Super tax breaks policy

The Labor party is proposing a change to the contentious super tax breaks

The Labor party is proposing a change to the contentious super tax breaks largely enjoyed by wealthier Australians. In a policy claimed to save $14 billion over 10 years, tax concessions on super would be reduced to a tax-free threshold on earnings of $75,000 in a single year. Above this amount, a 15 per cent tax rate would be applied.

In addition, the current high-income threshold of $300,000 would be reduced to $250,000 at which point a 30 per cent tax rate would apply to contributions to super, rather than the current 15 per cent. Mr Shorten claims that these measures are “all about putting fairness back into the system”.

Such measures are in line with the most favoured Budget 2015 policy change in the YourLifeChoices survey reported on Monday.

With the Liberal Party ruling out any changes to superannuation before the next election, the debate is hotting up.

Read more at SMH.com.au

What do you think? If you earn over $75,000 per annum in your super should you pay tax? If your income is $250,000 per annum, should your super contributions be taxed at a rate of 30 per cnet rather than the current 15 per cent?





    COMMENTS

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    btony
    22nd Apr 2015
    10:05am
    yes,yes,but lets wait and see what happens when and if they get the reins
    Not Amused
    22nd Apr 2015
    10:48am
    I predict with certainty based on Labor's past policy: if Labor gets the reins again, every cent that is saved would go to funding the Centrelink costs of a recommenced influx of illegal, socially and financially dependant foreigners, same as the 52,000 that they rolled out the red carpet for before they were thrown out of government.
    Pablo
    22nd Apr 2015
    11:01am
    Not Amused, a higher proportion of the money "saved" by this policy would go to the welfare bludgers that the Labour Party seems to openly encourage. This Robin Hood system of governing has to stop - people who work and work hard and save their money rather than wasting it should not be continually hit to pay for those who make no contribution to society at all. Stop hitting pensioners and retirees and address those who are bludging on the system.
    TREBOR
    22nd Apr 2015
    12:29pm
    And what 'welfare bludgers' would these be? the unemployed, the sick, the injured, the old and inform?

    Get a life.
    TREBOR
    22nd Apr 2015
    12:43pm
    https://sites.google.com/site/grappleruniversitypublications/home/department-of-irreverent-revolutionary-thought-dirt/welfare-social-security

    The principle of this discussion is that when a person or entity such as business etc gets some subsidies from government prior to pension/unemployment etc - they are already in receipt of Welfare In Advance. You subsidy on super is one such Welfare In Advance......

    Unemployment etc provide security in the event of lack of income and are thus Social Security - not Welfare. That word has become one of abuse and is incorrect in describing the social safety nets in place.

    When I was a child growing up 'welfare' was the boogiemen in the government who would take bad kids away.....

    Australia's gone to the dogs in many ways....
    Adrianus
    22nd Apr 2015
    2:02pm
    Seems rather odd for the self styled "party of ideas" to actually have an idea? Something's not quite right.
    TREBOR
    22nd Apr 2015
    4:41pm
    ROFL emoticon....... thanks Frank.

    Have to agree there....
    geomac
    23rd Apr 2015
    5:18pm
    Not amused
    I see your dog whistle is in good working order.
    Adrianus
    23rd Apr 2015
    5:31pm
    geomac, Not Amused is 100% correct on that! There is nothing surer. Bill Shorten has said as much.
    Retired Knowall
    22nd Apr 2015
    11:46am
    Orwells "Animal Farm" in action.
    niemakawa
    22nd Apr 2015
    6:33pm
    Yes under Labor we will all end up in the " Funny farm"
    Paicey58
    22nd Apr 2015
    12:05pm
    Any decent accountant will be able to get around these new superannuation measures.

    If this idea does get the nod I hope it's retrospective so that in three years time when I collect my super I won't have to pay the exit tax of 15% . Not having to give the Government $112,500 in tax would be great!!!
    TREBOR
    22nd Apr 2015
    12:32pm
    That's why we need a proper review of the tax concessions available
    LiveItUp
    22nd Apr 2015
    12:51pm
    Exit tax of 15% not too sure what you mean here as the tax you pay is dependent upon your taxable income.
    Adrianus
    22nd Apr 2015
    2:07pm
    Exit Tax? I think you must be stuck in pre 2006? You would enter pension phase and proceeds would be tax free. Even under this so called labor thought bubble your $750k would be free of tax.
    Anonymous
    22nd Apr 2015
    3:30pm
    no exit tax as far as I know!
    Paicey58
    22nd Apr 2015
    4:44pm
    Yes I have an exit tax. I'm in the old government Gold State System.
    In this system you pay no tax going in only get taxed when you draw on the superannuation. If I convert it to a pension with the government at the age of 60 I will pay 15.5% tax on the whole sum that I have in superannuation.

    I can also take a lump sum up to $185,000 but will pay 17.5% on that amount and put the rest into a pension scheme and pay 15.5% on the balance.

    I could also take the whole amount as a lump sum but would have to pay 32.5% tax when I receive it. That would obviously be crazy.

    I have been paying into this superannuation since I was a very young man knowing that in my retirement years I would be able live comfortably for long time. Forward thinking I like to call it.
    Adrianus
    22nd Apr 2015
    5:11pm
    Good on you Paicey58. Sounds like you got a pretty good deal to me, especially if your contributions were pre tax. You showed a lot of sound judgement to persevere over the years. Many people don't squirrel away a few dollars and I don't know why?
    Paicey58
    22nd Apr 2015
    8:41pm
    Thanks Frank.
    Yes they were pre tax dollars and like a lot of other people I raised a young family, bought a house, lost it all with a divorce after 18 years but carried on with the superannuation and now as retirement approaches rapidly I can see the hugh benefit of the superannuation I invested in all those years ago.
    Anonymous
    23rd Apr 2015
    6:58am
    Lucky you to be able to access that superannuation system, Paicey. Most of my generation had no access to superannuation, and many were forced into superannuation schemes that were poorly managed and their money was lost. I know of one ''government'' scheme that took super contributions from workers and, unknown to them, used them to pay the employer's workers compensation insurance premiums. After years of paying in, believing they were earning returns, workers found there was nothing in their funds. It's not necessarily sound judgment that positioned workers to retire in comfort, but in some cases just good fortune. And while many of today's full pensioners are directly responsible for their situation - having been careless or extravagant during their working life - and others are cheating the system, there are many who are where they are because of lack of opportunity, unfair dealing, badly run funds, etc.

    The Labor Party proposal is a good start to implementing greater fairness, but I fear it's too little too late.

    Paicey, I don't see why you should complain about an exit tax having enjoyed greater tax concessions than most on contributions and enjoyed membership in a scheme that obviously delivered reasonably well. Count your blessings.
    Adrianus
    23rd Apr 2015
    9:06am
    Paicey58, you also managed to raise a family AND bought a house?!!
    Lost it all and had to start again?!! That is a real success story. Thanks for sharing your story. I can only hope it inspires others to have a good old Aussie go!

    You know what Paicey58? your story raises a question in my mind.

    Yes.... how can we encourage others to have the courage and foresight to follow in your footsteps?
    I've heard people make excuses on here saying things like "super wasn't around in my day" or "those who have a few dollars are cheating the system."
    It is unfortunate that a forced savings scheme had to, not only be forced on those people, but also fully funded by their employer. Pareto was very intuitive and I'm sure it would come as no surprise for him to learn that 20% of retirees don't need the pension.
    Hasbeen
    22nd Apr 2015
    12:17pm
    We could save a damn sight more by putting all those public servants on a super scheme the same as the rest of us. Compared to the future unfunded liability for our bureaucrats pensions, any saving by attacking the self funded wealthy is peanuts.

    We will know Labor is serious about helping any but unionists when we see a reduction in the cost of the unionised bureaucracy. Of course we will be very busy ducking all those flying pigs by then. This is just another bit of social envy utilisation, to keep the low achievers voting Labor, who has a vested interest in keeping them where they are. I guess if they weren't dumb enough to fall for it, they wouldn't be low achievers.
    TREBOR
    22nd Apr 2015
    12:34pm
    Your public servant super idea has merit since it includes politicians and their flunkeys.. all short termers and contracted, yet we pay them for life out of the public purse once they are gone. Nobody in the real world gets that and it is high time this was stopped and made the same as the real world. The purse is not unlimited.
    Adrianus
    22nd Apr 2015
    2:12pm
    The changes made by Howard and Costello in 2004 did put Politicians into Accumulation schemes like the rest of us. Some of the long term politicians are still in the old Defined Benefit scheme, but as time goes by they will be fewer in number.
    Anonymous
    23rd Apr 2015
    8:13am
    Yes you are correct Frank. Shorten mentioned in his speech yesterday at the Press Club that some were on the old scheme but those who had entered politics later were on the new scheme and treated the same as public servants.
    Anonymous
    23rd Apr 2015
    9:37am
    Hasbeen you may not be aware that we have now have something called the "Future Fund" and the purpose of the Australian Government Future Fund is to fully fund the future superannuation payments of public servants, which currently come from the federal budget.

    "The Future Fund is a financial asset fund - consisting of cash and investments. Its purpose is to enhance the ability of the Australian Government to discharge unfunded superannuation liabilities expected after 2020, when an ageing population is likely to place significant pressures on Government's finances.

