22nd Jan 2016
Superannuation: super-dooper spin
Author: Kaye Fallick
Superannuation: super-dooper spin

According to Treasury officials, 70 per cent of Australian retirees are currently receiving a full or part Age Pension. This is projected to decrease by only three per cent (to 67 per cent) by 2055. So clearly, for the foreseeable future (the next 30 years), most Australians will retire on some form of pension. 

It is argued that a higher proportion of self-funded retirees is desirable and that our current superannuation system has been unsuccessful in reinforcing this shift to self-funding.

In fact, as noted in the Murray Financial Services Inquiry, our superannuation system is both ill-defined and poorly targeted. Why? Because, as frequently highlighted by think tanks, including the Grattan Institute, and per capita, the tax concessions on super favour the top 20 per cent of wealthy households at the expense of the broad mass of citizens.

Australian superannuants also pay the third-highest fees of all Organisation for Economic Co-operation and Development (OECD) nations, which equates to about $80,000 in eventual retirement income for a 50-year-old male.

Reviewing and changing these two critical inputs – tax concessions and fees on super – could ‘shift the needle’ considerably in terms of ultimate retirement savings for many ordinary Australians. But recent federal governments seem to possess little political will or interest in tackling these big issues.

Many not-for-profits and seniors’ associations have consistently highlighted the need for a comprehensive review of our retirement system that covers all aspects of the Age Pension, superannuation and retirement income–related tax. This call has been ignored, so the debate continues to fragment into disjointed demands for ‘part’ policies on each of these items. And, as such, in overlooking the ‘whole’, the debate has become ill-informed, partisan or both.

For instance, in Peter Martin’s ‘pop’ at the super industry – ‘Don’t fall for the super industry’s scare tactics, The Sydney Morning Herald, 8 December 2015 – he claims that the Association of Super Funds of Australia’s (ASFA’s) estimation of income needed for a “comfortable” retirement as “absurdly high”.

Mr Martin’s selective list of household items could be seen to support his claim, but what he does not clearly state is that both “modest” and “comfortable” estimates are based on the assumption that the retiree fully owns their own house. In fact, Peter Martin states “… living costs plummet on retirement. Most retirees no longer face a mortgage, a saving of 30 per cent.”

Whilst that may have once been the case, the fact is that many baby boomer retirees are now entering retirement with debt, much of it mortgage-based, as reported by CPA Australia, which claims 37 per cent of retirees have a significant debt. It is simply wrong to assume the living costs of many retirees will “plummet” anytime soon.

A close reading of the ASFA living costs in retirement for those living a modest lifestyle reveals how truly straitened their circumstances are. For instance, a modest single is allocated $2.66 for weekly public transport, $20 per month for hairdressing and no expenditure at all on home repairs. What kind of planet would you live on where these amounts would cover your needs? I doubt Mr Martin would be happy if this was his lot. 

Similarly, former senator Amanda Vanstone, who is enjoying an extremely generous parliamentary pension, also shares opinions on the lot of the poor and the need to tighten their entitlements, as witnessed in her recent diatribe on tax and super, which was simplistically selective in substantiation and bordered on an ideological rant (‘Our tax system is heading for trouble and tinkering won’t help, The Age, 7 December 2015).

First up, Ms Vanstone’s alarming claims about the dependency ratio: the ratio of people of so-called ‘working age’ (15 – 65) to those aged over 65. Ms Vanstone claims that we are heading for “oops or oh-no” territory as this ratio changes from “7.3 people of working age for each person over 65” in the Whitlam era, to 4.5 today and “say” fewer than three in 40 years.

However, using age dependency as a measure is no longer valid, as many people over 65 are working, and with the Age Pension age currently increasing to 67 by 2023, perhaps 70 by 2030 if Abbott/Turnbull Government legislation is pursued, the ratios will automatically improve. But more importantly, as Dr Professor Katherine Betts has concluded, the dependency ratio in the boom years of the 60s – i.e. labour force participation – was much lower still, and the sky did not fall in.

Ms Vanstone’s all-too-easy (and discriminating) generalisations that “oldies” are causing all increases in health expenditure is also wrong, according to Treasury estimates in successive intergenerational reports. Much of the increase in health spending is caused by a rapidly increasing number of tests for Australians of all ages, not just “oldies”.

Ms Vanstone claims that demonising whole groups of people (because of their income) is infantile – yet she writes off 5.4 million baby boomers as a “demanding bunch” before concluding “it’s all gong pear-shaped”. Finally, she reaches her point, which supports Margaret Thatcher’s claim that you do not make less-wealthy people richer by making the rich less wealthy.

It is on this point, when applied to retirement income, that Ms Vanstone is really off the mark. 

Our current retirement income system has two top-line numbers that we should all understand. Firstly, the Age Pension currently costs $48 billion per year – i.e. 2.9 per cent of Gross Domestic Product (GDP). Over the next 40 years, it is projected to increase by just 0.07 per cent (to 3.6 per cent). This has been described by academics as manageable – not a blow out. In fact, the percentage under Treasurer Peter Costello was higher still.

Secondly, the very generous superannuation tax breaks currently cost $45 billion, and are projected to overtake spending on the pension next year. The tax breaks, as stated, favour the top 20 per cent of households – ‘the rich’, as Ms Vanstone might describe them.

A relatively simple policy revision of these tax breaks and an adjustment to the inordinately high fees charged by super funds would go a long way toward ensuring a much more equitable retirement income system for all Australians, not just the wealthy households.

More spin has been offered by Assistant Treasurer, Kelly O’Dwyer, who is keen to push through legislation that has stalled in the Senate: in particular, a proposal for one-third of super fund directors to be independent and for funds to have an independent chair. This change, she maintains, will provide a baseline for improved governance of super funds.

Yet this same government has wilfully ignored repeated calls for a royal commission into financial advice, in the wake of what appears to be a white collar crime committed by advisors from financial planning divisions within just about every major bank, including the Commonwealth Bank, Macquarie, ANZ and Westpac. 

How can this call for governance be serious when ordinary Australians are loath to trust planners employed by financial service organisations that manage the lion’s share of the wealth industry? And this reminds us exactly why we need to question the ‘super spin’ we are fed about retirement income on a regular basis. There is a narrow cluster of dominant voices that support the status quo. We must ask why – and for whose benefit it is that our retirement income system is yet to be properly overhauled.





    COMMENTS

    To make a comment, please register or login
    Chris B T
    26th Jan 2016
    9:56am
    Joe Hocky put it we have lifters and leaners, there are other groups like himself and Vanstone the Weaners. The ones that MILK AS DRY then DICTATE to OTHERS in there ERRORS.
    Even at 5% of GDP would be avery affordable outcome, at 2.9% GDP what is there to complain about.
    Marginal increase in the Higher tax bracket, ensure the Companies pay taxes according to where it is earned.
    Set Pensions to % of THE HOCKY's & VANSTONE's Govnerment Package Pension/WEANERS FUND.
    Kaz
    26th Jan 2016
    10:25am
    ...and we keep paying for these leaners in their more than comfortable retirement when we resented paying for them in govt! Who keeps giving them a voice to talk rubbish - it is so frustrating!
    MICK
    26th Jan 2016
    1:56pm
    So why do you keep voting Liberal????
    bob menzies
    28th Jan 2016
    9:04pm
    mick, with the exception of the hawke regime I have voted country party then liberal depending where I live - because the fundamental values set down by Menzies are what I believe in - now been voting 49 years.
    The alternative has been labor (DLP, Democrats,Greens never had numbers to govern) so mostly could not vote for as I detested whitlam, admired Keating as a treasurer but he was divisive as PM, Rudd was a dud and Gillard was hopeless.
    During 50s and 60s labor had an affilliaton with communism (evil) and from 70s have mostly shown no ability to manage our money.
    The liberal party is far from perfect but is far better than the alternative.
    Mick - there are some saying that if Turnbull wins a majoity similiar to Abbott liberal could well be in government for next 10 years.
    Given our debt and deficit situation not a bad thing.
    However your right to keep stressing fariness and distribution of wealth
    TREBOR
    26th Jan 2016
    10:19am
    Past politicians - failed in the general run - should be tied to a chair and gagged for ten years..... they continue to come out after a string of disasters to this country and economy and people, with the most inane and self-serving comments while chewing off the fat of the land.

    Time to overhaul their entitlements first.
    Kaz
    26th Jan 2016
    10:26am
    I agree and fully support looking at that aspect first!
    Mygasheater
    26th Jan 2016
    11:27am
    And former politicians should be subjected to the same asset income test applied to other pensioners before being able to access their pensions.

