Three alternatives to Labor’s unpopular ‘retiree tax’

Rice Warner suggests three alternatives to Labor’s franking credits policy.

Three alternatives to Labor’s unpopular ‘retiree tax’

The debate over Labor’s franking credits policy continues. Facets of the plan are proving unpopular to many retirees, but financial services consultancy firm Rice Warner believes it has an alternative that could work for everyone.

In a submission to a parliamentary inquiry examining Labor's policy, the firm suggested three plans for collecting tax from those with large imputation credit refunds, including a $3.2 million limit on how much money can be put into super.

Under this proposal, only people with very large balances accumulated prior to the Coalition’s $1.6 total superannuation balance cap would be affected.

Under the Coalition’s laws, amounts over $1.6 million were transferred out of tax-free pension accounts into accumulation accounts, which are taxed at 15 per cent compared with the top marginal rate of 45 per cent.

Rice Warner’s plan is for super savers to transfer "excessive" amounts of money out of super when they reached a certain age, say 65, which would effectively limit those trying to use super as a wealth accumulation mechanism.

"We suggest a threshold of (say) $3.2 million for all accumulation and pension accounts combined. Amounts above this would be transferred tax-free out of the low-tax superannuation environment," reads the submission.

Rice Warner also suggested taxing all earnings on super at 12 per cent – including money in pension accounts which are tax free at present. It also wants to cap franking credit refunds at $5000 per taxpayer.

A refund cap could effectively limit the damage to lower-income retirees’ income.

All three options are viable and should be considered, says Australian Shareholders Association policy manager Fiona Balzer, as Labor's policy only seems concerned with increasing revenue. Some critics of the proposed law feel it unfairly targets self-funded retires.

"If the view is that some taxpayers shouldn't be in the zero-tax bracket, with SMSFs in pension phase a particular target, the policy response should be to propose a change to their tax rate, being explicit about who is being taxed and why," said Ms Balzer.

"What is currently proposed would see people of similar means being treated differently, which breaches principles of fairness."

The changes would only be considered if Labor took government and implemented the proposal.

Read more at AFR

What do you think of these suggestions?

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login

    4th Mar 2019
    9:48am
    Yep - far better than the stupid labor policy as it stands now but then labor pollies aren’t very bright when it comes to finance, economics and tax
    Karl Marx
    4th Mar 2019
    11:39am
    And I must add neither is the LNP, bunch of dimwitted hombres.
    Old Geezer
    4th Mar 2019
    11:46am
    Current proposed policy is good as it can be side stepped.
    Pentop
    4th Mar 2019
    12:13pm
    Really... better... I dont think so... so all people with monies in superannuation regardless of the balance will pay 12% on their super earnings... why to fund those people with over 1.6 million in superannuation. Again the people that can least afford it will be subsidising those that have plenty!!! Wonderful plan... no wonder the big end of town love it.
    Old Geezer
    4th Mar 2019
    12:26pm
    Get rid of that no tax after 60 on personal super and then super funds can remain untaxed.
    TREBOR
    4th Mar 2019
    1:21pm
    I'll go with Lothario II here - both parties are as described in my eyes.
    TREBOR
    4th Mar 2019
    10:20am
    "a $3.2 million limit on how much money can be put into super."

    The Trebor Scheme upper limit - or one proposed - some think along the same lines.

    " cap franking credit refunds at $5000 per taxpayer."
    $5000 would not be enough for someone whose return from shares is marginal... each case within, say, the lowest tax point of $38,000 (or so as amended) should be looked at, and should be viewed in relation to it being a single or a couple.
    TREBOR
    4th Mar 2019
    10:23am
    make that 'return from shares and total income' - to cover those who have several strands of income.

    Perhaps the lower limit should be the equivalent of two single pensions, and an income 'buffer zone' above that, and anyone falling into that area should be fully reviewed. Or perhaps the level at which you would begin to pay tax at 30% on gross income (including dividend imputation as required by law). I've worked that one out for you before...

    As for the rich, well..... (wait for it... wait for it).... it's not as if they're doing a wonderful job with their excess cash, is it?
    TREBOR
    4th Mar 2019
    10:27am
    I was considering OGR, who has said times many that (their) gross income is slightly below pension - that sounds like DI is a serious issue for one on such a low level of return from dividends, and the question to my mind is - whether to top up via social security such persons, or allow them some or all DI return. One or the other, it still comes out of consolidated revenue at the end of the day - but somehow we need to develop genuine equity, by chopping over-fat at the top and improving the lot of those at the bottom.....

    This is about a fair retirement - not a fair amount of millions in retirement...
    Anonymous
    8th Mar 2019
    7:50am
    Not for Labor, Trebor. For them, it's about fair millions for the rich and neither comfort nor hope for the poor. They hate battlers who actually had a go and rose above the station they were born to. It's not on in a communist society. We have rich and poor, and never the twain shall meet.