    Withdrawals from the Future Fund to pay superannuation benefits may only occur once the balance of the Future Fund is greater than or equal to the Target Asset Level or from 1 July 2020, whichever is earlier. However, expenses associated with the investment and administration of the Future Fund may be drawn from the Future Fund throughout its existence.

    The Future Fund Act 2006 [External Site] established the Future Fund, the Future Fund Board of Guardians and the Future Fund Management Agency."
    TREBOR
    22nd Apr 2015
    12:28pm
    My plan is simple - you can keep the current concessional rate up to a hoarding of what will return you on the market the equivalent of the pension. This is with the proviso that xx% of income is dedicated to super, since to do otherwise would allow people to never reach that position - i.e it is deemed that xx% is dedicated to your super and if you stuff around with it - your problem.

    After that your hoarding is viewed as savings, same as everyone else's $10 a week in the bank for their kids - you pay full tax on it, and you pay tax on the income earned on it.

    Pretty simple.

    Add in that politician super funding goes on the open market under the same conditions. I'm sick of these people pulling $4-5k a week for spending money while still earning in the six and often seven figures elsewhere - something nobody else gets. Retrospective, of course.

    If you can earn, you get no super until pension age.... end of discussion. We're not paying taxes to fund you with extra for life.
    LiveItUp
    22nd Apr 2015
    12:57pm
    If a person takes nothing form the government and pays their taxes then why is it a problem to you? I was taught by my parents that one should save a bit for a rainy day so if that's hording then so be it.
    TREBOR
    22nd Apr 2015
    1:04pm
    You mean you use no roads, transport, no defence, no law and order ... no nothing that government provides? How is that taking nothing from government?

    Because it is a bought and paid for entitlement, same as pensions, unemployment benefits and so on are...

    Perhaps you have some unique system of storing c ash away that nobody else has.... without a single help or handout from government?

    Please explain.... you mean you just stashed it in the bank and saved like a fury? Must have been on a good wicket....
    TREBOR
    22nd Apr 2015
    1:06pm
    Try looking at the issues I've listed - each of which draws a government subsidy in some way - super, negative gearing, tax concessions for businesses.. you name it - all these are government subsidies.

    How is that in any way different from receiving pension etc?

    It's all out of the same purse...
    TREBOR
    22nd Apr 2015
    1:24pm
    The man on the land doing it all off his own bat - with fuel subsidies, assistance with marketing, tax concessions etc.....

    EVERYBODY gets their cut out of the public purse in one way or another. the only questions are how much is right and how should it be balanced across society...
    dougie
    22nd Apr 2015
    4:29pm
    Trebor.
    I know that it is impossible to explain things to the man who knows it all, however if you have been living in the country area for any length of time you will realise that "when the man on the land is making money, the whole area makes money." Every time a farmer makes a dollar it is spread many times through the community. It may not be now true that Australia rides on the sheep's back but farming puts a lot of money into our economy. Look at the millions exported annually. The biggest help the Government could give farmers would be to ban imports of items that can be produced locally. This would ensure the longevity of farmers and keep unwanted pests etc from our shores thus making us a very important country for exports.
    TREBOR
    22nd Apr 2015
    4:44pm
    Thank you for your high praise, dougie - you side note on a side issue is noted.....

    I don't 'know' everything... I just am able to think...... and add up... and see through politicians......

    BTW - I live in a country area..... a place cited as 'in permanent recession' by a local just today.....
    Adrianus
    22nd Apr 2015
    4:45pm
    dougie, I think the best help this government can give is FTA's and relationship building, introductions and breaking open new markets. When you have a really strong commercial relationship good things happen. For example, we will only get navels from California when our locals are out of season. So too will California get Australian oranges at the right time, if you know what I mean. You cannot protect us by closing our doors. We need to work with like minded countries.
    dougie
    22nd Apr 2015
    4:59pm
    Frank,
    I agree but you must only work with countries that play fair both in their product cost - freshness and freedom from pests or disease. This does not always happen as you know. Often products are dumped on Australia at less than production costs or as we have seen recently without full testing and inspection. Home grown is best grown and should be freshest. Supermarkets should not be able to sell controlled atmosphere fruit and vegetables as fresh produce. It should be clearly labelled and this includes local grown and imports.
    Hasbeen
    22nd Apr 2015
    6:26pm
    Do grow up TREBOR. Not paying road tax on the fuel for farming machinery that does not use roads is not a subsidy, it is simple equity.
    TREBOR
    22nd Apr 2015
    10:26pm
    Fertilizer subsidy ring a bell? Government assisted marketing organisations?

    Do grow up, Hasbeen. Your broad brush is very thin.... or perhaps you could explain to me how farmers do it all off their own bat with zero assistance in any way? Just forget the subsidies and so forth.....
    Anonymous
    23rd Apr 2015
    8:15am
    the taxes i paid when working went to pay for roads, health, infrastructure etc.
    dougie
    22nd Apr 2015
    12:29pm
    At last Bill Shorten has a policy, whether it is right or wrong or will ever be introduced if he wins government. Will Tanya Plibersek if she becomes leader of Labor carry forward the same policy, who knows. All I do recognise is that Labor are the spenders and the Coalition are the fixers of the Labor excessives.
    The move by the Health Minister to review certain tests and other matters within the health system is great as I believe there are too many mates referrals either for financial or friendship matters. There should be no tests not available for valid and real diagnosis. However in the last six months I have been referred from one cardiologist to another for a possible procedure which he said was "improbable that he would carry out the procedure."Both of these cardiologists wanted to refer me to a sleep apnoea clinic just to see if I had sleep apnoea. When I refused I was treated as someone not wanting a cure.
    I was also referred for a bone density scan which I did not want but at my GPs advice I attended a small caravan type clinic for the 15 minute scan for no good advice to my doctor other than "Normal bone density for a person his age". There were hundreds of these tests done in the couple of weeks that the testing was available and for what benefit. Good on you Minister.
    TREBOR
    22nd Apr 2015
    12:44pm
    Old Silent Bill likes to test the pulse of the people first before opening his mouth...
    Waiting to retire at 70
    22nd Apr 2015
    12:30pm
    Wow! 'Baby boomers' and biggots have really found a forum on LifeChoices - "influx of illegal, socally and financially dependant foreigners"???

    Thank goodness our offspring are running the world/country and have fortunately not listened to your biggotry. Time to get with it or, preferably, move on. This country has changed and no longer is a place where this biggotry is tolerated.
    niemakawa
    22nd Apr 2015
    7:01pm
    Are you aware what is happening in South Africa? The land of bigotry. Whites maybe bigots but the same can be said of all colours and races.. Many Australians see this Country as a "Shangri La" and have no real concept or understanding of the real world.
    Anonymous
    23rd Apr 2015
    7:11am
    You have a lot to learn, waiting to retire at 70. Some of us have seen, first hand, the problems unwise immigration programs have caused. It's not bigotry, but plain common sense to implement control measures to protect the lifestyle our forefathers fought to hand on to us, and to demand that immigrants respect our laws and values and contribute to growth rather than imposing a burden. We welcomed Italians and Greeks and Chinese and Lebanese and Indians, among others, and they have greatly enriched our society. But unfortunately, today, we are seeing an influx of immigrants who are unwilling to embrace our values and lifestyle and who want to bleed our tax system for benefits they have no right to. It's not all. It's probably not even most. It's sad that some innocents will suffer for the wrongs of the guilty. But we have a major problem - evidenced in detected plans by terrorists and the rorting of child care benefits, to name just two instances that have been made very public. Other nations have far greater problems because they were less cautious in allowing immigrants in. Some foreign governments are now issuing public warnings based on their first hand experiences. ''Our offspring'' may yet destroy everything my father and father-in-law fought to save with their arrogance and foolishness. Perhaps it's time they stopped falsely accusing and started listening to wisdom.
    john
    22nd Apr 2015
    12:38pm
    a lot of these higher income savers are gifted most of their monies (NOBODY earns more than $2000 a week, the balance is a gift from employers) while people in the low paid jobs do not have the luxury of these excess funds. so the higher savings should be taxed at 30%
    jonghay
    retroy
    22nd Apr 2015
    12:50pm
    Another jealous person who just wants to hack away at some one who has worked hard and achieved something in their lives. People who get big pay packets don't work a 40 hour week so do they gift the extra hours to their employer ?
    TREBOR
    22nd Apr 2015
    12:57pm
    You mean ceo's and board members work more than forty hours a week per job? How do they manage five or six boards then and still get time for golf and traveling about? Bob Carr managed all right with his board jobs and his nice little super funder as our Secretary of State to add to his lovely state pension......didn't affect his 'productivity' on a board for a second.....or his salary on it.

    You mean Joe Bloggs in the sewer digging business hasn't worked hard?

    I think you've been listening to Joe Blowhard too long with his idiotic 'lifters and leaners'...
    TREBOR
    22nd Apr 2015
    1:01pm
    According to The Rule of Blowhard, a 'lifter' sits in an office for 25-30 hours a week pushing other people's money around for huge personal profit and all perks and access to insider dealings, and a 'leaner' is one of the peasants out there leaning on a shovel and not actually contributing much to society, or someone thrown out of work or too old to work any more.