    Amanda Vanstone is addicted to taxpayer money she has N ABC radio show which she is paid for.
    TREBOR
    26th Jan 2016
    12:28pm
    I suppose we're only speaking the 'politics of envy', though. Shouldn't dis-respect those who've been 'successful' in politics now, should we?

    I get sick of these over-blown clowns who've handed us an endless string of disasters pontificating about how we should do better - I, for one, would have done a hell of a lot better WITHOUT their interference.
    MICK
    26th Jan 2016
    1:57pm
    Don't you love grandfathering clauses which protect the rorters.
    TREBOR
    26th Jan 2016
    2:05pm
    Yep - easy to see who's playing with a stacked deck and dealing cards off the bottom...

    All rorts and corruption should be outlawed retrospectively and immediately.
    OnlyGenuineRainey
    26th Jan 2016
    10:36am
    It's very clear that our aged pension system is highly affordable, but our superannuation tax system is NOT. So why is the government determined to change what's NOT broken and leave in place what is? Oh, that's right. Because the privileged benefit from the broken system and we have to look after them at all costs. Just keep screwing those who've always been screwed and have no power to fight back. Trouble is, we are rapidly approaching the point where the screw can't be screwed any tighter. Then what?

    Hockey said he feared social media. He should! It's exposing the truth. And the truth will come back to bite the bastards who are manipulating the economy for personal gain. Change has to come. It's just a question of when.
    particolor
    26th Jan 2016
    11:20am
    Of coarse its Affordable ! But Unliveable ! :-( :-(
    Adrianus
    26th Jan 2016
    11:50am
    The unprivileged don't have super or much to speak of just like they don't buy a lot of petrol. And the privileged don't have welfare and pay big taxes. And the inbetweeners have a mix. Where's the balanced point equality? Just who is actually getting screwed here??
    TREBOR
    26th Jan 2016
    12:32pm
    You mean it's harder to live off the fat of the land than go without? Wow - I should have become an ascetic years ago if that works so well!

    The privileged have massive welfare in their tax and super hideaways - Kerry Packer's $25k ring a bell? Nothing against The Goanna personally, but hey - let's be real for a change.

    These are all areas the need addressing before trying to chop earned and paid for pensions.

    If the government of two parties was genuine about super replacing -pensions, they'd make sure it didn't cost so much for the poorer people to access super benefits.
    MICK
    26th Jan 2016
    2:00pm
    Agree Rainey. And this government continues to refuse to go after the multinationals rorting our tax system and the wealthy doing the same. This is not an 'affordability' crisis.......it's a blatant refusal to collect revenue from the wealthy and their business interests (big business). At the same time we are all fair game and that is who THE CURRENT GOVERNMENT has been coming after since the day it was elected.
    Over to voters: get rid of the dishonest lowlife bastards!
    OnlyGenuineRainey
    27th Jan 2016
    3:40pm
    Who is getting screwed, Frank? Let me give you an example. How much does someone who gets a full age pension for 30 years in retirement collect from the taxpayer? Let's guess at around $ 1 million, shall we?

    Now, how much does a so-called self-funded retiree with $3 million in super collect in tax deductions to help him accumulate that wealth over his working life? Remember, all fund earnings are taxed at a highly concessional rate, in addition to concessions on voluntary contributions. Then there's the employer contribution that's tax advantaged - helping the employer contribute more generously - and often comes from the public purse anyway (if this retiree was a government or semi-government employee). Let's just agree that a hefty amount of his $3 million was put in by the taxpayer. If he has a lot more than $3 million, the taxpayer contributed a lot more.

    Now, how much does the battling retiree who owns a modest home and has about $500,000 in PERSONAL SAVINGS AND ASSETS collect from the taxpayer (after Jan 2017, assuming Morrison's disgustingly unfair ''reforms'' aren't overturned)? NOTHING. NIL. NADA. ZILCH. He has to live off his modest savings, pay GST, fuel tax, alcohol tax, gambling tax, cigarette tax, and heaven only knows what else, and he can't get a pension - but he didn't get super tax savings either.

    This example might be just a little simplistic, and it does exclude consideration of indexation of the pension threshold over time and the impact of erosion of personal savings by having to live on them, but hopefully it makes the point.

    The lifters and battlers are being screwed, that's who. The leaners are bludging on the rest of us, and there is no end to their greed and selfishness.
    Adrianus
    27th Jan 2016
    4:07pm
    Yes, who is getting screwed Rainey?!
    Are you assuming that the full aged pensioner pays no tax but receives $1m from taxpayers during a 30 year period?

    "Now, how much does a so-called self-funded retiree with $3 million in super collect in tax deductions to help him accumulate that wealth over his working life? "
    Well nothing. He collects nothing. He simply pays a lesser amount of tax. You are aware that the max contribution is $35k? (I think?)

    I'm sorry but I don't have the mental capacity to follow the argument, let alone do the calculations.

    I don't even understand how that full pensioner suddenly finds $500k in 2017? And then loses his entire pension?

    Answer this question please?

    If the government wants to create some incentive for people to save long term for their retirement what tax advantage should they introduce and how can they make it fair regardless of a person's income? Should the government make super contributions on behalf of members if they are out of work?
    Tom Tank
    26th Jan 2016
    11:23am
    We never get a fair and equitable tax system until all governments start being fair and equitable. The LNP have clearly shown, including under Turnbull, that they favour the top end of town.
    The proof of this can be seen in their absolute failure to ensure that businesses pay the superannuation contributions their employees are entitled too. Not only failing to ensure this they are reducing the penalties for those businesses who don't meet those obligations.
    Imagine what the Royal Commission into Trade Unions would have said if unions had been doing something like that.
    Come on Turnbull do the right thing instead of mouthing platitudes.
    Mygasheater
    26th Jan 2016
    11:38am
    If the government closed the tax loopholes that allow big businesses to ship profits off shore, that allows global companies to do business here and pay little or no tax, ceased subsidising mining, and a whole slew of private sector businesses, the amount of tax revenue raised would fund a world class welfare, health and education system.

    Neither political party is prepared to offend the big end of town (there donars and potential future employers) to put in place policies that put the future of Australia and Australians before narrow sectarian and self interest.
    Mygasheater
    26th Jan 2016
    11:57am
    The first indication a business is in trouble, is when they cease paying employees super contributions into their super funds.

    But it's OK folks, if the business goes bust the "good ole taxpayer" will pick up the slack and pay the employees entitlements, (not all, only some).

    Thanks be to Little Johnny Howard who put the scheme in place when his big brother's company went bust owing employees wages, super and leave entitlements.

    Onya Little Johnny, looking after the working man.

    Aside from that, it was the Johnny and Pete Costello Show that sold 3/4 of Australia's gold bullion reserve in 1998 'cause gold was "old fashioned in the modern financial world".

    They sold so much, that while they were selling it the price dropped because of the glut on the market.The LNP the "best managers of the Australian economy".

    Oh guess who bought it? Yep, the Chinese.
    TREBOR
    26th Jan 2016
    1:05pm
    I saw coupla days ago that Google was getting ready to pay the British Government $234M in back taxes.... funny that.
    MICK
    26th Jan 2016
    2:03pm
    Yes Mygasheater.

    Tom Tank: we now need a Royal Commission into the Liberal Party with wide ranging powers to look into election funding source, whether or they are in effect bribes, and what is expected and given in return. That is where the real corruption will be uncovered methinks.
    Next we need a Federal ICAC. Bet neither side will back that one. Especially not the right wing government we currently have.
    TREBOR
    26th Jan 2016
    2:07pm
    Neither 'side' will back a Federal ICAC because they are terrified of what it will dig up...

    We demand it right here and now......
    TREBOR
    26th Jan 2016
    11:24am
    So far every comment seems to me to be on the mark. It is not the Pension scheme that is bust - it is the Super scheme - and the sole reason for continuing it as it is is to benefit those with the most, as it does now, while materially hardly raising anything for the rest in retirement.