    Blue chip shares have traditionally been one of the very few accessible, relatively safe investment opportunities for those with limited capacity to invest. Their returns were enough to give the less advantaged genuine opportunity and hope. Labor plans to ensure they, like other investment opportunities, become the exclusive province of the privileged. Keep the battlers down - where they belong and can be controlled. Labor's policy is not about economics. It's about control. People who battle their way up to self-sufficiency are a threat to those who seek to exercise excessive control and achieve ends the populace don't want. Suppression is required to perpetrate evil.
    Travellersjoy
    4th Mar 2019
    10:35am
    All strategies that reduce the capacity of high income earners to use superannuation as a wealth accumulation vehicle should be considered to ensure those people pay their proper tax liability on income and assets.

    Superannuation was intended to enable low and middle income people to save for their old age by making it compulsory, and an alternative to wages in the hand which were not being saved. Too many with short term interest and poor planning.

    John Howard and Peter Costello turned superannuation into a slush fund and tax avoidance mechanism for high income earners, and we now see the result.
    Retirement policy is now largely driven by the need to satisfy the finance sector who leech off the high income earners with superannuation slush funds (and, of course, the clients, to the detriment of the ordinary Australians whom superannuation was intended.

    Most of those people wouldn't vote Labor in a pink fit, but I would never-the-less like Labor to ensure that the legislation they pass is the best fit possible for ordinary superannuants, as well as the public purse.
    Anonymous
    8th Mar 2019
    7:54am
    But Travellersjoy, the people Labor is hurting are NOT HIGH INCOME EARNERS. The high income earners are keeping their benefit. Labor is attacking LOW AND MIDDLE INCOME EARNERS.

    And no, superannuation was not intended to enable low and middle income people to save for old age. If it were, the tax rebate wouldn't give high income earners a 30%+ benefit and low income earners nothing, or actually tax them MORE on their super contributions and income.

    The whole game is about feeding the rich. And Labor is ensuring the rich continue to party and the lower and middle class are further deprived.

    Labor has no interest in the public purse either. If it did, it wouldn't be openly telling people how to dodge contributing more. This is political, not economic.
    pedro the swift
    4th Mar 2019
    11:40am
    Why tax all pension funds at any level. Surely those who are living off their super pension shouldn't have to pay any more tax again! Will those who have to pay this tax be able to claim costs against it as most companies do now and get away with paying minimum tax?
    I don't have a great problem with people putting whatever they can into super. They earned the money(in whatever way). If I could put millions into my super I would love to do it.
    The whole issue is one of the gov. seeing money that they want to get their hands onto. They would be better curbing their stupid spending then maybe we would have a chance of having a decent economy. And who the hell is this Rice Warner mob anyway. Who funds them , I wonder? Another politically biased think tank no doubt!
    TREBOR
    4th Mar 2019
    1:07pm
    Hence The Trebor Plan, Pedro - you get the pension and than you can afford to pay that tax. As usual, unlike my good self and a few others (**preens**) this educated group has developed a half-baked solution, that continues to impact on those with least.

    Can't go half-way across a yawning chasm and call it quits and set up camp right there.... and a yawning chasm is what superannuation/retirement packaging has become....

    Needs to be brought under proper control immediately - no more half-baked measures.
    Rae
    5th Mar 2019
    7:35am
    Yes TREBOR there needs to be some sort of equity returned so all are treated the same way.

    Regardless of any changes including franking credit tax it never effects the very wealthy ever.

    All these changes seem to be geared at the middle to make them pay up.
    Old Geezer
    4th Mar 2019
    11:40am
    Get rid of the no tax payable on super pensions after 60 as this is a rich man's loop hole.
    GeorgeM
    4th Mar 2019
    12:18pm
    Rubbish idea, as Super is meant as a Saving tool encouraged by all Govts, and is a good tool for that purpose. A cap on it is far more sensible - say $1 Million. Your idea is solely based on your lack of sensible investment in Super. Self-centred as always!
    Old Geezer
    4th Mar 2019
    12:18pm
    No the no tax after 60 has no affect on those with modest super balances as they can offset 15% tax already paid. It is those with big super balances that benefit in by this unfair policy.
    GeorgeM
    4th Mar 2019
    12:22pm
    Hence a cap on it (say $ 1 Million in Super with no tax) is far more sensible, with all investments above that taxed on marginal rates - to continue Super being a sensible saving tool for all people.
    Old Geezer
    4th Mar 2019
    12:25pm
    No tax after 60 on super only benefits those with big super balances. People with smaller super balances get a 15% rebate for the tax they have already paid which is more than enough to pay any tax owing.
    TREBOR
    4th Mar 2019
    1:11pm
    Yes, George - with a reasonable cap..... up to $3.2m sounds good invested in a fund, but I haven't done the figures... like to see their workings and go through it myself.

    $3.2 is surely enough to salt away for anyone, and would return, at 8%, $256,000... not bad biccies for anyone really, except the very greedy who've grown used to their luxurious taxpayer-funded lifestyle.

    If you can't live on a quarter mill tax free, when you cannot owe anything if you had the wherewithal to salt that away - you're just plain greedy.

    Pay your taxes you loafing dole bludgers.
    TREBOR
    4th Mar 2019
    1:16pm
    Well, all right - 12% tax on $256,000 =$30,700 tax.

    256,000 - 30,700 = $225,300...

    My heart truly bleeds for those forced to live on that pitiful amount while firmly ensconced in their already luxury lifestyle....