    If Joe's 'lifters' do so much for society - how come all benefit accures to them only?
    Grateful
    22nd Apr 2015
    12:40pm
    Again, like the Coalition, populist and poll driven. Just tinkering around the edges. Far too simplistic, still far too generous and obviously no courage. Note that the Opposition still haven't agreed to pass that part of the 2014-2015 Budget that wants to remove the Senior's SUPPLEMENT for Commonwealth Seniors Health Card Holders i.e. $894 per annum and $1,345 p.a. single/couple respectively, with incomes of $51,500K p.a. and $82,400K p.a.respectively. Needs a complete slash and burn overhaul, but, we'll NEVER see it.
    Adrianus
    22nd Apr 2015
    3:11pm
    Agreed grateful. These tinkerings around the edges are so blatantly political cowardice.
    Anonymous
    23rd Apr 2015
    7:18am
    Perhaps the reason the Senate hasn't agreed to remove the Senior's Supplement is that many who are just over the assets limit, receiving no pension, are actually worse off than pensioners when all the benefits are taken into account. I agree the Supplement needs to be reviewed, but we need a total review and overhaul of the system given the recent lowering of investment returns. Labor's policy is a start - but too little, too late and unlikely to be implemented anyway. What disturbs me in Joe Hockey's declaration that he won't take action on unfair superannuation concessions. He is quick to want to slug battlers, but fairness is not a value he subscribes to, and common sense isn't common among LNP politicians (or politicians generally, actually!)
    wondering
    22nd Apr 2015
    12:43pm
    please don't suggest that $75,000 in Sydney is a 'wealthier Australian', and 10 years from now without adjustments and with someone like Shorten, or god forbid another Swan, $75,000 will be certainly NOT be wealthy.
    The whole point of Super is to be self reliant for if need be say 30 years.
    LEAVE SUPER ALONE
    TREBOR
    22nd Apr 2015
    12:48pm
    The issue is - or should be - those excessive fat cats who are using super as a means of evading taxes both before and after... the imposition of the same burdens on those who are not in that category is cosmetic to make it palatable to the High End of town - those who least need it to be palatable. My system is better since it takes into account changes in income - i.e. allows indexing upwards.
    TREBOR
    22nd Apr 2015
    12:51pm
    sorry - that indexing takes place during the life of the super account.... xx% of income is deemed to be super funding (waste it at your peril) - as income rises the % remains the same so there is no problem there. As for the limit before super saving is considered the same as ordinary savings - the point at which that saved amount will accrue the equivalent of pension -that will rise or fall due to market influences such as pension rate, interest rates etc.

    It's really not that hard.
    LiveItUp
    22nd Apr 2015
    1:24pm
    I agree leave super alone. If people play by the rules they are not evading taxes so no crime is being committed.
    Adrianus
    22nd Apr 2015
    4:14pm
    I think Super needs one change. The introduction of a Reasonable Benefit Limit. Say $1.5m or $2m which should be indexed to AWOTE. Then get a firm bipartisan agreement not to fiddle with it for 20 years. One of the main reasons our economy is stagnating is uncertainty. In my lifetime I have not seen so many changes to almost everything since 2007. The Howard years were the golden years.
    TREBOR
    22nd Apr 2015
    4:21pm
    I'm afraid the issue is the hiding of income into super and having a tax concession both at the start and at the end - something that is obvious to everyone including this government. That is a tax minimisation strategy only available to the well-off, and therefore is not only patently unjust, but obviously an allowed strategy far out of line with the concept of providing for a decent retirement.

    The very people with no need for more in retirement are the one who benefit from this loophole.

    It is not I, dear Bonny, who am advocating chopping everyone. My offerings are more than reasonable to provide a reasonable pension sized income for all - only after that does anyone get taxed at ardinary rates on excess.

    My figures as posted show clearly that I do not look at the pension rate - but at the cut-off rate for pension as being a viable income from super - a very generaous position to adopt - it is ONLY those on excessive super who would pay their way.

    I really don't see your problem here. You say you did it all yourself - meaning you got no concessional rate of tax on super etc (education?) - i.e. no Welfare In Advance - yet you defend super recipients at the top end as if your life depends on it and consider yourself more deserving than many who've done all the hard yards of life to end up with little or nothing.

    Deserving ain't got nothing to do with it.

    Let me assure you - you are outside the scope of any discussion of mine.
    Adrianus
    22nd Apr 2015
    4:31pm
    Trouble is TREBOR, "those excessive fat cats" you speak of could also be the very people who control the Senate.
    TREBOR
    22nd Apr 2015
    4:39pm
    They probably are, Frank - in more ways than one....

    On the 'excessive fat cats' line - is a million a year paid out of super a reasonable amount for a pension? Case in court recently between the ATO and a super recipient copping a mill a year after tax concessions...

    THAT is one basis for the current review in Parliament..... I'm just offering suggestions that will safeguard the smaller fish and catch the big fish....
    Anonymous
    23rd Apr 2015
    7:27am
    Those who say ''leave super alone'' are apparently happy to give billions of taxpayer dollars to the wealthy while cutting services to battlers. The system is unfair. It provides no incentive for the strugglers to save for retirement. In fact, it punishes them for doing so. Someone earning $180000 a year gets a tax of about 1/3rd of their earnings on investments in super. Someone on $19000 a year pays a 15c penalty for every dollar of earnings in super. Leave it alone, Sheriff of Nottingham? Those who say that are among the greedy elite, or just plain misinformed.
    We need a balance. We need to retain incentives to save and invest. We need to ensure those who are responsible and hardworking are fairly rewarded. But the current system is obscenely generous to the rich and cruelly oppressive on the poor. Labor's proposal seems reasonable, provided the $75,000 cap is indexed appropriately. Someone earning nearly double the aged pension for couples shouldn't object to paying a small tax on the earnings about that cap - and it really is only a small tax.
    We should also be re-examining the way asset and income tests work for the pension, though. It's absurd to be paying pensions to people whose earnings are well above the majority wage, yet slugging people whose assets are not sufficient to generate an income higher than the pension. The entire system is flawed and needs a total overhaul.
    TREBOR
    23rd Apr 2015
    8:07am
    Fair thoughts, Rainey, and well put.
    Anonymous
    23rd Apr 2015
    8:27am
    I take exception to anyone saying how much a person should be able to" get by on in retirement.

    Many people want to do more than "get by" in retirement. They" want to travel etc; and enjoy their remaining years on this mortal coil and that is why many have scrimped and saved to ensure their retirement years are happy.

    Look at all the grey nomads for instance. They purchase a caravan etc and off they go enjoying themselves. Is it a case of the "green eyed" monster maybe!

    Yes, there are many who for one reason or another do not have the funds or health to do these things but do not try and pull down those who do.

    I dont have a caravan myself and no desire to do the grey nomad thing but I do not begrude anyone who is off enjoying the fruits of their labours. Good on them!
    Anonymous
    23rd Apr 2015
    1:11pm
    Agreed, Radish. We see a lot of green-eyed monsters commenting here. The bottom line is that we have to have a welfare system that provides a decent standard of living for those who have no private means, but we should also recognize the right of those who have worked and saved to achieve their retirement goals to enjoy the fruits of their endeavours. What we should not do, however, is give obscenely generous concessions to the rich and privileged. And we certainly shouldn't make it hard for battlers to save while over-indulging the wealthy. The Greens have actually come up with the most workable and fair proposal I've seen for reforming superannuation. Labor is at least showing some genuine intent, but they have missed the mark by a mile.
    retroy
    22nd Apr 2015
    12:43pm
    Typical Shorten, swaying in the wind.
    Labor could have fixed this when they were in Government, but they were too busy spending other people's money, and now it has become topical he jumps on the band wagon.
    If the country is so bereft that they get elected the difficult task would be where to make the cut off, with many commentators now saying that $1 Million in super is not enough.
    As long as the new tax law applies to Shorten and his cohort then it will be more bearable
    Dollars over Respect?
    22nd Apr 2015
    12:56pm
    Of course, if you are earning more than $75K income from super, you can afford to pay tax on anything above this. No brainer! Decent people on this level of income also won't require a seniors card or access to bulk billing, they can afford to pay for their own public transport and medical expenses at this comfortable middle class level. I can't imagine any ethical person in this group, would resist such essential changes. And, 'Yes', if you earn above $250K pa you don't need the 15% tax break to assist you in saving for your future. The majority of Australians would consider these are sensible, acceptable changes that are now necessary as part of the adjustment needed to remove middle class welfare (an unconscionable drain on our country).
    TREBOR
    22nd Apr 2015
    4:24pm
    Agreed.
    Cap
    22nd Apr 2015
    4:53pm
    So is Trebor'S $75k for a single person or couple, if it is for a single person then the amount would be $150K for a couple who split their super which would mean a super balance of $3m @ 5%.
    TREBOR
    22nd Apr 2015
    8:15pm
    No - I work my calculations to generate an income equivalent to the cut off rate for pension and income - very generous of me since I am a pensioner with a job, who pays tax not only on my pension and income, but loses 50c in the dollar from pension after a certain point. A far worse deal than your average superannuant who has had the benefit if tax concessions cops..

