th Jun 2015
    8:48am
    You are if the sole purpose of the gift was to qualify for a pension you otherwise would not be entitled to, Peterrj. Sorry if my statement wasn't quite clear. It was intended to suggest that there's anything wrong with gifting to kids - but those who gift vast amounts before turning 60 specifically to dodge the assets test ARE cheats, whether what they do is technically legal or not.
    Anonymous
    13th Jun 2015
    8:49am
    In any case, the issue here is Morrison's apparent assumptions.
    MacI
    15th Jun 2015
    5:20pm
    Rainey - We were one of those couples who gifted our children to help them get into the housing market. I was made redundant at age 60 and we decided to use my redundancy payment to help our children. We were well aware that the timing of when we gave them their gift was important in regard to the Aged Pension down the track but our primary motive was not to maximise our Aged Pension entitlement. Nonetheless we considered it prudent to gift them earlier rather than later. You seem to suggest that to avoid being labeled a cheat we should have waited until I reached pension age before we gave them a gift or perhaps we should not have gifted them at all.

    Since then we also gifted one of our children to support them financially while they were unemployed for a year due to illness. In this case timing didn't come into it and our Aged Pension entitlement will be impacted for some time to come.

    I'm offended by your constant accusation that people who gift their children and are prudent enough to time it to maximise their pension are cheats.
    counting pennies
    14th Jun 2015
    3:04pm
    I gross just over half of $75k,work 34 hours a week,am single, with two non-dependant sons living at home. I am also 13 years away from pension age.I would love the opportunity to earn $75,000 and not pay tax,and would gladly hand over 15% on earnings above that.Money begets money but you cant take it with you.
    Dollars over Respect?
    14th Jun 2015
    4:43pm
    Yes, of course our current Govt is failing the majority of Australians who have worked hard and paid their legitimate taxes all their working life. It would appear that the ASFA and Westpac submissions should mean an immediate investigation can be commenced. People who earn over $120,000 per annum from their super investments certainly don't need tax concessions. Politicians are probably too timid to risk upsetting those greedy, wealthy individuals who hold a great deal of power and will do all they can to hold onto such unjustifiable advantages. I'm astounded at the quoted figure of 475 individuals earning on avg over $1.5 million pa tax free from their super investments in retirement!
    Lescol
    15th Jun 2015
    10:33am
    So how do either side propose to tax the Oz super earnings of non tax residents i.e. those who retire OS where it can be cheaper? Now its 30% upon every dollar.