    Pay your taxes you loafing dole bludgers.. no more lolly-gagging in the warm sun trying to get a suntan....
    Old Geezer
    4th Mar 2019
    3:49pm
    Trebor but they have $35,700 in franking credits so are $5000 better off.
    TREBOR
    4th Mar 2019
    4:23pm
    Not when the Trebor Government abolishes franked credits...

    Vote 1 - Trebor Party - We ARE The People!

    (the above public comment brought to you by The Trebor Party Inc - a Party of one... jus' business.. honest olive oil importer...)
    Rae
    5th Mar 2019
    7:37am
    The AFR printed the effect of Labor's franking credit tax and it doesn't effect the wealthy at all.
    Old Geezer
    4th Mar 2019
    11:45am
    Let Shorten keep his unfair policy as he won't get a cent from it when all those who get refunds invest elsewhere so the only people with franking credits are those who use them to pay less tax. Then self funded retirees wont have enough to live on so they will be on the old age pension costing him money instead of raising revenue.

    So now it $40 billion in franking credits give back to the wealth as tax offsets and nil from the low income earners as they wont have any excess franking credits.
    Rae
    5th Mar 2019
    7:39am
    It is going to be harder to generate income and most won't manage it without a lot of risk.

    It will force the selling down of assets as designed.

    All savers into Superannuation have been well and truly scammed since Keating started this rot.
    Old Geezer
    4th Mar 2019
    11:50am
    If you have to pay 12% on super in the pension phase and a cap of only $5000 on franking credit refunds why have super as for most people it will cost more to have super than not have super?
    Old Geezer
    4th Mar 2019
    11:54am
    Banking will now cost everyone more under Labor too. Labor wants to impose a tax on banking to pay for domestic violence.

    We simply can't afford a Labor government.
    Karl Marx
    4th Mar 2019
    12:01pm
    We definitely can't afford to keep the LNP in power. They have shown to spend so much more & are so untrustworthy over the last 6 years, just look at all the rats jumping ship
    Old Geezer
    4th Mar 2019
    12:19pm
    Ha ha atleast they wont be taxing us so much we can't turn around.
    Rae
    4th Mar 2019
    1:05pm
    Why does Labor blame the banks for domestic violence? Wouldn't it be better to fine the abusers to pay the victims?
    Old Geezer
    4th Mar 2019
    1:19pm
    Labor just wants to grab tax where ever it thinks it can without regard to who it will affect.
    TREBOR
    4th Mar 2019
    1:30pm
    Wouldn't it be far better to resolve the very real problems with the current handling of relationship issues?
    Old Geezer
    4th Mar 2019
    1:31pm
    Trebor that's not the Labor way of doing things.
    TREBOR
    4th Mar 2019
    4:26pm
    I know OG - was just discussing sledgehammers on another forum over tax free millionaires ... Labor loves the sledgehammer approach to kill a gnat, and the shotgun approach to any social issue.... kill 'em all - let god sort 'em out... just eggs broken in making a superb omelette... (BS > BS > BS).... all grist for the mill for the Great Socialist Revolution.. sorry 'bout the casualties ....
    Old Geezer
    4th Mar 2019
    4:28pm
    Trebor the rich have choices and they didn't get rich by not using those choices.
    TREBOR
    4th Mar 2019
    4:30pm
    .. the shattered homes, the destroyed dreams, the men under the bridges, the runaway benefits for those 'in the know and at the top' who wield absolute power over all they survey, the lost children with no soul, the growing unbalance in incomes to suit preferred groups, the looming catastrophe in retirement packaging......

    Wherever evil grows, there you will find Trebor, standing tall and in opposition... a man without fear or favour (but actually very shy by nature) and filled with the light of humanity and kindness to all but the grossest evil-doers...

    **aw, shucks**
    TREBOR
    4th Mar 2019
    4:31pm
    No equal opportunity then, OG? Thought not..... I expect better for my grandchildren than to stand behind leeches and liars and cheats.....
    Rae
    5th Mar 2019
    7:43am
    Very little is equal anymore TREBOR. It's see your savings and see how to get at them by Government of both sides. They stuffed up with all that Nazi Privatisation policy and now have no revenue to play with so are coming after retirees pots of saving as it's easy grifting.
    GeorgeM
    4th Mar 2019
    12:16pm
    Some sensible suggestions from Rice Warner, although some tweaks are needed, e.g.
    a. No tax on Pension account (up to $1.6 Million) must continue - this has been an incentive to Save and must not be deleted. Maybe reduce that to $1 Million (the Tag Team Labor might just do that!).
    b. Tax all other Super income above that on normal Marginal rates - ($3.2 Million limit is too high, the taxpayer doesn't need to subsidise to that level).
    c. Franking Credits Cap is absolutely the better option than Labor's STUPID policy which protects the rich, although the Cap could be slightly higher (say $10K) to help the less well-off SFRs.