    Those figures run out at about $50k for a single and $75k for a couple income generated from investments etc - after which income ONLY is taxed at the going rate... that rate being discussed (not by me) is 30c in the dollar on EXCESS income from super.

    That leaves the 'nest egg' alone.... not that bad a deal.

    How about you campaign to have working pensioners such as myself, who do this in lieu of superannuation, to get the same deal?

    No loss of pension and no tax until cutoff rate..... after all - pensions are a paid-up annuity based on government taking a levy on 'social security' at an increasing rate for nearly a century now in income tax..... how is that different from superannuation?

    As before - MY job and pension ARE my superannuation - why am I treated differently after a lifetime of very hard work and great loss when it comes to MY superannuation?

    Deserving? I don't know anyone more deserving.
    LiveItUp
    22nd Apr 2015
    1:17pm
    $75,000 is only 5% of $1.5 Million whereas the average over a 10 or 20 year period is probably closer to 10%. So one only needs $750,000 in a super fund before the tax cuts in.

    This will effect many more people than BIll Shorten states in the SMH article.
    Adrianus
    22nd Apr 2015
    2:18pm
    Quite right Bonny!
    TREBOR
    22nd Apr 2015
    4:28pm
    $75k is about the cutoff point for any pension due to income - as related in my postings over time here. The idea is to affect those who have enough already.

    Besides - the difference between paying tax on the excess over $75k is? At 30% you lose 3c0 in the dollar as excess savings. You still get 70c in the dollar - which is still a better deal than pensioners get when their superannuation fund is a pension plus work.....

    Let me hear your views on that one? Just a bunch of 'leaners' I suppose who haven't put it away for a rainy day or had a good time blah blah blah.

    22nd Apr 2015
    2:56pm
    Tax on ANY superannuation earnings is 15%, so the extra tax over earnings of $75,000 p.a. Is then 30% - yes? If this extra 15%, together with lowering of the threshold of the (now) $300,000 to $250,000 with the added 15% tax after that amount is the starting point of what is needed for a more equitable aged pension for the greater percentage of retired people then let's get on with it. What isn't needed is more cutbacks in the existing system as inflation and falling interest rates are eroding retirees' disposable income more than enough as it is without looking to reduce benefits even more for those earning less than $75,000 p.a. In retirement.
    LiveItUp
    22nd Apr 2015
    3:06pm
    The proposal only effects super funds in the pension phase not the accumulation phase. Super funds in the pension phase are now tax free. Proposal is to tax earnings over $75,000 at 15%. If you draw a pension from your fund it will not be effected but the balance of the fund will go down by whatever tax is levied.
    Anonymous
    22nd Apr 2015
    3:29pm
    Bonny, I have tried to find out if it only applies to the pension phase and not accumulation phase.
    I would have thought it would have applied to both myself??
    LiveItUp
    22nd Apr 2015
    3:31pm
    Check out the abc article
    http://www.abc.net.au/news/2015-04-22/labor-proposing-tax-hikes-for-high-income-wealthy-australians/6410800?section=business
    TREBOR
    22nd Apr 2015
    4:33pm
    It is not coming out of the fund - it is a tax on excess drawings from that fund.... the fund will remain and will pay out regularly the same - the only difference is that an excess income would generate an extra tax.

    It seems, Bonny, that you do indeed have a super fund - that means you did NOT do it all off your own bat, but got Welfare In Advance to ensure your retirement via tax concessions. If it was all off your own bat, it would be into a bank account copping full tax along the way as income.... not a super fund.

    All this is saying is that excess super above a certain drawings amount is treated as savings - as I've advocated.

    I still say $75k for a retired couple and $50k for a single is pretty good. It's not like you're trading sheep stations.....
    Cap
    22nd Apr 2015
    5:19pm
    Trebor if you think $75k is pretty good then you must be living in lala land, certainly not in a capital city. Why don't you contact your labour politicians and ask them to stop all welfare payments to couples earning over $75K and then print their replies.
    Adrianus
    22nd Apr 2015
    5:21pm
    Ha Ha Ha! good post Cap. :)
    LiveItUp
    22nd Apr 2015
    5:23pm
    This proposed tax has nothing to do with drawings from a super fund in pension phase. It is to be levied upon the earnings of a person's balance within that fund if their earnings exceed $75000. This is per person not per couple.

    What are savings? Money in a bank account? I have so little money in my bank account that after fees there is nothing left to pay tax on.
    TREBOR
    22nd Apr 2015
    8:28pm
    Cap, My dear fellow - you can't get by on $1500 a week owning your own home etc?

    If you are over $75K and receiving a part pension or even a Card - you are one of those you are seeking to have "my" labor mates dispose of.... you little old welfare recipient you....

    PENSION rate is much lover - about $19.5k for a single and about $34k for a double.... a true rendition of your la la land idea would be that superannuant, who reap the benefit of a free tax ride both ends, pay tax after those rates rather than after the cutoff rates I've suggested.

    Maybe you need to take a good look at what you are discussing before you discuss it.

    Brilliant post, Cap - so far out of touch it beggars belief.
    TREBOR
    22nd Apr 2015
    8:35pm
    **face palms** "It is to be levied upon the earnings of a person's balance within that fund if their earnings exceed $75000."

    So if you pull in $1500 a week from already subsidised super that you collected together at 15% tax, a clear example of Welfare In Advance, you should not be taxed on income over that when you pay no tax already on the $1500 earnings?

    So your rate at which tax cuts in is $75k and you complain? You're not being asked to pay 30% on every cent earned, only on excess income earned over $75k, $40k MORE than a couple on pension only, when you pay zero for any below that after a 15% subsidy to put it there.

    You can't live in your paid for house and get by on $1500 a week - a figure that, under my scheme, will be moved upwards as Costs of Living rise?
    Adrianus
    22nd Apr 2015
    8:36pm
    TREBOR, I think what you're failing to realise is that the aged pension is not designed to keep you in luxury. It is a safety net for those of us who have fallen on hard times.
    TREBOR
    22nd Apr 2015
    8:38pm
    **face palms again** A couple pulling $125k or $2500 a week in retirement from super would pay 30% on $50k = $15k - leaving them $110k or around $2200 a week to live on.

    Get real.... how much do you want after getting a 15% tax rate for years?
    TREBOR
    22nd Apr 2015
    8:43pm
    Frank - Welfare In Advance via subsidised superannuation is in the same boat.... no matter how you cook it - it is still a subsidy designed to permit retirement with something - same as the pension. Why - after a pensioner has paid full tax on his/her levy for social security to get a pension, and a superannuant has had a tax concession, should the superannuant live a life of luxury when the pension does not provide that?

    To even have the money to put away, a superannuant has had a better run - why should that same person then accrue a luxury lifestyle. Superannuation is designed to support living - not luxury. After a certain point it becomes a concession that is unwarranted.

    If, as you say, the pension is only for basics - you just put up a good argument for a pension raise.

    Tax the super and raise the pension then if you can't get by on $1500 a week.
    TREBOR
    22nd Apr 2015
    8:45pm
    If this purported tax was actually impinging on the majority of superannuation holders, it would be an evil - it is only aimed at the higher end who have over-saved for a free ride on super.

    Not that hard.
    Adrianus
    22nd Apr 2015
    8:53pm
    You're talking nonsense now if you think people should aspire to be on welfare. I know some do, but to have a system which encourages that level of helplessness is just plain lunacy. Maybe you should consider a move to a country which shares your ideology? Can you think of such a country?
    LiveItUp
    22nd Apr 2015
    8:54pm
    If you are currently over 60 you can withdraw a pension from your super fund tax free. This does not change under this proposal. Currently if your balance is big enough you can draw millions tax free from your super fund and earn up to $18,200 outside super before you pay any tax. This does not change either.

    What changes is that your super fund pays 15% tax on any earnings above $75,000 that is earn't on your super balance not the balance of the fund.

    I agree with Frank the age pension is only a safety net for those who have no other means of support. If people live in luxury in retirement because they planned for it so be it just don't try to bring them down to the level of the basic age pension just because you didn't plan for it yourself.
    TREBOR
    22nd Apr 2015
    9:08pm
    Where did I say people should aspire to be on welfare? Never said any such thing. I have no ideology, Frank, and you are avoiding discussion of the issues I raise. Try that for a change.
    TREBOR
    22nd Apr 2015
    9:13pm
    Answer this:- How much tax-free and tax-subsidised income should a person be entitled to put away without paying tax?

    The alternative is for people to put it in a bank after paying tax and then pay tax on income derived or to manage their own investment portfolio.

    Again - why should someone be allowed to take a tax subsidy to put away enough to earn a million dollars a year, way over and above what is needed for retirement?

    And at what point should the tax subsidy cut out and the extra income derived from taxation benefited superannuation be taxed?

    How much tax must the taxpayer provide for those with plenty?

    Try to answer the issues and not talk nonsense, old boy.
    TREBOR
    22nd Apr 2015
    9:37pm
    Dear Bonny - your argument about taxation (not the emotive reducing everyone to the same level) would be valid if you had not already taken a tax subsidy to gain investment capital and then benefit from it. This is not any 'ideology' - it is fact.

    Now it is the government - not me, dearie - who is seeking ways to cut back on the EXCESS incomes earned via this easy path that the same government set up.