    Told yez all ages ago we are essentially just another hick Third World Banana Republic, where all the goodies go to the inner circle as if by some right, and the rest are hammered for the slightest dissent in every way possible.
    Dollars over Respect?
    26th Jan 2016
    11:34am
    We must remain very diligent in watching and resisting the proposed changes for our highly successful industry super fund governance system. The wealth contained within the funds has drawn the interest of so called 'Independent' directors who get their next jobs using insider contacts and political lobbyists. They are pushing and hoping to have this market opened up to them, so they can skim off their greedy, excessive and, to date, unnecessary fees. Don't fix what is not broken once again. Let's hope the Senate continues to be successful as an honest House of Review in this case!
    Adrianus
    26th Jan 2016
    11:53am
    Those who have control over the super trillions are squeaky clean, just like all the unions they run.
    Snowwhite
    26th Jan 2016
    12:51pm
    I suppose Frank all the corrupt Liberal MP's in NSW who have been outed are squeaky clean too?? Even your Fascist mate Turnbull isn't squeaky clean. What about Onetel? At least he can afford to represent himself in court at a reduced rate!!
    There's corruption on both sides of politics and demonising the Unions is only one aspect.
    At a rough guess I would say the Libs have more than their fair share of corruption in the ranks. What about Brough??? And Bronnie?? It's just they have the MSM on side. Having the Murdoch press on side is a powerful tool. Actually I'm sooooo looking forward to Abbott being re-elected as he's the gift that keeps on giving. Good luck Turnbull and Morrison then!!!!
    Adrianus
    26th Jan 2016
    1:05pm
    Yes it's all hockey's and Abbott's fault.
    Tom Tank
    26th Jan 2016
    1:15pm
    Ah Frank you cannot let the chance to kick out at the unions can you.
    The fact is that Industry Funds have employer representatives on their boards. The unions were responsible for setting up the funds, farsighted weren't they, but they don't control them.
    A little checking and recognition of the facts would go a long way.
    TREBOR
    26th Jan 2016
    1:16pm
    If they are producing a better return than the commercial funds - exactly how corrupt could they be, Frank? Certainly not as corrupt as those managing the commercial funds....

    Logic 101....
    Adrianus
    26th Jan 2016
    1:28pm
    Some industry funds have experienced superior returns and there is a logical reason for that, which has nothing to do with corruption or the lack thereof. You can find corruption in any office.
    It's simply a matter of having a low cost distribution system.
    Some members are forced into an industry fund and have no choice. Therefor the fund in question has a very cost effective way of securing new members.
    That is now changing so that new members will have freedom of choice and industry funds will need to spend money to find new members.
    Industry Funds have already ramped up media adverts and returns have dropped as a result.
    Facts 101 :)
    TREBOR
    26th Jan 2016
    2:03pm
    Point is - if they are all allegedly so corrupt - something not proven by any yardstick yet - they would surely be digging into their member's funds... neh?

    So it follows that if the amount of digging into member's funds is the yardstick for measuring corruption - the commercial funds are more corrupt in their management than the industry ones.

    Whether people are forced or not - surely the running costs are the same.... unless someone is being greedy.

    I'm in an industry fund - I always had the option of putting it somewhere else.... there is no compulsion involved.
    MICK
    26th Jan 2016
    2:14pm
    Normal crap from Frank (the poster, not the other one above) the government sponsored stoolie.
    What you can't bear Frank is that the retail super funds are being abandoned by hoards because they have been ripping the public off for decades. So now that the high performing industry funds come along you and your mates in this government are trying to torpedo them lest your affiliated election contributors in the retail funds stop giving.
    You are what you are....a despicable Liberal Party mouthpiece.
    Adrianus
    26th Jan 2016
    2:48pm
    Biased viewpoints from both of you. I on the other hand have no connection with retail funds or industry funds.
    TREBOR you are the one calling corruption not me. The cost of distribution has always been a very significant proportion in the total cost mix.
    MICK
    26th Jan 2016
    3:26pm
    The other 'Frank' Frank. Birdbrain!
    Mygasheater
    26th Jan 2016
    3:26pm
    Squeaky clean, like the banks and insurance companies the run super funds. Like the banks and the insurance companies that sell those super products, who by law must operate in the interests of the shareholders. Profits before customers.

    It was those same squeaky clean banks that provided financial advice to retirees that ensured the financial advisers got big bonuses and the retirees lost their super money. Not one person has been charged over this. Not one.

    The industry super funds by law have to run in the best interests of their fund members. IT'S THE LAW.
    Mygasheater
    26th Jan 2016
    3:29pm
    No Frank,

    it's Little Johnny Howard and Peter Consello's fault. All those tax cuts to the wealthy, cut to company taxes etc during the mining boom is the reason for the revenue problems we have now.
    Adrianus
    26th Jan 2016
    3:59pm
    TREBOR, have you heard of IR21?
    TREBOR
    26th Jan 2016
    5:14pm
    I've heard of - don't know a thing about it. Contrary to popular misconception, I don't know everything....

    "Those who have control over the super trillions are squeaky clean, just like all the unions they run. "

    'Squeaky clean' - sounds like a jab at corruption to me....
    Adrianus
    26th Jan 2016
    5:39pm
    Yes, squeaky clean was a bit over the top, but please understand that I get a little excited when I hear so much anti Government nonsense on Australia Day. Especially when the perpetrators are getting their pockets picked by the very "friends" they are defending. "Popular misconception"? I wouldn't say that. :)
    TREBOR
    26th Jan 2016
    7:13pm
    I doubt they are all squeaky clean - they all pull excessive amounts for their simple task of sitting down and signing off on the investment ideas put forward by flunkies. Should be paid by the hour.... part-time casuals, not 'retained employees' in a sinecure, which is what they are in reality, just like all 'board' members.

    All happy to accept their Entitlements etc without question and feel totally justified in doing so....
    TREBOR
    26th Jan 2016
    7:18pm
    I have no political 'side here - I support none of the major parties and am a Republican, and have said for years that no major party has the answers demanded right here and now to resolve the looming disasters for Australia in many ways.

    Labor is no better and has done nothing to remedy any super or other issues - but has contented itself with biting the pillow for its women members and giving them a mandatory (dictated) 50% of seats regardless of electoral performance IN THEIR HOME ELECTORATE, which is where they should stand if they stand at all. Same applies to men - these clowns parachuted in from the NSW (Newcastle/Sydney/Wollongong) party power need to be booted out by their electorate.