    Another serious option (not mentioned here), which Labor (if they want to support real Labour) must consider for the sake of fairness, is to impose Minimum Taxes on all Large Companies and the Rich, with only very Limited Deductions for local, reasonable costs only, to stop the massive tax rorts leading to Nil or Negligible taxes being paid currently. That should rake in Billions of currently foregone taxes, and indeed make Universal Age Pension funding a cakewalk!
    Old Geezer
    4th Mar 2019
    12:21pm
    Only those with big super balances benefit from the no tax after 60 as those with lower super balances get a 15% tax credit that is more than enough to pay their tax owing. Those with higher super balances benefit from it as they pay more than 15% in tax.
    Sundays
    4th Mar 2019
    1:19pm
    I agree GeorgeM, good points but I would leave the $1.6M cap.

    OG super in pension mode is tax free at present and should remain so (with a cap) as tax has already been paid going into the fund, and while in the fund. There has to be some incentive to wholly, or partly self fund retirement via super
    Old Geezer
    4th Mar 2019
    1:28pm
    Sundays you obviously don't understand the tax free income from pension after 60. There is a 15% tax rebate on your income from super which most people wouldn't have enough income to use. So nothing changes for them.

    The tax free income from pension after 60 only helps those with big super balances and income outside super as they wold pay more tax without it.

    If you have millions in super I can understand your concerns.
    Sundays
    4th Mar 2019
    4:04pm
    OG, I fully understand that if you make any withdrawal from a taxed super fund aged 60 or more, it is tax free. That’s a tax free lump sum, or a tax free allocated pension. It does not appear on your tax return. It does not matter whether you have a small or balance up to $1.6m. I think it is you who is confused as to the current rules which have been in place since 2007
    Old Geezer
    4th Mar 2019
    4:16pm
    No I'm certainly not confused at all. I know how it all works and I was better off with my super pension taxed than I was after it came in. I could use the excess 15% tax paid to pay no tax at all. Now I have to pay tax on my earnings outside super.
    Sundays
    4th Mar 2019
    5:54pm
    And so you should!
    Old Geezer
    4th Mar 2019
    6:13pm
    Why should I pay more tax than I should?
    TREBOR
    4th Mar 2019
    7:08pm
    .. because you're not doing much of a job with it?
    Old Geezer
    4th Mar 2019
    12:23pm
    If Labor just wants revenue then give only 90% of franking credits back to everyone. No one invested in franked shares can dodge it.
    Old Geezer
    4th Mar 2019
    12:30pm
    Just in case people haven't realised it those of us who know how this policy will work have already worked out how to avoid it. We are also making money out of all the share buybacks and special dividends which are currently on offer.
    TREBOR
    4th Mar 2019
    1:21pm
    ...and simply abolish frankinng credits - is no franking, is no problem... and even less endless argument over what should be nothing.

    I'll say it again - company tax is paid by the individual called the company and is highly preferential at 30% of net income (which few companies pay anyway, and an individual would be paying top marginal rate at that level of income) ..... personal income tax is paid by the individual shareholder on earnings received including franking @ 30% where applicable (dependent on overall income, of course).... the two are not the same, and there never was any 'double taxation' involved in companies paying their taxes (when they do occasionally).

    Some argue that shareholders somehow are the company - not so - they are investors in it and the company itself is a totally separate operating entity from shareholders.
    Old Geezer
    4th Mar 2019
    1:24pm
    So we will have uncapitalized companies with big debt burdens that pay interest instead of tax as there is no incentive for people to invest in them as shareholders.
    TREBOR
    4th Mar 2019
    1:31pm
    Nonsense full dividend = franked dividend plus 30% taken in advance.... it's not a handout and never was.
    Rae
    4th Mar 2019
    2:07pm
    Overseas companies manage to attract shareholder investment without dividends or franking. It's called Capita Gains and is very nicely taxed in Australia. In fact a 50% discount applies for now.

    Returns from dividends are not guaranteed. It's a risky strategy to rely on dividend and franking credit income even if it has been lucrative for a while. There are Companies who discontinued dividends recently and it can happen to any shareholder.
    Old Geezer
    4th Mar 2019
    2:39pm
    Agree Rae I'd rather make a capital gain than receive a dividend and have been changing over to more active trading to collect those gains instead of just hoping they pay a dividend.
    Sundays
    4th Mar 2019
    5:59pm
    Yes Rae, the ‘financial advisers’ who convinced small SMSF to just invest in Australian shares purely for franking credits should be held accountable. Regardless of Labor’s policy, if there is a share market crash those SFR will suffer
    Old Geezer
    4th Mar 2019
    6:11pm
    Only if they sell.
    old frt
    4th Mar 2019
    10:20pm
    Trebor , a company that does not declare a profit and pay company tax ( either 25, 27.5 or 30%) cannot pay a franked dividend. The easy way is to make dividends tax deductable for the company the company will pay a higher dividend and the receiver of said dividends deals with all the tax implications .
    Farside
    4th Mar 2019
    11:29pm
    the geezer is right ... the intent behind the franking credits was to remove the impediment to formation of equity in Australia, where equity was now taxed twice and debt was taxed once.
    TREBOR
    5th Mar 2019
    7:36am
    Hmm - I read somewhere in the ATO blurbs that companies could opt for a tax deduction of franking on dividends.....

    First issue:-

    "The basis of the system is that if a company pays or credits you with dividends which have been franked, you may be entitled to a franking tax offset for the tax the company has paid on its income."