    Do you seriously suggest that, had you invested money in the open market, it would not have been money already taxed fully, and then accruing tax on benefit?

    Leave personal assumptions out of this - you have no idea who I am and have been and done.
    TREBOR
    22nd Apr 2015
    9:38pm
    Do you seriously imagine you should be entitled to put unlimited funds away at a concessional tax rate, and then draw indefinitely on the proceeds of this without paying tax?
    Cap
    22nd Apr 2015
    10:19pm
    Trebor, I think that you are talking a load of c#&p, if you have been working as you say then you have been receiving SG money paid into your super account, you also do not know how other people have accumulated their super. I myself was in an industry which has had a pension/super for its employees since 1948 and had been paying into it with after tax money since 1976, I also contributed extra after tax money and then retrenchment money when the Company I worked for closed. During the GFC the fund I was in lost 40%, it wasn't until I started my own SMSF that I started to make money. So please I don't need some lefty who thinks that they deserve the same as someone who has worked for his retirement and is taking welfare as well as working and then complains that he has to pay some tax. Don't forget that you can earn $18200 before you pay any tax and still pick-up $18600 from a single pension. If you don't want to pay tax then don't do the hours.
    TREBOR
    22nd Apr 2015
    10:42pm
    Your personal denigration aside.. most people had no superannuation until the 1980's. Government super was and is heavily subsidised and protected from such things as the GFC. Lucky you working in an industry that had super from 1948... many didn't.

    You have no idea what I've done in my lifetime and no idea if I am some 'leftie' or not, so kindly restrict yourself to the issues. Your personal experience with your super is not that of everyone, so it is you who are talking a load of c#&p.

    Now - how much do you think you should be entitled to put away at taxpayer's expense and then draw on without paying tax? Do you think you should get a 15% subsidy on part of your income to save indefinitely? That is the issue here - so try to get your mind around it. You cop taxpayer's money for super subsidies, and the question this government is addressing (not me for the last time) is how much is enough.

    If you think that the cutoff points for pension, around $50k single and $75k couple, are inadequate - what are your figures based on income derived from pension without tax?

    You paid subsidised money out of your earnings into super and then get the earnings from it for free... why should that go on indefinitely?

    I had no super in my industry and had my own, thank you for asking, and the same applies to many people.

    If you don't like the idea of paying tax on excessive super payments, then put it in the bank instead and pay the full load of taxes on money you've already paid tax to get hold of.

    And try to get a grip on the tax system as applied to pensioners..... when you work that out get back to me. Look it up on Centrelink and the ATO... that'll help you.

    Care to answer the questions with some facts and figures, or would you prefer to limit yourself to personal attack nonsense? You know it all - so give us your workings on it!
    TREBOR
    22nd Apr 2015
    10:55pm
    Come on, Cap - I'm waiting to hear you say your super was an in-house job and never drew any tax subsidies - so I can say to you:- "Why then are you entering this discussion? It is obvious that if your fund never used subsidies and was all fully taxed income put away, same as into a bank, you shouldn't be liable to 30% - but only 15% on excess earnings."

    Government - heavily subsidised.

    Defence - heavily subsidised

    Industry on an individual basis - you'll have to tell us.....
    Adrianus
    22nd Apr 2015
    3:12pm
    The reintroduction of a RBL (one RBL for all) on Super is a start. But how about 15%-20% GST. Have a catch all GST including a "Netflix GST", a "Google GST" and an "Amazon GST." A lowering of the top marginal income tax rate to bring it into line with the company rate of 30%. A rise in the tax free threshold to $30,000. We need to have some serious behavioural modification in order to increase productivity and create incentive.
    LiveItUp
    22nd Apr 2015
    3:29pm
    Pensioners would then have to be given all their pension on basic cards to stop them using the black market. A rise in the GST will only make the black market even bigger.
    Adrianus
    22nd Apr 2015
    3:48pm
    Given that Australia's GST is by far much less than other nations. Are you saying that Australia's black market is per capita smaller than most other countries with a consumption tax?
    LiveItUp
    22nd Apr 2015
    3:53pm
    All I know is that if I want someone around here to do a job for me then if I give them cash it gets done quickly but if I want paperwork for the job it takes ages to get it done and costs about 3 times as much.
    Adrianus
    22nd Apr 2015
    4:04pm
    I know what you mean. I had a tradie do a job recently, paid him the $1200 but when I tried to get a tax invoice you would have thought I was asking for a biblical miracle. He became quite abusive, so I did some checking and found that he was drawing unemployment benefits. His wife wasn't working and his 6 kids were all under 14. So the stakes were high.
    dougie
    22nd Apr 2015
    4:35pm
    Frank,
    When you checked and discovered this information did you advise Centrelink. If not my friend then I feel that you are as guilty as the tradie. Let not the pot call the kettle black.
    Adrianus
    22nd Apr 2015
    4:56pm
    No dougie, I didn't contact Centrelink, but I did notify the ATO and the Police because of his threats. Call me what you like but I think Centrelink is quite capable of doing their job. I am not black nor guilty. and I am certainly not your friend.
    dougie
    23rd Apr 2015
    7:11am
    Frank,
    I am happy if you feel that you have done the right thing, that is your choice. I do believe now you say that you contacted the ATO that this information will be shared with Centrelink. Incidently I did not mean to impugn your colour or race I just used an old adage. No slight to you was intended.

    22nd Apr 2015
    3:23pm
    I do not think $1.5 billion a year is such a big saving in the overall picture myself when the debt is so darn high and growing.
    Adrianus
    22nd Apr 2015
    3:52pm
    You're right Radish (F). At the end of Rudd's first term we had to borrow to pay the interest on our debt. By the time Rudd got back in we had to borrow 5 times the amount. We are facing a real problem if nothing is done to stop the rot.
    BazzB
    22nd Apr 2015
    4:53pm
    Current generous tax concessions favour those on higher incomes who can afford to take advantage of concessional tax treatments, but average wage earners and, especially low wager earners get little out of super tax concessions. So adding a 15% tax on earnings over $75,000 per year (suggesting a super balance of about $1.5 million) seems an improvement as the current system is now seriously skewed to high earners - with that much in the kitty, do you need an incentive that effectively comes from less well off taxpayers. So yes, this proposal plus the one on reducing the tax break on super contributions by lowering the High Income Superannuation Contribution threshold makes sense but it just trims the benefits making the system a bit fairer -it's hardly a major imposition. Also it is good to announce it well in advance so that voters can make their decision on this and other policies when the next election comes.
    niemakawa
    22nd Apr 2015
    7:05pm
    Bracket creep will ensure that even the low paid will eventually get their just rewards.
    Ripper
    22nd Apr 2015
    5:31pm
    " A Lesson from George Orwell
    "When the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed."
    An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class.
    That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.
    The professor then said, "OK, we will have an experiment in this class on Obama's plan". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all)
    After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy.
    As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.
    The second test average was a D! No one was happy.
    When the 3rd test rolled around, the average was an F.
    As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.
    To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed
    Remember,
    1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
    2. What one person receives without working for, another person must work for without receiving.
    3. The government cannot give to anybody anything that the government does not first take from somebody else.
    4. You cannot multiply wealth by dividing it!
    5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.
    Adrianus
    22nd Apr 2015
    5:54pm
    Ripper!
    LiveItUp
    22nd Apr 2015
    6:05pm
    Sadly I think by the increase in the welfare mentality of our nation and the loud cries of late to punish the rich it is the beginning of the end for Australia.
    CindyLou
    22nd Apr 2015
    7:52pm
    Excellent. Makes sense that effort and intelligence is rewarded.
    So many contributors moan and complain about elite workers in both private and govt jobs earning high pay. Well there is a reason for that, they are highly intelligent and capable in ways that most people couldn't fathom.
    niemakawa
    22nd Apr 2015
    8:30pm
    There are no poor people in Australia, those that claim to be so have only made bad choices of their own volition and then expect a bail out from those that are successful. No Tax on any Superannuation earnings is a better solution and would encourage others to make an effort in providing for themselves.
    Anonymous
    23rd Apr 2015
    7:39am
    Nice theories, Ripper, but when men are breaking their backs for miserable wages while fat cats are doing virtually nothing for obscene pay packers and those that are paid least are punished for saving while those who do least reap massive rewards, we are definitely near the beginning of the end for the nation. Tens of thousands get the idea that they shouldn't have to work because they've slogged their guts out for 40 years in an unfair system for stuff-all reward while the real ''leaners'' (who make self-righteous claims to have ''earned'' their ill-gotten gains) have exploited them, cheated them, and subjected them to gross injustice.

    Our problem in Australia starts at the top - with the greedy, self-serving bludgers who think they are better than the rest. I don't suggest you multiply wealthy by dividing it, but the majority of those ''receiving without work'' are not on welfare and are far from poor.

    It's time the privileged accepted that they have an obligation to pay fairly for the benefits they enjoy - benefits that they would NOT enjoy if there weren't a hard-working underclass who are being treated unfairly.