    If you don't live long time there you cannot support your constituents fully and will always be a party hack and nothing more.
    Adrianus
    26th Jan 2016
    8:02pm
    I agree with politicians being local to their electorate or at the very least residing. Should be mandatory!!! I don't have a political side either. I try not to be too critical of a sitting government, but will be if they are really bad.
    This is a great country but could be so much better in many ways.
    If Turnbull wants to win the hearts and minds of Australians then he needs to show us his vision for our future. We are already alive and feeling like the time is right to feel that way :)
    My friend from Newcastle tells me the councils are amalgamating and in Sydney. This is a good start.
    MICK
    26th Jan 2016
    9:59pm
    I too love this country but it breaks my heart to see what this government is trying to pull off. Whilst I have no time for either side of politics I'd give the current government a fair go if it were not for the fact that it is trying to take money from average and poor citizens and give it to the rich who already plunder us all. Morally deficient and malicious to the extreme! The only description I can find for the Howard leftovers who feel offended that the nation does not kiss their behinds and bow down to them. I won't be. Neither should anybody else....other than Frank the messenger of this disreputable lot.
    Rosscoe
    26th Jan 2016
    11:54am
    This LNP Federal Government is robbing the poor and letting their rich mates get away with ripping off other Australians. And my observation is that most seniors voted for the LNP! Thanks a lot for letting this incompetent mob rip us off! And now they want to raise the GST! The Federal Government ripped up the tax agreements between Canberra and the state/territory governments. Abbott/Turnbull and their crowd caused this problem.
    MICK
    26th Jan 2016
    5:59pm
    It worries me when voters vote for 'their' political party rather than for somebody (anybody!!) who appears honest. More like supporting a footie team.
    Let's see if the very people complaining about being done over make the same mistake AGAIN. I am willing to bet they will. If so then it reinforces the stupidity of people and they fully deserve the consequences. Pretty obvious to even blind Freddy who owns this government.
    Sundays
    26th Jan 2016
    12:04pm
    This is an excellent article. Amanda Vanstone is a hypocrite who will receive a parliamentary pension which is far too generous. As for Peter Martin, I would love to know how much he spends. I found his comments very ageist as if people in retirement needed less. In fact, the ASFA figures don't allow for some items eg gifts, and things like health funds, and Internet fees are what they are. You can shop around but still high
    TREBOR
    26th Jan 2016
    1:27pm
    Correct except that A Man Named Vanstone already receives here indexed pension for life..... few years in politics stuffing everything up for us all and it's a sweet ride for life.
    MICK
    26th Jan 2016
    6:01pm
    Vanstone is just one of a number of extremely vile people whom one associates with the current Liberal Party. I could not vote for such decrepit human beings no matter who they represented. Many people will and I have to pity them.
    ozrog
    26th Jan 2016
    12:12pm
    As we get older we look for ways to invest what we have to gain most with less tax and to allow us to claim pension. Millionaires and companies do it so as not to pay tax and the government says that's ok but let yhe dear old retire try it and there is outrage. Lets be fair about this.
    Bella54
    26th Jan 2016
    12:24pm
    You have it summed up in a nut shell.
    MICK
    26th Jan 2016
    6:03pm
    Rules for some and (different) rules for others. That is the offensiveness of it. But then you have to understand WHO controls governments and in WHOSE INTERESTS many of them act. The current one is a wholly owned subsidiary of big business so expect the obvious. The GST is coming and lower corporate taxes for the rich are already locked in.
    So who you gonna vote for????
    Paulodapotter
    26th Jan 2016
    12:51pm
    I love Faye Fallick. What a great article. Explodes all the myths perpetrated by the self interested. Until our government deals with the inequity in our financial systems, they'll never be able to sell their budgets. Sure, you can't make the poor richer by attacking the rich, but you can provide the services needed by the many if the rich pay their fair share. Until this government cuts welfare to the rich, they'll never afford the services needed for the rest.
    TREBOR
    26th Jan 2016
    1:33pm
    If you think that's bad, Paulo - consider the alternative - Labor with their 50/50 enforcement. What kinds of policies do you expect then? Two year's full pay maternal leave etc? Pull a politician style pension the moment you retire to become a mother?
    MICK
    26th Jan 2016
    6:08pm
    Observation: the mainstream media play the tune of big business with an occasional (short!) diversion so that it can claim to be unbiased. It isn't. The fact that the ABC is under attack from the current government shows just how desperate the rich are to silence any dissent. Having failed to sell off the ABC to a commercial interest this government has now put an ex Murdoch/ex director of Google in as the CEO. Of course both Murdoch and Google have vested (business) interests and will be happy to close down the facts and discussion. Total control is coming if this government gets back in.
    Paulodapotter
    26th Jan 2016
    6:11pm
    While I have little faith in Labour's policies, you're observations are rediculously overstated. Try and be more reasoned if you can.
    MICK
    26th Jan 2016
    6:34pm
    They are the facts Paulodapotter. Scott is being replaced. And just like all the Abbott appointments the new CEO is not neutral. Obvious why....they couldn't sell off the ABC so now they intend to scuttle it from the inside.
    I am not pushing a Labor barrel. In fact I frequently suggest that voters pick their best Independent to change the corruption endemic in both parties. Where I do draw the line is to state that my belief is that any proper investigation of the Liberal Party will likely turn up a huge web of corruption....but maybe I am wrong. Bring it on!
    Adrianus
    26th Jan 2016
    6:51pm
    mick, stop pushing the labor party and use your logic. You're sounding like you idolise Bill Shorten. You know he cant drive don't you???
    TREBOR
    26th Jan 2016
    7:22pm
    Not without a phone stuck to his ear....... guy was pulled over today right next to we fish and chip eaters down by the moorings and oyster beds, and the cop asked "Do you always use your phone in your car while there is a police car behind you, sir?"

    Cracked up watching.... and on a public holiday, too...... he was only just under 0.05 too..... Jay-zuz - at double demerits.... eight points for using the phone....
    Adrianus
    26th Jan 2016
    8:07pm
    Ha Ha Ha, some of those cops have a great sense of humour.
    Eight points?! That's enough to thump you in the tear ducts.
    TREBOR
    26th Jan 2016
    9:11pm
    I actually know a lot of them since I work in a club and drive the bus.... even got breath tested NYE.... they are all pretty good down this neck of the woods.... they know the good guys from the bad.... and they do have a sense of humour these days.... that's what comes of hiring smarter ones...
    Paulodapotter
    26th Jan 2016
    10:39pm
    Sorry Mick. I was referring to Trebor's statement.
    TREBOR
    27th Jan 2016
    9:29pm
    Paulo - I think many need to come to grips with some simple realities. The current push for Affirmative Action and preference of employment in nice super earning jobs such as public service, banks, state jobs etc - for women - will in around twenty years see us in a position where women will retire with more super than men.

    Is their going to be the same outcry then? I doubt it.

    On top of that, the entire discussion of some mythical 'wage gap' boils down to one thing - women work 78% of the hours that men do - and EARN 78% of the income that men EARN as a result.

    Not rocket surgery - the same argument applies to super - in that twenty years I guarantee you we will see the same old guff about some mythical 'wage gap', at a time when all the women who've benefited from Affirmative Action since 1980 or so will be retiring, and will be BETTER off in super than men.

    I'll bet you won;t hear the same old argument about women retiring with less super then.

    You retire with the super you earn from your earnings - nothing more and nothing less.

    It absolutely appalls me that our new Australian of the Year believes in all this 'wage gap' nonsense, while admitting that he doesn't understand why it occurs - and yet he will campaign over it like he did with all the purported discrimination against women in the Armed Forces.

    Utter nonsense - women can do a very good job - but they are not the same generally as men in their capabilities - fine example - after three + years of 'women being able to apply for combat postings' in the Army - NONE are in the Infantry etc.

    They have equal opportunity - they just don't fit the bill.

    Now - before you launch at me as some mythical 'misogynist' - I've written a World War IV series - many - at least 50% - of my combat infantry characters are women who do extraordinarily well, up to and including being the head of the US Chiefs of Staff.

    I simply apply reason and reality to my discussions - and I do not and will not accept name-calling in response.
    Mike
    26th Jan 2016
    12:53pm
    Hockey smashed the retirement plans of an estimated 560000 part pensioners who worked and saved for their retirement under THEN current laws, and called disabled people rorters whilst he himself rorted $288 travel allowance of taxpayers money to pay of his Canberra holiday house that he had in his wife's name and Bromwyn Bishop allegedly personally misused hundreds of thousands and was protected by Abbott and Christopher Paine and of course Abbott spent an estimated $500000 of taxpayers money on a personal vindictive witch hunt on Peter Slipper. So of course the money has to come from somewhere, so hit the poor MIDDLE CLASS again.
    Mygasheater
    26th Jan 2016
    3:35pm
    But it's alright Mike, Hockey is now pulling his parliamentary pension of near $200,000 pa on top of his salary as Ambassador to the US and rent free accommodation.

    He probably hosts an ambassadorial function every night so he does have to pay for groceries either.
    MICK
    26th Jan 2016
    6:10pm
    And Hockey refused to touch the superannuation Tax shelter for the rich, multinationals not paying tax in Australia and Tax SHelters per se which the rich use to reduce their taxes to zero in some cases. Our current PM has a Cayman Islands tax shelter. Tells a compelling tale!
    ozrog
    26th Jan 2016
    6:20pm
    Hockey doesnt need ofshore accounts he writes it of on the million of dollars worth of farms and other properties he owns.
    TREBOR
    27th Jan 2016
    9:31pm
    ... all of which must run at an enormous loss every year.... there's your problem... tax concessions without merit....
    BrianP
    26th Jan 2016
    1:19pm
    Yes Kaye - You have hit the nail right on the head.

    As everyday people in this country we really need to form a united front to make "rich" political leadership take away the tax breaks for the rich in our super system. When are we going to do something about it? It is the most effective way to protect age pensions for us all.
    MICK
    26th Jan 2016
    6:11pm
    A bit hard when the rich own the game and when their government is in power. Follow the money trail!!
    MICK
    26th Jan 2016
    1:56pm
    You are just confirming what I have been saying on this website foe several years. Indeed the rich ARE plundering the tax deductibility of super (why wouldn't they?) and fees are high for the retail funds.
    Vanstone is of course a Liberal Party stoolie who is happy to take her 'entitlements, just like Bronny, and who constantly attacks those who have no money to live on. This creature is an enigma of the worst kind and I personally find her attacks on average citizens sickening.
    Don't expect the current government to can the superannuation Tax Shelter for the rich. We can't have that! Do expect this government to tax average citizens out of the water and to continue coming after retirees until they get the family home. Vote Liberal and you vote for the bastards who are going to skin you. Your choice. Voters have been warned!
    Adrianus
    26th Jan 2016
    3:32pm
    mick it's not just the rich, all tax payers are plundering the tax deductibility of super. I say we should cut corporate tax rate so that profits are not channelled to super.
    MICK
    26th Jan 2016
    6:12pm
    Whilst you are technically correct average Australians are using the system to get a decent retirement stash whilst the rich, who have their retirement plan already in place, are using the system to avoid the top marginal tax rate. There is a difference!
    Adrianus
    26th Jan 2016
    6:24pm
    What exactly is that difference? Because I'm out of the loop on this.
    ozrog
    26th Jan 2016
    6:27pm
    I don't have extra to put into super so i get no benifit at all. Not like public servants who get as high or higher than 18%contributed by the government. Be real most incomes are beliw $35,000.
    TREBOR
    26th Jan 2016
    9:24pm
    Pretty simple, Frank - most people can't put in extra or 'salary sacrifice' - to do the latter takes INCOME. Even though the amount that draws a tax concession of 15% has been reduced to (I think) $30k annually - how many people are earning the kind of money to put that much aside annually?