    Note MAY. It's not an automatic FULL refund, and to the naked eye, someone with heaps of franked credits and no income is rorting.

    Another issue:-

    "A corporate tax entity allocates franking credits to shareholders by attaching the credits to the distributions they make.

    The maximum franking credit that can be allocated to a frankable distribution paid by a corporate tax entity is based on its applicable corporate tax rate for imputation purposes."

    Since few companies actually pay 30% company tax - why is there so much 30% franking going around? Just a question..... that cheese in Denmark....phew...

    Hmmm - that below is not available here but I feel its movement in The Force:-

    "Corporations may not legally deduct the dividend payments before taxes but there is another approach: a corporate structure called an income trust. Income trusts allow a firm to deduct dividends, or trust payments, before taxes are calculated. The essence of an income trust is to pay all of the earnings after all business expenses to the unit holders, who are the owners of the income trust.

    An income trust is essentially a corporation with a different classification under tax law. Income trusts are not permissible in most countries, but there are a few (Canada, for example) that still allow them, or a variation thereof. Because trust payments are paid out to unit holders in a cash-distributions-per-unit format before taxes are calculated, the corporation will have no income against which to calculate income taxes, virtually eliminating its tax liability."

    https://www.investopedia.com/ask/answers/06/deductdividendpayments.asp

    Nope - can't find the bit I was seeking... anyway - such discussions open up a lot of thinking for some...
    LarryFine
    4th Mar 2019
    1:23pm
    OK Old Geezer - Spill the beans - how do you avoid it
    Old Geezer
    4th Mar 2019
    1:30pm
    By investing elsewhere and using derivatives to change franked dividend income into capital gains.
    TREBOR
    4th Mar 2019
    1:32pm
    Hence we get rid of franked dividends since there are so many rorts surrounding them.... easy as pie.

    Pay your taxes you loafing dole bludgers...
    Old Geezer
    4th Mar 2019
    2:36pm
    Why Trebor when they make it so easy so we can avoid them?
    TREBOR
    4th Mar 2019
    4:34pm
    Declare your earnings properly... no problem - once the rules are tightened up properly...

    Where someone appears to be living on no income, they can be levied with a minimum tax.... by contrast a social security recipient is living on a clearly defined income.. no problems.. the PAYE worker is overseen at every step by the ATO ...that severely limits the field to those who are apparently living on fresh air and sunshine.......

    Tax 'em all - let god sort 'em out!
    TREBOR
    4th Mar 2019
    7:10pm
    What part of 'earning's don't you understand, Lothario? And how does someone live on nothing? They don't - so they need to be gone over with a fine tooth comb. You, by your own admission, are one of the leches who pay no tax but live the high life...

    Trump had a solution for that - a minimum mandatory 30% tax.
    TREBOR
    5th Mar 2019
    7:38am
    I did warn you about that kind of language and approach, Loathsome. Now drop it once and for all.

    Not interested in terminology and jargon, sonny - just facts. Now grow up.
    Anonymous
    8th Mar 2019
    6:37pm
    OG, your solution may be practical for some, but it presumes all retirees who are not pensioners must needs become financial gurus in their old age in order to survive. It's NOT reasonable and it's certainly NOT fair. Retirees who saved for retirement ought to be able to enjoy the standard of living they earned and planned for - with security that the rules applicable when they made their plans will NOT be changed. Pulling the rug from under the aging is despicably cruel, and anyone who endorses this should be ashamed of their cruelty and lack of respect.
    floss
    4th Mar 2019
    2:44pm
    Not the smartest idea from Federal Labor and it will cost them a heap of seats at the next election but in saying that so has the Joe Hockey blunder done harm to the Libs.Lothario have you had a brain transplant you sound like a new man.Perhaps they should both leave super alone every time they touch it it becomes less attractive to people.
    TREBOR
    4th Mar 2019
    4:36pm
    .. a fine figures of two men these days it seems, is our Lothario.... not only the Court Jester, but also the Cloned Prince........
    Farside
    6th Mar 2019
    12:23pm
    @floss, and just how many seats is a heap? If Labor lose any then they remain in opposition and the LNP party continues, which makes the whole topic moot and your comment pointless. So, why bother to comment?
    pjvixen
    4th Mar 2019
    3:02pm
    Small shareholders, usually retired people trying to help themselves, should be exempt from this double tax grab which labor wants to impose. Tax on this credits should not be paid twice. This will also affect everyone's super funds as they all hold some assets in shares, the tax on the dividend having already been paid by the company which earned the income.
    TREBOR
    4th Mar 2019
    4:36pm
    Yes..........
    Rae
    5th Mar 2019
    7:58am
    Retired small shareholders are the only ones Shortens's new tax will effect. Obviously they want to fully destroy any independence left for the middle class.
    Mayesy
    4th Mar 2019
    3:35pm
    for some reason i do not have a couple of million to bander about. Like many already retired people a have a little and need the income in the fund to stretch it out.
    So what a bloody good idea it would be to tax my fund income 12%.
    What planet did you come from. Now i have to vote for the raving looney party- oh now i'm stuffed as this is both Labour and Liberals.
    Old Geezer
    4th Mar 2019
    4:27pm
    For most people it wold be better to lose their franking credits than pay 12%.