    Niemakawa, lots of Australians had no opportunity to provide for themselves. And the existing superannuation tax system actively discouraged low income earners from doing so while giving the well-off obscene benefits. You obviously don't understand the implications of abolishing tax on superannuation, or else you are among the greedy and self-serving privileged whose arrogance and ego is clouding their vision of reality. Why should a poor man pay more tax on super than on his wage earnings while a rich man pays 33% less tax on super earnings than on wage earnings? Abolishing tax on super will only increase the unfairness.
    mangomick
    22nd Apr 2015
    5:36pm
    For the 20 year olds who are starting to contribute to super today $75000 per year in earnings will probably come around by the time they are in their mid 50s,maybe sooner in years of double digit returns. So it wont just be the wealthier Australians but all Australians who will be hit . It won't encourage many young people to contribute anymore than they have to into their Super
    Anonymous
    23rd Apr 2015
    7:43am
    I'm sure the proposal includes indexation of the ceiling, mangomick. It would be absurd to consider any proposal that didn't.
    Adrianus
    23rd Apr 2015
    9:51am
    mango is correct, according to Chris Bowen's statement at the NPC yesterday it is not indexed.
    mangomick
    23rd Apr 2015
    6:46pm
    I missed Chris Bowen's statement but he and Labor are not going to appeal to many young blue collar industry and mine workers when someone points out to them that by their early fifties and possibly even mid 4os their super earnings are going to be hit with a 15% rip off. That on top of the loss of being able to salary sacrifice any more than $25 k a year. Can't see those blokes pushing rock bolts into the roof of long walls when they are in their late 60s and 70s.
    niemakawa
    22nd Apr 2015
    6:28pm
    Money makes the world go around, taxes do not.
    Nomad51
    22nd Apr 2015
    6:38pm
    As a positive, a policy has finally emerged from the Labor vacuum. Of course, it's the same old chestnut; let's penalize those that are trying to fund their retirement. God only knows how they'll waste the earnings of the taxed. They have a well proven track record; wasn't Swan a great Treasurer?????????? Who really wants more of that?
    niemakawa
    22nd Apr 2015
    6:47pm
    Well that is the ultimate aim of Labor. They want to make sure that their supporters( "Losers") will be well looked after at the expense of those that are willing to put in the effort to provide for themselves and save for a comfortable retirement. I believe that is what Labor would call a "Level playing field."
    Adrianus
    22nd Apr 2015
    8:23pm
    Today I watched Bowen talk at the Press Club and judging by the questions I don't think he was fooling anyone. Not even those from the ABC and Fairfax.
    Anonymous
    23rd Apr 2015
    7:48am
    So you guys would rather punish a battler for saving for retirement (taxing him 15c MORE on his superannuation earnings than he'd pay if he earned it outside super) while giving the rich a 33c in the dollar gift for every dollar they save. Good one! Let's have lots of incentives for the privileged and keep persecuting the people who do most to build this nation and keep it running.

    Actually, Nomad, it was Howard and Costello who created today's massive deficit. Study history. Their tax cuts are currently costing us about $40 billion a year - and 80% of the benefit went to high income earners. I dislike a lot of Labor policies, but given that the top earners gained most from tax changes in good times, surely it should be they, and not the battlers, who make sacrifices when times get tough?
    Adrianus
    23rd Apr 2015
    9:42am
    So the people who do most to build this nation are those earning less than $37k pa?
    Nobody likes the income tax on super Rainey. And I have no idea why Bob Hawke and Paul Keating introduced both the 15% income tax and the 15% contributions tax. To remove those 2 taxes would be harder than getting Moses to part the sea.
    Jacka
    22nd Apr 2015
    8:21pm
    people earning over $250,000 a year I agree should pay the extra tax however the $75,000 a year superannuation earning is not realistic people do not realize a couple wishing to live on $75,000 a year are not well off.A minimum of at least $100,000 should apply. Jack Kelly
    TREBOR
    23rd Apr 2015
    8:11am
    Fair enough - how much should the paid-for annuity called the Pension be then to get by?
    Jacka
    22nd Apr 2015
    8:55pm
    P.S. Jack again after reading a number of the comment people like trebor have no idea reality very sorry I fear your a capital D.H. sorry but true.Get a life . Stop answering everybody's comments. Bonnie pretty sensiblesensible. Cheers Jack.
    TREBOR
    23rd Apr 2015
    8:12am
    No good taking ill-aimed pot-shots at the messenger - try discussing the issues. It's not your fault that you can't live on less than $2k a week but every pensioner can. One of us has no idea.. it is not me.

    If you think I have no idea, wait until the government comes back with their solution.
    TREBOR
    23rd Apr 2015
    9:24am
    Plenty of stuff below for you to work with - ON the subject and not the man.... try it sometime...
    TREBOR
    23rd Apr 2015
    8:03am
    Let us try to clear this up a little.

    The issue under discussion here is the subsidised superannuation scheme - the 15% tax haven - in which some have salted away huge sums at this discounted rate, allowed it to prosper, and then draw a sum larger than (a specified sum) tax free.

    There are other ways of people accumulating super, and these are not the issue - some I would be wary of alerting the government to, since they might see another opportunity, say, where some specific industry in-house fund has not had tax paid by the recipient or the company.

    The question was, and remains..... how much is enough to allow a person to salt away at taxpayer-funded cost, as a tax haven of 15%, and then how much should that person be Entitled™ to draw tax free? Should this or should it not include goverment-sponsored superannuation for public servants, defence etc?

    Pretty simple, and too much confusion and side-tracking on this very simple issue.

    I've offered my views - which are non-partisan despite hysteria to the contrary - and stated that perhaps $50k drawings pa for a single and $75k for a couple is a reasonable figure. The Labor Party's figure is $75k PER PERSON - $150k per couple, or $3k a week which nearly brought the house down with whines. The response was that you can't get by on $1500 a week in a big city - yet pensioners get by on $450 (couple around $680 or so) or so, and have no right to earn extra money without penalty - a penalty not accorded to super recipients over (a specified amount).

    How then are these pensioners to ever accumulate any super?

    Some say that $75k means you need INCOME-GENERATING assets (not family home etc) of $750k and that will gain 10%. Now I don't know about you, but John Woods consistently says on TV that Harry Bloggovich, the security guy, or Sally Wright the office girl, might retire with $400k, which might generate $40k annually, so why is there massive argument over $75k when the vast majority will not even approach that figure?

    I've argued also that a Pension is a bought and paid for annuity - paid out of income tax and thus fully taxed in advance, as a levy to cater to 'social security' for nigh on perhaps 3/4 of a century.... or more...

    Someone (elsewhere) has suggested that perhaps everyone should be paid pension and super should be fully taxed as extra savings.

    Now - I sought to argue with figures some reasonable position that will permit a pretty fair go for those on EXCESSIVE superannuation under this 15% tax haven scheme - not as a partisan in any way, but on simple facts and figures - and in a climate when government of either/both LNP/Labor WILL suddenly find that this scheme no longer fits 'their' budgetary requirements.

    Now I'd like to hear this discussed without references to me as 'talking a load of c#@p' and 'being a 'leftie', and without all the distractions into areas not related to the 15% tax haven and no tax on income generated regime.

    I welcome discussion and ask for it - vitriol and personal insult is not discussion.
    TREBOR
    23rd Apr 2015
    8:19am
    Thank you, 'Jacka' - I obviously have no idea, yet it is you who have offered not one comment of substance, only airy-fairy commentary. Got some figures to show? ON the subject, not the person and not on everything under the sun. The issue here is the 15% tax haven for high earners and their then ability to allow that to prosper and then draw without limit and pay no tax.

    If that were any other business - do you seriously reckon the government would just nod and go away? Not for long - and it is coming with or without you.

    23rd Apr 2015
    8:42am
    I have just read the following which puts into perspective how " FEW"people are super rich !

    "Chris Bowen pushes his point by quoting from ASFA research, that found that 475 (yes a whopping 475 people out of 24 million people) with superannuation account balances exceeding $10 million received annual pension income of $1.5 million a year.

    From those 475 people, there are 84 people who are receiving annual pension payments averaging $3.26 million a year."

    A very negligible number in the overall scheme of things I would think!!
    TREBOR
    23rd Apr 2015
    9:06am
    Good point Radish - probably clear proof that the aim of this thing is the middle numbers - far more numerous....

    23rd Apr 2015
    9:31am
    This site is worth reading. It is from where I posted the previous figures.

    http://www.superguide.com.au/how-super-works/super-rich-is-smsf-bigger-rest
    TREBOR
    23rd Apr 2015
    11:46am
    This should get a few to bite:-

    ''The age pension currently costs $39 billion and superannuation tax concessions will cost the budget around $35 billion in 2013-14,'' the study found.

    It notes that the Commonwealth bill for these concessions is projected to rise at a staggering 12 per cent annually to be $50.7 billion in 2016-17.

    ''The overwhelming majority of this assistance flows to high-income earners,'' the report finds.

    ''Low-income earners receive virtually no benefit. The combined cost of these two policies will be $74 billion in 2014 alone.''

    To address the problem, the report's authors, David Ingles and Richard Denniss, have called for an end to the favourable taxation of superannuation and the introduction in its place of a ''universal age pension'', which would be non-means tested.

    Individual superannuation would then be used to top-up retirement incomes but its accumulation would not receive preferential tax treatment.