    In the past there was no 'roof' on the amount you could salt away into superannuation - which is why we have people living on a million dollars annually tax free for life.

    Mick mentioned 'grandfathering rorts' - that's exactly what happened here - and I have no doubt that when the super system was set up it was deliberately designed to benefit the rich more than the peasants - who - in most cases will not have enough to NOT draw some pension.

    Remember when Keating sold this bill of goods - he said -"How would you like to retire with $380k in super?" Well - at today's rate that would return you around $19k to feed yerself and the Missus... you'll get part pension... in fact... 19k is around $764 a week (for sake of ease) - after being allowed to earn $408 pf (threshold plus work credits) you would actually lose all of around 50% of $1120 from pension - or about $560 split between yerself and the Missus...... still leaving you with somewhere around $800 in couple pension, total $2300 pf or so. (think that's the figures, but I could be wrong about 'work credits' - you need a job, without which you'd be able to income around $200..... work it out.. you'd lose $1200, leaving you wit around 250 pension plus your $1528). No rich.. but OK.... but home many actually have nearly $400k in super?

    The whole deal was never designed to actually benefit the working class - and the rich had their clear advantage to salt away indefinite amounts for twenty years at a discounted tax rate and then receive a heap annually tax free.

    That is mick's point... and mine.
    TREBOR
    26th Jan 2016
    9:28pm
    Damn - that's $764 a fortnight not a week...

    Do it again.... and write 100 times - "I will not confuse weeks with fortnights."

    So you get a couple pension of about $1400, but you lose half of $764 - $200 (or so allowable income)...about $277, leaving you with $1133 + $764. OK - but not rich in the present environment.
    Adrianus
    26th Jan 2016
    10:38pm
    TREBOR, so what you're saying is that there are people who cannot save because they spend all of their income? Well that's why their employer makes a compulsory contribution on their behalf.
    There are those who don't work and that's why we have a welfare system.
    Are you complaining about inequality?
    The sort of inequality that means a "rich" person puts $10,000 in an interest bearing deposit and a "poor" person depositing only $1,000 gets less interest?
    You are asking for a non aspirational society where outcomes are the same regardless of input or effort.
    I cannot agree with that view. Even many communist countries see no value in that these days.
    I am in favour of reward for effort because it benefits the whole of society, rich and poor.
    Paulodapotter
    26th Jan 2016
    10:47pm
    You confuse effort with enterprise, Frank. Not all are enterprising, but can still work bloody hard for little reward. Your observations are of those who are narrow in their thinking. The well off love to say of the poor, that it's all their own fault. Stupid and baseless reasoning. We can all find examples of support for our ideas, but to make generalisations based on examples is nonsensical.
    MICK
    26th Jan 2016
    11:48pm
    Frank: It never ends. Always the shell game, avoiding the discussion and trying to pin blame on the opposition. No wonder Kevin Rudd owned up on national TV that he was responsible for WW2.
    Your post belongs in the same bin as they always end up in Frank.
    Adrianus
    27th Jan 2016
    7:48am
    Paulo, if you read your post you will find it is contradictory.
    Yes there are some people who feel that life is good when they have control over their destiny.
    "The well off love to say of the poor, that it's all their own fault."
    Now that is a great example of stupid and baseless. Only the vengeful hateful would have an attitude like that.
    You stick to your "poor me" attitude and wallow with like minded people. What do they say? Misery loves company?
    TREBOR
    27th Jan 2016
    9:35pm
    I've been both rich and poor in my lifetime - I think I know the difference. The poor doesn't come from any lack of effort - let me assure you - but it sure can come from some dismally poor decisions by managers and governments over the past forty years.

    Frankly (sic) - both such groups owe me a very large amount of money for what they've taken from me. They are all, frankly, thieves and liars.
    Adrianus
    27th Jan 2016
    10:15pm
    You misunderstand obviously because I did not say being poor comes from lack of effort. But what I will say is that effort is not guaranteed to make you poor. I of all people would know that. I have also been both poor and well off several times during my life. So I understand the fickleness of good fortune.
    I don't want to see Australia develop into a country that rewards those who whinge the loudest. I would rather the kudos go to the doers, the achievers. I will not change my mind on that.
    Eliza
    26th Jan 2016
    1:57pm
    Mygasheater is ... SPOT ON when she/he says:
    'former politicians should be subjected to the same asset income test applied to other pensioners before being able to access their pensions
    HEAR HEAR ... They did their job and SO DID WE ...
    WHY SHOULD WE BE TREATED DIFFERENTLY.???

    It's not enough to just say it on this forum ...
    WE NEED TO INSIST ON EQUALITY IN TREATMENT.
    Speak out loud and long ... In every space and place we can.

    The rich should be made to pay their taxes ... and the politicians stop budging on society ...
    Eliza
    26th Jan 2016
    2:18pm
    One of my poems from a short time ago ...


    Demand a Revolution

    Rise up and say your piece; be not afraid to make it known
    that some would hide their fortunes beneath a haven cloak of foam Contemptuous of their countrymen - become revealed as leaches.
    Sucking out the life blood of our nation; town and country

    Callously they glut on us in troughs of manufactured fear
    So I say, rise up and speak your piece, make it loud and clear
    Expose them one and all for the fatness of their greed
    And how off ordinary people they ravenously do feed

    Demand a revolution; justice, retribution we must forge.
    In the end of town that's big - where all the fat cats gorge
    hunt them down, call them out, exposing all their shame
    Let them know you understand their slippery evil game

    Education, health, and care of aged, quail under falling axes
    Rise up and say your piece, make them pay their taxes
    ozrog
    26th Jan 2016
    3:18pm
    Just remember folks when ever a company folds the exec freeze the super fund so someone may lose 30yrs worth. Super should be quarantined and protected. The money belongs to the workers not corrupt bosses.
    Mygasheater
    26th Jan 2016
    3:43pm
    When a company folds it probably has not paid employees super in to their funds for some time.

    The employees can claim some of this money back through the federal government scheme put in place by John Howard when his brother's company went bust.

    There needs to be a change to the Super Guarentee Act that super must be paid into the employees fund monthly not three monthly. The ATO should be given the staff and resources to follow up companies that don't not pay the super on time. They are supposed to follow up the defaulters but mostly don't.
    Adrianus
    26th Jan 2016
    5:56pm
    Mygas, I think it will go to monthly to fall in line with recent changes at the ATO.
    MICK
    26th Jan 2016
    6:14pm
    Another 'loophole' which successive governments have let go. I often wonder if it was their super would they have acted immediately? Well, we all know the answer to that!
    ozrog
    26th Jan 2016
    6:17pm
    Mygasheater super guarantee only applied that once and shows how favors for mates are wide spead. Tell that to dick smith employees.
    Rae
    27th Jan 2016
    10:33am
    As Superannuation is 9.5% of wages these business owners should be able to be charged with theft by the workers. The theft should be reported to the police. If I stole someones hard earned money I would be arrested.

    Super payments should also be paid fortnightly into funds at the same time wages are paid. With modern technology this is not a hard ask.
    Just direct debit set ups that every property manager employs to pay rents to landlords.

    It is unfair that employers have the benefit of months of employees wages and those wages are not invested earning for the worker.
    The whole system needs an overhaul.
    Adrianus
    27th Jan 2016
    10:41am
    Rae, I agree. I think the idea of monthly reporting has come about as a result of a shake up at the ATO. My understanding is that it has progressed to implementation stage. We may see wages being paid monthly by employers to fall in line with monthly super contributions. I'm not sure of the precise details.
    Old Man
    26th Jan 2016
    3:26pm
    I think it's unfair to make comment on the compulsory superannuation scheme because it's still in its infancy. When Keating legislated it in the early 90's, it started at 3% which was not nearly enough to make any difference. It presently sits at 12.5% but as people have a working life of some 50 years ±, it will still take some years before compulsory superannuation is paid from the first day of starting work.