    The franking system is fair how it is now so they should just leave it alone.
    TREBOR
    4th Mar 2019
    4:44pm
    Well - the Guv makes an investment into everyone's account immediately, into a totally separate from government and mates organisation , of $3.2M for super and future super for every eligible citizen, and that ends the Social Security and Super rorting immediately. In a very few years this self -sustaining organisation, using judicious investment in genuine projects for the benefit of the nation at guaranteed return from Uncle /Guv, is totally independent financially.

    A short term surge in spending by all those newly minted retirees who are currently on OAP, but that will soon pass.... they'll eat a little lobster.. say - where is David?

    Jeez - 25m citizens of which number all are not eligible - that's only about (oops) too much)....

    How much is an 8 with thirteen zeroes again? Hmmm.. might not work...
    TREBOR
    4th Mar 2019
    5:02pm
    How about we graduate it in over years, taking into account annual contributions as well? Or start with a lower figure - say $1.2M each, and it won't be for the entire 25M people here...

    $1.2m at 8% = $96,000 pa tax free as pension for all - all added income and perks taxed at IT rates...

    You could go even lower......say $600,000 pp = $48,000 pp p.a... comfortable ....

    15 trillion? Or is it billions.. not sure about the definitions.... it's 15 million million.

    Ah - here we are:-

    "In 2016–17, the Australian Government estimates that it will spend around $158.6 billion on social security and welfare, and around $191.8 billion in 2019–20."

    "On the "long scale," one billion is 1 million million, or 1 and 12 zeroes (1,000,000,000,000). The long scale is still used in some European countries (France, for example). The UK switched to the short scale in 1970/71. On the "short scale," one billion is 1,000 million, or 1 and 9 zeroes (1,000,000,000)."

    Oz uses the 'short scale' of 9 zeros... so ... if it spends an average of, say $200Bn on social security and climbing over the next ten years, and that's 200,000,000,000 two hundred thousand million - the amount required would be attained in 60 years.... not including interest from projects... and then add in tax concessions for superannuation and then preferential superannuation schemes like politicians get... would be quicker by around another 50% + at a guess (though some say super concession are more than SS).... that'd make it ... ummm ... around 46-47 years.... with indexation coming from revenue from loans for the aforementioned infrastructure....

    Just working it out here.... I know, I know - just getting in touch with my inner eccentric....
    TREBOR
    4th Mar 2019
    5:11pm
    If indeed super concessions are outstripping OAP now...

    Ah.. here we are, in billlions:-

    2012-13 2013-14 2014-15 2015-16 2012-13 2013-14 2014-15 2015-16
    17.1 19.1 21.7 25.1 13.2 14.2 15.6 17.7

    So that's (say) $18,000,000,000 pa and climbing.... so we add together SocSec and SC = $38,000,000,000 p.a. (and climbing) - make it $40,000,000,000 pa. into $1,500,000,000,000,000 = 37.5 years (roughly) to recoup initial investment....

    This DOES cover all social security and superannuation.... but we must include contributions from preferential super schemes and from revenue from projects.

    How much startup do we need to cover current SocSec, and then a 'hedge' for future short term costs while waiting for a return on investment....

    In a minute - my brain is tired....
    TREBOR
    4th Mar 2019
    5:22pm
    Now - we rip back the Future Fund stolen unto Offshore... that's $130Bn - around three years running - so let's double that.. make it a start-up of $260... first years NewSocSec costs are $40Bn .... that leaves OzFund a startup of $220Bn from which operating costs must come... then we set up TARE (Total Australian Resources Extraction Corp) with a licence to kill off all personal vulture offshored investment in robbing our ore and our poor ..... and a few other major project operating orgs and stuff like the Snowies Scheme that will soak up unemployment and reduce the NewSocSec bill .. and Bob Menzies is yer uncle...
    TREBOR
    4th Mar 2019
    5:26pm
    Ahh - here it is:-

    "Superannuation Statistics

    Superannuation assets totalled $2.7 trillion at the end of the December 2018 quarter. Over the 12 months from December 2017 there was a 1.3 per cent increase in total superannuation assets.

    Total assets in MySuper products totalled $671 billion at the end of the December 2018 quarter. Over the 12 months from December 2017 there was a 5.3 per cent increase in total assets in MySuper products.

    For APRA regulated funds:

    There were $27.3 billion of contributions in the December 2018 quarter, up 5.3 per cent from the December 2017 quarter ($26.0 billion). Total contributions for the year ending December 2018 were $112.3 billion."

    Easy as pie - we roll all super into one OzFund.... rolling in loot....

    4th Mar 2019
    3:50pm
    I'm a simple man and my thoughts are why not leave things as they are. It may involve a bit of pride swallowing but the problem to one of Labor's immediate problems would be solved. It's not a good look that some individuals are losing money yet industry super funds are not affected. I know it's not as simple as that but that's how it is being perceived.
    Old Geezer
    4th Mar 2019
    3:52pm
    Labor problem wont be solved as they will get no revenue from this proposal if there are no franking credits to steal.
    TREBOR
    4th Mar 2019
    7:13pm
    .. then tax can be ascertained on full income dividend, as it already supposed to be given that franked credit @ 30% is supposed to be added into gross income for consideration.