    Dr Denniss said the current arrangements were inconsistent, unfair, and ultimately unsustainable.

    http://www.smh.com.au/federal-politics/political-news/its-super-tax-concessions-not-pensions-that-are-killing-the-budget-20140421-zqx7p.html

    It is obvious that the cumulative drain on the revenue of the Budget since the inception of subsidised super is a massive figure in itself, and is set to overtake the entire cost of Pensions. A case of subsituting one drain or 'drag' on the economy for another.
    Kaye Fallick
    23rd Apr 2015
    11:51am
    Hi Trebor, these statistics are very important - and soundly based. So it is unsurprising most of our survey respondents want the super tax concessions urgently reviewed. cheers Kaye
    TREBOR
    23rd Apr 2015
    1:01pm
    *bows to Kaye*... but there's more....

    http://www.smh.com.au/federal-politics/political-news/its-super-tax-concessions-...

    Might help when you notice that tax concessions on super - NOT INCLUDING THE LACK OF TAX ON PAY DAY (I may be wrong there and the authors may have included that in their figures -they don't say so, so I do) - have now overtaken the cost of Pensions as the greatest 'drag' on the revenue side of budget... Pensions are an already paid for and paid up Right due to fully taxed levies included in income tax rate for over 3/4 of a century and thus, in reality, are no 'drag' on the economy at all, just a mis-managed portfolio of government.

    Superannuation is subsidised at 15% tax for under $300k pa, and 30% on 3000k+ - still a damned good deal when the marginal top rate is much higher.

    It is then allowed to prosper without paying tax, even in some (all?) cases with dividend imputation from investments (another bite out of the tax cherry), and then the recipient is allowed to take the annual earnings from it after retirement tax free in entirety.

    How now does the idea of never-ending tax concession for superannuation sound? The actual contribution to subsidised taxation's creation of Budgetary Black Holes, with all these factors included, is massively higher than Pensions for all equally, and the best solution is a Pension for all, and then pay tax on super as savings.
    TREBOR
    23rd Apr 2015
    1:05pm
    One thing I admire about you, Kaye - is you willingness to chop away at your own super situation for a principle. Surely changes will affect you and quite seriously.
    TREBOR
    23rd Apr 2015
    1:07pm
    Oh - sorry - that's $300k+ - not $3000k+.

    My work here is done.... work for which I receive nothing but scorn from some.
    Adrianus
    23rd Apr 2015
    12:23pm
    Please excuse my lack of understanding. Many posters here continue to argue that Superannuation penalises the low income earner and advantages the high income earner.
    If you earn $34,488 or less from personal exertion (for the 2014/2015 year), the federal government pays $0.50 (50 cents) for every dollar you contribute to your super fund in after-tax dollars, up to a maximum of $500 a year.
    So if you contribute $1,000 the federal Gov. co-contributes $500, now that's a 50% return from day 1. On top of this your boss contributes another 9.5% or $3,276 based on a salary of $34,488. The $3,276 attracts a contribution tax of (15%) $491). Therefor, your $1,000 contribution grows to a massive $4,284. After that it's a level playing field.
    A so called self employed "fat cat rich person" earning $180,000 pa has to contribute $5,040 pre tax earnings in order to achieve the same day 1 balance. If, on the other hand he didn't make that $5,040 contribution he would be left with $2,772 after tax in his pocket.
    The way I see it the high income earner sacrifices $2,772 to get the same result as the low income earner sacrificing $1,234.
    Can someone explain how the low income earner is disadvantaged?
    Anonymous
    23rd Apr 2015
    1:29pm
    Firstly, Frank, the LNP proposed an end to the Goverment co-contribution for low income earners.
    Yes, your boss contributes to super - that applies whatever your wage. But here's where the unfairness comes in. Once funds are locked away in super, they are taxed at a concessional rate. If you happen be lucky and earn $180,000 a year or more, you enjoy a concession of 33c in every dollar. You pay only 15c tax on your superannuation fund earnings, whereas if you earned that money outside super, you would pay up to 48c in the dollar.
    Conversely, if you are an average income earner paying the 33c tax rate on your wage, you enjoy only an 18c in the dollar benefit for earning money in superannuation.
    Now, if you happen to be disadvantaged and earning less than $19000 per annum, your marginal tax rate on earnings is $0, but you are punished for earning money in superannuation by having your superannuation earnings taxed at 15c in the dollar.
    The $19000 a year earner will most likely get a full government pension in retirement, costing, over 20 years, around $420,000 (excluding allowance for cost of living increases).
    Meanwhile, the $200,000 a year earner has enjoyed a contribution of $19000 to his super fund annually from his employer. If his fund earned 7.5% per annum, over 20 years he would earn $523,498 and he would enjoy a tax concession of $172,754 (again excluding provision for cost of living increases and legislative changes).
    Even if the Government co-contributed $500 a year to the poor man's fund for 40 years of working life, he's still receive more than a quarter of a million less from the taxpayer than his rich counterpart, and that's not even starting to count the benefits the rich man enjoys after he retires.
    So, the poor man receives a taxpayer funded pension of $420,000 over 20 years in retirement, while the rich man has enjoyed a taxpayer-funded gift fof $172,754 BEFORE he retires, and continues to enjoy further massive concessions after retirement.
    Do you get it now, Frank?
    Of course we want to retain incentives in the system and encourage people to work hard and save. But the system is obscenely generous to the wealthy and way too harsh on the poor.
    How is it fair to reward a rich man for saving for retirement by gifting him 33c for every dollar his superfund earns, and to punish the poor man by taxing him 15% higher on his superfund earnings than on his earned wages?
    Anonymous
    23rd Apr 2015
    1:38pm
    BTW. My simplistic figures also exclude compounding returns. I'm not an actuarian, but I know that experts have estimated that it costs the taxpayer up to twice as much to fund the retirement of the so-called ''self-funded'' retiree who was earning $200,000 as it does to support a full pensioner over 20 years in retirement.
    Adrianus
    23rd Apr 2015
    2:36pm
    I think I get what your gripe is? You're saying that what Hawke and Keating saw as being fair in 1988 by having Super funds pay 15% income tax, regardless of various members personal circumstances, is now unfair. Because of members personal marginal rates. If that is the basis of your fairness test then it would have been most unfair when marginal rates of tax were much higher back in 1988. But I guess the money was coming from businesses and it's only fair that the ATO gets a share, right? So as marginal tax rates drop the more fairer super becomes? That is a good case for dropping Personal tax rates. I would like to see the top rate at 30% same as the company rate.
    So you continue to argue that Super tax is unfair because a worker who works 21 ($19k at min hourly rate) hours per week doesn't get as much as a worker who works 60 hours per week, but at the same time your previous post says they are "the people who do most to build this nation." I don't doubt that they make a nation building contribution, but certainly not in monetary terms.
    BTW, in your costings you have left out the enormous amount of welfare benefits a minimum wage earner would have received over 40 years. Shouldn't you include that if you are talking about cost to the taxpayer? Oh that's right, the 21hr per week worker pays no income tax? How much income tax does the "rich" guy pay who is working his butt off 60 hours per week? Oh, $54,547. and you're complaining that he is getting a concessional tax rate on his retirement savings???
    Just humour me momentarily and subtract the $54,547 pa for the 40 years and lets see how much this self funded, previously hard working, retiree is costing his country?
    LiveItUp
    23rd Apr 2015
    3:14pm
    The retiree is costing the government nothing for his retirement. If there was no incentive for him to put it into super then he would have spent the money instead and got the full age pension.
    Adrianus
    23rd Apr 2015
    3:24pm
    Absolutely Bonny!
    There should always be a stick and a carrot when it comes to behavioural modification.
    There seems to be a few people who think getting to retirement is like a handicap race such as the Stawell Gift.
    I am not a human behavioural scientist but I have noticed some with ODD symptoms. Oppositional Defiant Disorder.
    TREBOR
    23rd Apr 2015
    4:57pm
    Yes - they got that Welfare In Advance of retirement rather than Social Security after it.

    23rd Apr 2015
    1:40pm
    The Labor party proposal shows some admirable intent, and is a million times better than Hockey's ''we won't make changes'', but it falls seriously short of the goal. The Greens have put forward a much fairer policy that would result in better savings for the Government while not removing incentives to save for retirement.
    LiveItUp
    23rd Apr 2015
    3:06pm
    I agree with Hockey leave our super alone.
    Adrianus
    23rd Apr 2015
    4:19pm
    Rainey, I fail to see how the Greens suggestion of a progressive contribution tax is a policy let alone "a much fairer policy." Once again not given enough thought. If I was a high income earner there is no way I would contribute to Super if I could pay the same amount of tax (30%) and have more control over my investments. If low income earners don't want to pay the 15% contributions tax then they don't pay it. I just don't get what the real problem is?
    Denzel
    23rd Apr 2015
    3:06pm
    RORT !!!

    A legitimate savings scheme to wean the population of the public purse is a RORT ???