    When compulsory superannuation has been paid over a person's full working life, there must inevitably be a huge impact on the age pension payments. Those who worked for employers who had a contributory superannuation fund either get no age pension or get a reduced pension. I envisage that this will become the norm when Keating's scheme has been allowed to run its full course.

    Yes, there are people who have taken their entitlements as a lump sum and have splashed it all against the wall and are now reliant on the age pension but I believe that this group is a small minority. This group may well be the ones who lived from payday to payday and thought that the future would take care of itself. Please don't put these people up as a generalisation of the "average".
    Old Man
    26th Jan 2016
    3:51pm
    Please add "until retirement." at the end of the first paragraph.
    Adrianus
    26th Jan 2016
    5:52pm
    Added Old Man.
    Did I hear Keating and his mates in Labor recently say that Compulsory Super was not meant to replace the Gov. pension?
    What the hell is it for then???
    Why then should people save all their lives to blow it all in order to get the aged pension? Sounds crazy doesn't it?
    Of course it is meant to eaze the welfare burden.
    MICK
    26th Jan 2016
    6:19pm
    Old Man: the rich have been milking the superannuation loophole for decades. In the good old days they could put through hundreds of thousands of dollars from what I recall. These days it is a lot less....but still a good lurk.
    I agree with you Frank but remember that we were all sold the lie of superannuation and boomers never had enough time in the system to build up a reasonable stash. GenYs will have more....unless the moronic idea from this current government to let them pay off their HECS debt is put in place....in which case GenY will be in the same leaky boat as boomers.
    What you miss about the pension is that it is being taken away and retirees are going to have to get used to living in poverty unless this bad policy is reversed........and then revenue collection from the rich happens. It won't under the current government! This government is after workers. Not bosses!
    mathsy
    26th Jan 2016
    3:34pm
    Just a correction to above article. A change from 2.9% to 3.6% is actually a change of 0.7% of GDP, not 0.07% as stated in the article, in fact 10 times as much as stated. In an article that claims to represent the facts it is important to get the facts correct. This is not a percentage of govt spending but of the whole economy. It is a high percentage of the govt spending. The govt can only spend what it has so to talk about it as a percentage of the GDP is rather superfluous, because the govt has no access to the whole economy for spending. it would be better to refer to this as a percentage of govt spending or income. This apparently small change of 0.7% is actually an increase of approx 25% of the 2.9%, which would have to be considered significant in anyone's books. Now I am not suggesting that we shouldn't spend more on looking after elderly citizens, as many of them spend their time in very difficult financial situations, but we do need to carefully use the numbers to give a true and balanced picture, and not pretend that this change is insignificant. The abuse of statistics may appear to give credence to an argument but used wrongly (such as here in this article) statistics can be very misleading. The article is claiming that a change of 0.07% is obviously nothing so why would anyone baulk at that, but this is very misleading - a change of 25% of current govt spending is obviously massive)
    There certainly does seem to be an urgent need to address the tax concessions that give disproportionate advantages to the very wealthy, who can already afford to look after themselves very comfortably in retirement.
    Adrianus
    26th Jan 2016
    3:53pm
    The industry fund sector, ­created by Labor governments and strongly supported by unions, has poured billions of dollars into managed funds that have set up scores of entities in the Cayman Islands.

    Construction union boss Dave Noonan and Ms Kearney are on the board of Cbus, which has $1.3 billion invested with BlackRock Investment Management, part of a global group that has 54 funds registered in the Caymans.

    Retail union leader Joe de Bruyn, a key figure in the Labor Right, is on the board of the retail industry super fund REST that allocates money to the Holowesko Global Fund, which is registered in the Caymans, according to Cayman Islands Monetary Authority documents.
    ozrog
    26th Jan 2016
    3:57pm
    Frank better than company funds that steal you super to prop up their businesses treating it like it belongs to them. Soon as they go bust super gets frozen. Frank where is your super??
    Adrianus
    26th Jan 2016
    4:27pm
    ozrog, I agree. That's bad and those fund trustees should be brought to account. I don't have any super in the Caymans, that's for sure.
    TREBOR
    26th Jan 2016
    5:23pm
    Hmmm - just like the Federal Futures Fund and Turnbull and so forth.... Ah - The Caymans...
    Snowwhite
    26th Jan 2016
    5:41pm
    Frank what about the Turnbull family's investments in the Caymans????
    Adrianus
    26th Jan 2016
    5:42pm
    I looked at the FFF asset mix a few months ago and could not see the Caymans link? Must admit not in detail.
    ozrog
    26th Jan 2016
    6:33pm
    What super fund are you in Frank??????
    ozrog
    26th Jan 2016
    6:33pm
    What super fund are you in Frank??????
    ozrog
    26th Jan 2016
    6:33pm
    What super fund are you in Frank??????
    Adrianus
    26th Jan 2016
    6:33pm
    Snowwhite, I think we could safely say that the $billions of industry funds would dwarf Malcom's and Lucy's retirement nest egg.
    Adrianus
    26th Jan 2016
    6:42pm
    ozrog, I'm not sure I understand your question?
    ozrog
    26th Jan 2016
    6:58pm
    It's easy Frank where is your super money?
    Adrianus
    26th Jan 2016
    7:47pm
    Do you mean what assets does my fund hold? Why is it any of your business?
    ozrog
    26th Jan 2016
    8:00pm
    Frank you seem to be bagging industry and retail funds. I was just wondering where your super is. Your right it's non of my business about assets. If not the 2 above mentioned. I was hoping you could enlighten me about a good one. That's all.
    Adrianus
    26th Jan 2016
    8:13pm
    Like 95% of super funds these days. Mine is a SMSF, which I manage myself. Sorry, I misunderstood.
    ozrog
    26th Jan 2016
    8:17pm
    Thanks Frank.
    MICK
    26th Jan 2016
    10:03pm
    ozrog: FYI Frank1 is a Liberal Party stoolie. Paid to post anti Labor and anti union comments. Often when nothing to do with the discussion. WHat more can I say..........always the same tired crap!
    Paulodapotter
    26th Jan 2016
    10:52pm
    Spoken like a true fundamental right wing Liberal, Frank. I bet you want Mr Rabbit back.
    MICK
    26th Jan 2016
    11:50pm
    Thought we had a rabbit in government already. Actually thought we had many rabbits. They must be breeding.
    Adrianus
    27th Jan 2016
    8:08am
    I'm saying, we are getting zilche from an opposition which has nothing but school yard remarks aimed at discrediting a sitting PM. They don't seem to care which side the sitting PM is on either.
    When do they talk about us and our connection with the destiny of this country?
    Rae
    27th Jan 2016
    10:46am
    The way I see it Frank those of us who worked very hard and saved hard are getting zilche from the ALP, the LNP and the Greens.

    Most of our sitting members resemble schoolyard bullies.

    Personally I see the Unfair and Unsustainable Pension legislation as yet another childish attack on the unions. This time hitting out at those retiree unionists.

    Once upon a time you could respect and trust your sitting member and get more than a meaningless letter from them if you needed help.
    Adrianus
    27th Jan 2016
    10:58am
    The way I see it. The LNP and Greens have one leg on the footpath looking down at the ALP in the gutter which has a tight grip on their other legs.
    You'll have to explain this to me please? I'm just getting through my second coffee.
    "the Unfair and Unsustainable Pension legislation as yet another childish attack on the unions." How so?
    Rae
    27th Jan 2016
    3:17pm
    Last years Fair and Sustainable Pension Legislation unfairly targeted those who had compulsory superannuation. Because these people deferred consumption to save for retirement and based their irreversible decisions on Centrelink rules the retrospective changes deny them justice.
    Most were state public servants, teachers, police, nurses many were unionists. I believe this was why Morrison went after them. There are not enough of them to really cost much money and most only received a token part pension anyway but it did give all those discounts non savers receive.
    These were not high income earners Frank but they will now cut back on non essentials thus hurting the local community. The little extra they received was spent on a few discretionary items that they probably could not afford while paying tax then super contributions, all non concessional, and mortgages, child costs etc.
    The only reason I can see to do this for a few million dollar save is because they were in the union. It is one of the problems the LNP have.
    Adrianus
    27th Jan 2016
    3:36pm
    Rae, We were all "targeted" weren't we?
    We all defer consumption to save for retirement don't we?
    It is a big mistake to have welfare as part of your financial plans 40 years into the future, especially when the government has been making noises for at least 30 years that the aged pension will soon be unaffordable in its present state.