    That being the case - there is no reason to frank credits at all - other than tax dodging by companies or shareholders or both.
    Anonymous
    11th Mar 2019
    10:31am
    Trebor, tax IS paid on the full income dividend. What you are saying is that low income earners should by overtaxed and high income earners fairly taxed - exactly Labor's disgusting position.


    Consider this example. ANZ pays 30% tax, deducted from the dividends of Bob, Jack, Tom, Harry and Sam.

    Tom earns $250,000 a year. He adds his dividend to his income, calculates tax, and claims the tax deducted from his dividend (franking credit) as a reduction of total tax. Fair? I think so and so does the ALP.

    Sam is a pensioner with $100,000 in shares. His dividend income tops up his pension. He pays no tax, but gets a cash franking credit refund. Cream on top of a pension, concessions, and dividend income. ALP says that's fair because he's not wealthy. The fact that he is a pensioner because he bought a $1.5 mil house is not relevant in the ALP's view

    Jack has $3 mil in super and pays tax on the income from $1.4 mil, so he declares his dividend and claims his franking credit as a reduction of the tax on the income from $1.4 mil. ALP says that's fair.

    Harry is a retiree who downsized his home to top up his super to $900,000 and support himself and his wife without a pension. He saves the govt over $40K a year by doing that, but Labor says he must be punished for being so honest and diligent. He will NOT get franking credits, so the 30% taken from his dividend is NOT refunded. He's effectively taxed 30% on income well below the tax threshold.

    And finally, there's Bob. He lost his job a few months ago and all he has to live on is his dividends, which give him an income of $15,000 a year. He won't get any franking credit refund either. He will effectively pay tax at 30% on an income way below even Newstart allowance!

    This is what you and the ALP are endorsing.

    You have a total misconception about what franking credits are. They are NOT tax dodging by anyone. They simply correct incorrect taxation - just like refunds of PAYE tax. If the shareholder's 30% tax deduction is less than their marginal rate, they declare the dividend and pay more If 30% is LESS than their marginal rate, they should get a refund. Simple! I don't understand how ALP and its supporters can misrepresent it so hideously. The statement 'they don't pay tax' is a blatant lie!
    Tom Tank
    4th Mar 2019
    6:19pm
    There is so much misinformation on this topic it is staggering. Most of it appears to be coming from those who think they are going to miss out. The old hip pocket nerve.
    A recent submission to the House of Reps enquiry showed that a self funded retiree couple with a 3.2 million super balance plus their own home and a $200,000 share portfolio that drew $130,000 in super income and $15,000 in dividend income would report a combined taxable income of $15,000 and pay no income tax whatsoever.
    The question then is should someone as wealthy as that receive a cash contribution from the taxpayers for excess franking credits.
    I doubt if any fair minded person would support that proposition.
    Keep in mind that the magic words are "taxable income" and not actual income. The wealthy have their way of minimising their actual income in a way ordinary punters cannot.
    Old Geezer
    4th Mar 2019
    6:31pm
    Yes but there are only 452 of them out of 1.3 million other low income earners.

    So is it right for Labor to hurt all those other low income earners just to get to those 452 people?

    They won't get a cent out of those 462 targeted as they will just change their investments.

    I hope you can now see how it is such a hideous policy.
    Tom Tank
    4th Mar 2019
    7:02pm
    Yes that was only one and an extreme one but there is so much, deliberately, misleading information being spouted this one did highlight an issue.
    To gauge someone's financial position by quoting their taxable income is tantamount to fraud. Mr Frydenberg states that 80 per cent oi of those that will be affected by the scrapping of cash refunds are on taxable incomes of under $37,000.
    Oh to have such a taxable income given the tax system we have.
    Tom Tank
    4th Mar 2019
    7:02pm
    Yes that was only one and an extreme one but there is so much, deliberately, misleading information being spouted this one did highlight an issue.
    To gauge someone's financial position by quoting their taxable income is tantamount to fraud. Mr Frydenberg states that 80 per cent oi of those that will be affected by the scrapping of cash refunds are on taxable incomes of under $37,000.
    Oh to have such a taxable income given the tax system we have.
    Old Geezer
    4th Mar 2019
    8:11pm
    Many self funded retirees have a taxable income closer to $20,000 than $37,000.
    Karl Marx
    4th Mar 2019
    8:31pm
    Lothario the fool, the OAP is no where near generous. How can anyone believe an LNP treasurer, they have all been liars of the highest calibre starting with big fat Joe. You are such a blithering idiot most of time. Take your medication & go to sleep, past your bedtime
    Eddy
    4th Mar 2019
    11:40pm
    Forgive me if I have it wrong but a retiree with an income of less than about $70k per annum would be entitled to at least a part OAP. All this talk of 'poor' SFRs' surviving on less than 20k pa seems far fetched to me. If they had any sense they would apply for the OAP, even a part OAP. Unless of course they are not eligible for the OAP due to being 'under age' in which case they could apply for unemployment benefits or disability or sickness benefits as appropriate.
    TREBOR
    5th Mar 2019
    7:45am
    Well, Eddy - there are many who rely solely on OAP..... but your point about SFRs under $20k is correct. they should be able to get a part pension.
    Rae
    5th Mar 2019
    8:05am
    Yes Eddy and Centrelink is going to be swamped by all those eligible for part pensions but managing without now. It's going to cost revenue which will be a poor consequence designed to support IndustryFunds.
    Anonymous
    5th Mar 2019
    10:36pm
    You are forgiven, Eddy, but you are wrong. Take a retired couple with, say, $900,000 in assessed assets. They get NO pension at all. Perhaps $80,000 of that is in their cars, furniture, household and personal assets. They SHOULD (according to expert advice) hold 3 years' cash reserves, so say another $120,000 to live on. That leaves just $700,000 to invest. At 5% average return (the government's figure) they have $35,000 to live on. With no pensioner concessions and possibly a few thousand in administration and management costs, they are considerably worse off than an aged pensioner couple - even a couple with no other income - unless they erode their savings, which effectively means that they are gifting their savings to the taxpayer. Why bother to save?