    Pathetic !!!
    geomac
    23rd Apr 2015
    5:21pm
    Just about everything Howard and Costello did in office regarding the better off was a rort. Trouble is the pigeons have come home to roost.
    Reeper
    23rd Apr 2015
    6:09pm
    This when fully explained is all smoke and mirrors and would gain nobody anything. It was hilarious watching Bill Shorten announcing the plan because all he did was refer everything to another Minister....he didn't have a clue what the policy meant or what it would achieve....NOTHING Bill, NOTHING!
    Denzel
    23rd Apr 2015
    7:01pm
    Bill is a big picture guy.
    Leaves the details to his minions
    Anonymous
    23rd Apr 2015
    7:05pm
    Reeper - today treasury officials said it would difficult if not impossible to implement and there was debate in the papers today as to whether the cost to implement would outweigh the savings - super funds said it would be hard to report. Also not widely reported was that labor would take away the 10% offset for defined benefits schemes (such as CSS and DFRDB etc) and would include politicians - however politicians did not contribute whereas CSS and DRRDB contributed 5.5% of salary and up to 1972 money was set aside to pay retirements - however Whitlam took it all and put into consolidated revenue.
    This policy will never be implemented and sadly for labor it is back to 50s to 70s type policy based on a perceived class warfare mentality - a leading commentor said it would have some traction among some voters but not enough - we are already seeing major issue with Andrews govn in Victoria and in QLD while the labor lady is not doing much wrong she is suffering from a minority govn (as all have in the past) - as political journalists turn to Shorten and alternative policies it will become obvious how devoid they are and why they are unelectable - 2 years ago labor/greens said boats could not be stopped and they have and today Hunt showed direct action can work and cheaper which will send greens apolectic.
    Gee Whiz
    24th Apr 2015
    10:58am
    Since when is earning $75000 a year regarded as excessive salary or wages.

    The Labor party is on the "wacky backy" once again and shows just how far out of touch they are with reality.

    I think its time for all politicians superannuation to be transferred to public sector super funds and suffer the same political interference as the rest of us.

    If Shorten keeps up with this sort of nonsense he will be in opposition for a long time.
    geomac
    24th Apr 2015
    11:56am
    You seem confused as to what the $75,000 figure is for. For starters it is not salary or wages but super and tax would not apply until after the 75 grand. Try reading the thread again.
    In a policy claimed to save $14 billion over 10 years, tax concessions on super would be reduced to a tax-free threshold on earnings of $75,000 in a single year. Above this amount, a 15 per cent tax rate would be applied.
    Adrianus
    24th Apr 2015
    12:52pm
    Why does the left always try to construct a glass ceiling? If a member had $5m in his account and had a 1% return totalling $50,000 then no income tax would apply. It's just not workable and in these times possibly would cost more to administer. That's why the tax revenue is pushed out to 10 years.
    Peterrj
    25th Apr 2015
    7:56am
    The proposal sounds fair .... Superannuation is tax free money .. Right .. So why should it be taxed when you draw your pension out of your Superannuation savings? It's so easy to forget that the Superannuation 'nest egg' consists of contributions that we taxed at either your marginal tax rate or 'pre taxed' money that was taxed at 15%. Plus earnings of the fund in the accumulation phase was also taxed at 15%. And in death those earnings (Tax Compoent) are also taxed at 15% for beneficiaries who are not your dependants. And Superannuation money is Tax Free???? Every Budget 'they' change the Superannuation rules ..... How lucky do you feel that your Superannuation money will be any where near as attractive as when you saved this nest egg? Just watch ... Superannuation will be the lemon of the future.
    Peterrj
    25th Apr 2015
    8:04am
    Sorry for the repeated comments, I am in my 5 day of a blackout and the Internet works slowly with a dodgy hot spot on a failing mobile.
    Peterrj
    25th Apr 2015
    7:56am
    The proposal sounds fair .... Superannuation is tax free money .. Right .. So why should it be taxed when you draw your pension out of your Superannuation savings? It's so easy to forget that the Superannuation 'nest egg' consists of contributions that we taxed at either your marginal tax rate or 'pre taxed' money that was taxed at 15%. Plus earnings of the fund in the accumulation phase was also taxed at 15%. And in death those earnings (Tax Compoent) are also taxed at 15% for beneficiaries who are not your dependants. And Superannuation money is Tax Free???? Every Budget 'they' change the Superannuation rules ..... How lucky do you feel that your Superannuation money will be any where near as attractive as when you saved this nest egg? Just watch ... Superannuation will be the lemon of the future.
    Peterrj
    25th Apr 2015
    7:56am
    The proposal sounds fair .... Superannuation is tax free money .. Right .. So why should it be taxed when you draw your pension out of your Superannuation savings? It's so easy to forget that the Superannuation 'nest egg' consists of contributions that we taxed at either your marginal tax rate or 'pre taxed' money that was taxed at 15%. Plus earnings of the fund in the accumulation phase was also taxed at 15%. And in death those earnings (Tax Compoent) are also taxed at 15% for beneficiaries who are not your dependants. And Superannuation money is Tax Free???? Every Budget 'they' change the Superannuation rules ..... How lucky do you feel that your Superannuation money will be any where near as attractive as when you saved this nest egg? Just watch ... Superannuation will be the lemon of the future.
    Peterrj
    25th Apr 2015
    7:56am
    The proposal sounds fair .... Superannuation is tax free money .. Right .. So why should it be taxed when you draw your pension out of your Superannuation savings? It's so easy to forget that the Superannuation 'nest egg' consists of contributions that we taxed at either your marginal tax rate or 'pre taxed' money that was taxed at 15%. Plus earnings of the fund in the accumulation phase was also taxed at 15%. And in death those earnings (Tax Compoent) are also taxed at 15% for beneficiaries who are not your dependants. And Superannuation money is Tax Free???? Every Budget 'they' change the Superannuation rules ..... How lucky do you feel that your Superannuation money will be any where near as attractive as when you saved this nest egg? Just watch ... Superannuation will be the lemon of the future.
    MacI
    28th Apr 2015
    5:14pm
    On the face of it taxing at a rate of 15% on earnings above $75,000 per annum seems reasonable. Labor claim that this would only affect those with $1.5M or more in Super. As usual for politicians they only us tell half-truths. I had a look at the investment returns for my super fund in pension phase over the past 11 years. In 8 of 11 years the required balance to generate earnings greater than $75,000 was well short of $1.5M. In fact in 8 of 11 years the balance required to generate earnings of $75,000 was between $516K and $655K. This was with a 50/50 growth/defensive investment mix. If invested in a more aggressive 70/30 mix (the funds Balanced investment mix) a balance of $421K would have generated earnings of $75,000 in one particular year.

    This is the kind of spin that drives me to despair with politicians of all persuasions - half-truths and deliberate deception. What compounds this is that more often than not journalists and other commentators seem to report the spin without any analysis.
    Adrianus
    28th Apr 2015
    5:44pm
    Simple stupidity I think mixed with half truths. Good post KCI.
    mangomick
    28th Apr 2015
    5:50pm
    Lets see how you go in the next 5 years when most financial experts aren't expecting investment returns to be over 5% per annum. I wonder what your returns would have been if FED and ECB hadn't gone on a printing spree. Pigeons are soon coming home to roost and Super funds and Bond markets are going to get a little bit frightening.
    Australian markets are still not back to where they were before the GFC and many australians lost 30% of their super capital.
    mangomick
    28th Apr 2015
    9:18pm
    As Howard marks founder of Oaktree Capital was quoted in Motley Fool today, "Starting from May 2005, there have been only 3 negative years — but the added losses were more then enough to offset the enhanced gains made in the good years. And it really only takes one very bad year to undo many years of solid outperformance.
    Adrianus
    29th Apr 2015
    7:51am
    Very true mango. If a member balance was say $500k, the market comes off 20% he then has a balance of $400k. The only good news is he has paid no tax. The following year the market recovers a little, say a 19% increase his balance would be $476k and further eroded by 15% tax reducing his balance by $11,400 to $464,600.This member is getting hit hard by the Labor policy while he is trying to climb out of a hole.
    This kind of reminds me of the flood tax introduced on flood victims.
    mangomick
    29th Apr 2015
    8:06am
    Ms Gillard caused a lot of collateral damage to all Charities with that Gem. I had just donated $500 to the flood appeal when she announced she was then going to also levy me a Flood tax. Now no more donations,I leave all funding for disasters and charities to Government. Plus I saw many rorts where many people got out of the tax surcharge and also got a money handout when they weren't entitled it.Another Labor plan probably well meant but very poorly executed.
    Adrianus
    29th Apr 2015
    10:20am
    Another plan well meant but badly executed? By that time Labor was well down the road of their master goal which was to leave the bank vault full of IOU's only. They were in trouble because Swan kept promising a budget surplus.
    I stopped donating for the same reason, that and the waste, while at the same time taxes were increasing.
    In QLD, where they grow the best mangoes, Anna Bligh's husband headed up a new department with 54 public servants whose job it was to measure the changes in climate change.
    Back to the super tax. The people who construct these tax policies are paid more than the Prime Minister, are extremely intelligent, (I had dinner with one and could not understand what he was talking about when he got deep into budget matters) and may very well produce something of value. However, I feel that politicians cherry pick based on political fall out. So we could be paying a PS in Treasury $1m pa and not fully utilising his education, skills and experience.
    mangomick
    29th Apr 2015
    10:50am
    Seeing that the execution was very poor I guess calling it a "plan" would be an oxymoron.....A far as very educated public servants are concerned, history has sometimes shown that occasionally we need to be more careful with educated idiots than uneducated idiots .A career public servant on $1m pa would know very little of having to survive on a pension I would imagine.