    " Most were state public servants, teachers, police, nurses many were unionists." Where do you get this data? Or are they the ones screaming the loudest? There are many more worse off. How about those who had no super?
    Shouldn't they be deserving of your sympathy?

    Wouldn't you like to see these same people get a reduction in their income tax? They would have more take home pay?

    I can only think you may be talking about a couple of specific cases which obviously there are not enough details to support your accusation.
    Can you be more specific?
    Rae
    28th Jan 2016
    8:34am
    Something about the way we are allocating resources is terribly wrong when Australia cannot afford to pay an aged pension at retirement to all workers the same way almost all of the other OECD countries can.

    Superannuation can be wiped away in days during a big fall in markets and older savers will not recover. They just don't have the time. It was a great idea for the financial system.They get the fees and commissions up front.

    You know as well as I it would be better to borrow $20 000 at age 20 and invest it, let it run for 47 years than the 9.5% on low wages over a life time. In fact buying just one house for $12000 in 1970 and renting it out would have worked out better than 9.5% over a lifetime for the average earner.

    Download a copy of the % returns for the government superannuation funds and take a look at the years they made only 3% return. I can't believe no one else has ever wondered how that could happen Frank.

    Where was the money going? Now a Royal Commission into Superannuation Funds both financial and industry might be a jolly good idea.

    As to those who had no super, a lot I know are very well off as they had their 10% savings to invest in real estate in the days before SMSF and were not in compulsory vehicles like the public servants.

    I became interested because I run spreadsheets to pick up market glitches. It is a hobby. Sometimes it makes me lots of money.

    Take the after tax contributions into an unfunded government fund and the returns less fees over 45 years and run it against a similar amount invested in ordinary residential real estate over the same period add rents less fees, and negative gearing.
    You will see what I mean.

    As to a reduction in income tax for low income earners the piddling $9 a week or whatever they usually get does not compensate for indirect tax increases. Only the high income earners and companies will come out in front.

    Let us hope they alone can keep up demand in our real economy otherwise we will have the daddy of all recessions.
    I spent time in Las Vegas and Florida in 2009 and it was terrifying Frank. I believe our lawyers playing financiers are leading us into strife. Picture all the Westfields empty and the parks and carparks full of people camping out. The Wallmarts had food races just to feed everyone, just inside the doors. Meats and salads at reasonable prices. I talked to a lot of these people. They were working but the landlord had lost the home.

    You just don't cut spending, raise taxes going into a deflationary period.
    Adrianus
    28th Jan 2016
    10:22am
    Rae, very interesting. I share your concerns because we , like many Australians are just trying to fit in and play the game based on the rules of the day.

    Our governments have been doing the wrong thing by us. They have not cracked down on rorts.
    Doctors getting rich on Medicare.
    Politicians and Councillors getting rich by re zonings etc.
    Government employees on big salaries yet zero production.
    It's far too depressing to list the many different methods of waste.
    Many of these decisions are as a consequence of mass behaviour.
    I guess this is to be expected in a freedom loving, aspirational democracy?

    I went into a SMSF 33 years ago and have seen that many rule changes that I have said to myself, alright I'm gonna slap the next PM who allows another change.
    I have seen the struggle to minimise fund borrowings beginning in the early 80's, then after about 18years the reintroduction of gearing through Warrants. You cannot plan long term with certainty this way and you cannot retrospectively compare one asset class with a legal structure which has more changes than a catwalk model.
    Where there exists a pool of money, there will always be a pool of people wanting to take control of it.
    Many years ago business owners used super as a way of controlling staff loyalty with company contributions vesting in the long term. It still exists today, especially in Government Super schemes.
    If you spend 5 years in the army these days you can discharge but your super remains as a yearly statement in the fund. What faith and courage must a young person have to think it will be there for them when they reach retirement?
    Especially when we hear stories like the QLD government using PS super to pay down state debt.

    It's easy to make money Rae as you know but not many people do it because they don't have the discipline. They are not willing to exchange something in return for this wealth.
    On the other hand some acquire wealth by doing something that they love with a passion.
    People are getting swept up in the real estate run in Sydney and Melbourne but there are many places around the country where price drops during the same period are common place. Perhaps the ripple theory has not yet reached these locations? Perhaps it is a result of the bubble talk? All I know is that regardless of past performance it is unwise to build similar expectations unless you can point to a cause and effect.
    Any fool can know.
    The point is to UNDERSTAND.
    -Albert Einstein
    Just thinking about your Florida experience and the way you described it gives me cold shivers.
    The US recovers. Why??? how???
    One of the main reasons for their recovery (and I understand they are not out of the trouble entirely) is that the Fed held it ground and gave the US citizens some certainty ...ie 0% cash rate for 7 years etc.
    Meanwhile in Australia we had the exact opposite from our government which actually provided the impetus and uncertainty to drive down growth.
    There were many mixed messages from the top. Fiscal and Monetary policies lacked cohesion which added to uncertainty.
    This is why I prefer a Conservative government especially while our economy is struggling. They have gone about the business of stopping the waste and placing more value on debt.
    Debt is only good if it achieves a positive result. Only a fool would think a solution to stimulating an economy is to give citizens cash to spend. What happens when this trickle up effect runs out of steam?
    Not all spending is good Rainey.
    Peking
    26th Jan 2016
    4:08pm
    Great article Kaye Fallick! Picking up on the final paragraphs, the failure to pursue endemic corruption in the retail super industry is a disgrace, and is clearly influenced by massive connections of the banks to political parties, and the influence of the rent-seeking lobbyist industry. It took whistleblowers to get any focus on the failings of advisers to act on the clients' behalf. Even then, authorities were disinterested in pursuing the corruption links.

    Financial advice is invariably contaminated. Retail advisers were still talking down the GFC as it happened and they kept pumping up their masters' products. It left wage earners to make their own decisions despite "professional" advice. So it goes....
    So, let's have the Royal Commission we should have had years ago.
    In the meantime invest in educating the public about super investment basics.


    The Super system has to work if we are to decrease the numbers of retirees dependant on the Pension.
    ozrog
    26th Jan 2016
    4:14pm
    Where is your super??
    TREBOR
    26th Jan 2016
    5:24pm
    Once again - mine is in an industry fund and I will be drawing it soon.
    Adrianus
    26th Jan 2016
    5:28pm
    Josh Frydenburg put his super into an industry fund. I don't know if that will stop him from cracking down.
    MICK
    26th Jan 2016
    6:24pm
    Just remember readers that the only corruption of interest to this government is anything to do with Labor and/or unions. Smear!!
    You won't see this government disclose who funds it (big business!) and what the payback is (fraudulent conduct). You won't see this government acknowledge the crooked dealings of its ex MPs who use the business mates network to do their crooked deals. And you will find precious little in the media exposing ex Liberal Party crooks, let alone the relationship between the Liberal Party and big business.
    We need full disclosure and we need a federal ICAC not controlled by any government or vested interest. I won't be holding my breath!
    Paulodapotter
    26th Jan 2016
    10:57pm
    Good on you, Mick. Those who control information, control the world. Why we don't hear more about the IPA agenda mystifies me. They are the LNP's advisors (I hesitate to say "think tank") and their manifesto, once revealed, would shock even the stauchest Lib voter.
    Adrianus
    27th Jan 2016
    8:17am
    Paulo, try to shock us?
    Captain
    26th Jan 2016
    4:50pm
    I find the Treasury figures difficult to accept. As from 1 January 2016, the asset levels will decrease dramatically and 90,000 current part pensioners will lose that part pension (Govt figures not mine, I believe it will be four times as many). I presume that the change is not indexed so as more people retire fewer will receive a pension or part pension.

    Treasury believes a decrease of only 3% in pension payments by 2055, by then workers will have had over 60 years of super contributions!!! That means the average worker who commenced work in 1989 at age twenty and had super contributions and retire at 67 will have 47 years of of super. That means they will retire in 2036 and I would imagine not be eligible for a state pension/part pension.

    Also someone who is now 65 and retired on a pension on average can expect to live for another 20 years, that is until 2036. So by 2036 the baby boomers will be falling out of their trees quite rapidly and those retiring will not be claiming full pensions and perhaps not even a part pension. I don't know what the percentages will be but I imagine it will be far more than the Treasury estimate of 3%.
    TREBOR
    26th Jan 2016
    5:28pm
    Yes - all this fear-mongering is all about just wanting to chop pensions - not about any valid long-term 'burden' on the budget.

    As before - we paid for our pensions - leave them alone.

    ... and bring politicians into line - if they have enough already, they don't need their pension.
    MICK
    26th Jan 2016
    6:28pm
    It's just a game. In the end this government is intending to steal money from retirees and tax average workers more whilst delivering another tax cut to the rich and their big business interests.
    ANybody who believes the utter BS coming from this government just needs to ask two questions: why do you refuse to collect the correct taxes from multinationals and why do you allow tax shelters of all manner for rich Australians? It will not enter into any meaningful discussion on these questions because it is controlled by liars and vested interests.
    Captain
    26th Jan 2016
    8:16pm
    One thing that disappoints me is that people of all ages seem to want to blame others for their own failings. Fees for super funds may be high but if you educate yourself in money matters you can avoid some of the pitfalls.My wife and I have had a true self managed super fund for many years and it costs us less than 0.05% per annum.

    I was in the financial world for a lot of my working life so perhaps I understand more than some, but most people are capable of learning things throughout the it lives. Some reading and asking questions will give you a lot of ideas and information and applying that knowledge is invaluable.

    I have said in other places in this forum that financial management should be taught in schools so that everyone is given the opportunity to gain some knowledge and apply it in their everyday lives.

    Trebor, there was a time when people went into politics to do service for their country, now it is to line one's own pockets. They may go in with a desire to serve however they all end up toeing the party line and forget about any morals and scruples. Remember power corrupts and absolute power corrupts absolutely.

    mick, to them it's a game, to us it's our lives. I agree with you that voting Independent is the way to go, however they all give their preferences to mainly LNP or Labor so what to do? An informal vote is the cowards way out and a donkey vote is not caring and laziness. Like everything in this life you need to do your research in order to gain the best for yourself and fellow man. Do you think most Australians are capable of the discipline to do this? I doubt it so we will continue with the status quo. Two parties, no change of direction for a sinking SS Titanic Australia.
    TREBOR
    26th Jan 2016
    9:09pm
    Aye Skipper... t'was a good post....

    Now let us be about catching that damn-ed whale Moby Dick!

    Kinda like that really.. this chasing politicians.....
    Captain
    26th Jan 2016
    9:51pm
    Trebor, they are never in their home waters every time I try to catch one. Their lackeys always tell me they are out electioneering or some such. I write letters - no response. I wait in offices - alas to no avail. I leave notes in office - alas never receive a response.

    Am I to give up - NO !!! That is what they want, but I am an old codger and find it hard to give up the chase. Others have found out that some people want answers and continue to hunt throughout hot or cold waters.
    MICK
    26th Jan 2016
    10:06pm
    Captain: the issue is that voters need to send a message to the Liberal and Labor that they are on the nose. The first step to fixing rotting corpses.
    I hope that nobody preferences this government though as it has shown us that it is owned by big business and the game is clear: increase taxes for the poor as much as you can and give the rich a tax cut. Immoral. But stupid people may buy it. That's why they are often done over.
    Paulodapotter
    26th Jan 2016
    11:04pm
    I think people are starting to wake up to the government's reticennce to make big money pay their fair share. Until they bring some fairness back and redress the balance, they'll be flat out holding majority power. The independent and small party vote is on the rise and I think we're going to see more hung parliaments. That's a blow in the right direction in my opinion. Hung parliaments are great for democracy.
    *Imagine*
    26th Jan 2016
    11:21pm
    Hey Capt'n I wish that I was in your position. I too run a SMSF. The accounting I do myself so only pay the compulsory ATO levy and the compulsory Audit amounting to about $800 per annum. This is the lowest annual fee possible for SMSF. So if that fee is less than 0.05% or 1/2000 of YOUR fund, then you have at minimum 2000x$800 = one million six hundred thousand in your account and are obliged to draw down 5% or $80,000 per year. Well done you! I imagine that you empathise with most posters on this site.
    jeffr
    27th Jan 2016
    12:36am
    It is really good to read unbiased and common sense views, also finance should be part of the school curriculum. Thank you Captain for your input.
    SA
    27th Jan 2016
    9:10am
    Can someone give me some advice re the nature of super. I have been told that everyone needs to diversify investments. Not have all thier eggs in one basket. All my money is in super. My super is invested in an option that is part shares, cash etc. Does this count as diversified investment? or should I move money out of super?
    Adrianus
    27th Jan 2016
    10:21am
    SA, yes that is the general definition used by the industry and others to describe diversification. A spread across the main asset classes and some spread within those classes.
    The logic behind this is that some of those asset classes have inverse correlations. For example Shares may drop when cash rates increase or Gov. Securities may increase while cash rates decline. The reverse may also be the case but not always the case though. That is to say that as a reflection of changes in the economic cycle which often runs for 3 to 12 years approximately.

    You make a good point though and diversification of investments can be much greater depending on how comfortable you are with the level of diversity.

    The question is a little like how many slices to divide a cake?

    When it comes to the subject of "all my money is in Super" that may or may not be a bad thing. Much depends on your overall situation and your goals.
    Your questions raise the very point which concerned me some months back when most on here were bagging "Financial Advisors."
    I use that term loosely to describe all people who offer advice on "financial instruments or activities."
    If I was faced with your concerns I would seek advice from a "fee for service" Financial Planner. You can ask for an hourly charge, but proceed with caution and Do Check His/Her Bona Fides.
    You may find a Planner in a reputable accounting firm nearby.
    Usually the first interview is free and perhaps in your case you may have your questions answered in that interview.
    There are also Advisors at Centrelink, but I'm not sure of the scope of their advice?
    Just something to think about. These are just my thoughts as a point of discussion and only intended to promote more discussion on the matter. Others may have better or other ideas.
    Rae
    27th Jan 2016
    11:09am
    I'd go with an independent accounting firm adviser as Frank suggests.

    However do read a few books on the subject from your local library.

    You may only have 9.5% to spare for investment.

    Personally I have invested outside the super system and made far more money even after paying taxes. That portion can be used however I like and has far less sovereign risk as the superannuation system rules change every single budget night.

    You also need a great deal of money in super at the moment to generate the same income as the old aged pension and discounts attached. Forgoing gratification, for a working lifetime, for no return depends entirely on your income level while working.

    For the average worker on less than $60 000 a year it is simply not going to be enough to accumulate a return greater than the aged pension.These people would be better off with that 9.5% going into a mortgage in financial terms.

    My final payout in my super fund was less than $450 000 after 43 years contributions. The same amount invested in residential real estate over the 43 years would have let me own 4 houses to generate income. I would have been far better off even after taxes.
    FM
    27th Jan 2016
    9:45am
    Peter Martin and John Daley have been rabidly and Fascistly targeting retirees for the past three years and vilifying them to fit in with Budget cuts. Now in addition to the cuts already made to seniors’ incomes they are working in overdrive to increase the tax burden of seniors in the next Budget to give tax cuts to their constituents high; income earners and business. Why does no one ask who pays John Daley and Peter Martin for their opinions? We could argue that Peter Martin could live on the same amount as a retiree each week and that his salary should be capped at $25,000, likewise John Daley. Why do people treat the ranting of highly paid lobbyists for vested interests as if they have some value?
    TREBOR
    27th Jan 2016
    9:47pm
    Good point - why anyone would imagine that a lobbyist with a specific point of view in mind would actually want to benefit the entire community is beyond me.

    Lobbyists are beneath contempt to me.... paid mouth-pieces and prostitutes who will sell anything to get what they want and get paid for it....
    fedup
    28th Jan 2016
    4:00pm
    I am sure there are a lot of people who know of couples living in public housing who afford overseas holidays, drive very expensive cars etc. when asked why they don't buy a house their response is "why should I" how come there isn't any way these people can be investigated? You don't need a unit degree to see what is going on, there should be more investigators on the job. Public Housing is not a right it should be there only for those who really need it not the smart ones who know how to rourt the systems.
    Adrianus
    28th Jan 2016
    4:58pm
    Yes fedup, I know a family living in public housing with a household income of $120,000 from personal exertion and god knows what else from welfare. They don't drive expensive cars but they have a few of them and they're not cheap.


    Join YOURLifeChoices, it’s free

    • Receive our daily enewsletter
    • Enter competitions
    • Comment on articles