    It's all very well to say they can live off their capital. They can, and probably do. But doing so negates the value of their saving and potentially denies them specific benefits they saved for - such as quality care in their later years. The question that arises is 'why bother to save' if only to top up your income to the level you would enjoy if you didn't save? Really, there's no value in saving anymore unless you can be very wealthy. If Labor take thousands off these people, they have no recourse but to go on the pension. And the yet to retire have no incentive to strive to be self-funded. Ultimately, the burden on the taxpayer increases rapidly.

    Seems to me Rice Warner have failed to consider these people, as taxing their $35,000 income at 12% would be patently unfair when pensioners receive more than that - counting concessions - tax free. Their proposal is as flawed as Labor's.

    The sensible solution is being ignored by all - probably because it would impact the wealthy and actually BE FAIR. That is to tax ALL super (in both accumulation and pension phase) at 15% LESS than the member's top marginal tax rate - instead of the current 15% flat rate that unfairly benefits the highest income earners. For accumulation phase members, if that resulted in a negative tax, a contribution should be made to their fund. That would save billions currently being spent giving unnecessary and excessively generous concessions to high income earners, and would enable low income earners to build much healthier reserves, ultimately reducing the need for pensions and generating huge savings at all levels.

    The problem, of course, is that the wealthy would be paying more, so it's never going to happen. Labor's goal was to ensure only battling SFRs paid and the wealthy got off scot-free.
    Eddy
    5th Mar 2019
    11:15pm
    Okay OlderandWiser your explanation seems reasonable but I am still unmoved by their self inflicted plight. If someone has assets approaching $900k they should be self supporting, at least until they became eligible for the OAP, or part OAP. If they choose to live in poverty simply to retain their assessable assets it is their choice. My suggestion is they relocate themselves in a more expensive property so they can reduce their assessable assets to a point where they are eligible to some OAP while still retaining their assets for their beneficiaries. They only have to reduce their assets to about $840k to qualify for part OAP. I am sure a financial adviser could formulate the most appropriate balance of assets and income to maximise the OAP to which they are eligible.
    Karl Marx
    5th Mar 2019
    11:59pm
    just reinforces that the family home over a certain value, say $500k should be asset tested to stop SFR's from upgrading.
    Forgot to mention that Morrison doesn't give a toss about the countries finances as the current LNP have got us more into debt than any ALP government ever has.
    Bring on the election so we can change the current corrupt government & make Australia great again
    Anonymous
    6th Mar 2019
    7:26am
    Eddy, you are right about them upgrading their home and many are doing that - but it's hardly good for the national economy to encourage that behaviour. Others were caught short by the unfair assets test change. They may have just finally settled into a retirement home that they love - having carefully planned their retirement income. Then suddenly the rug is pulled from under them and they really don't want to have to move again. They may - like my partner and I - have a paranoid fear of dealing with bureaucracy and relying on pension income, because of suffering in early life. They may sensibly fear future cuts to pensions and want to hang on to their savings to hopefully avoid worse hardship later.

    There are so many scenarios, and the problem is that people rely on generalizations and assumptions to tell others how they should live their lives, and accept that those generalizations and assumptions are a reasonable basis for making rules than destroy the lives of those who don't fit the assumed mould. I am seeing it here all the time. Selfish Labor supporters just keep harping on how other people - of whom they have no knowledge at all and for whom they clearly have not the slightest bit of empathy - should live their lives, instead of acknowledging wrongs and joining a fight against unfairness and cruelty. We may not always win these fights, but it's a sick and sorry population lacking basic humanity that doesn't stand up against wrong. And it is clearly WRONG to attack lower income, self-funded retirees with a policy that quite clearly leaves the wealthy untouched.


    The bottom line is that the assets test is bad for the economy. It allows people to invest in very expensive homes and claim a pension they don't need, but it punishes people harshly for being responsible and honest. A couple with less than $1 million needs to be able to achieve a return of around 10% to be as well off as someone with half that much and claiming a part pension. So retirees are PLANNING to have half that much and impose on the taxpayer to co-fund their comfortable retirement. It's a STUPID politician who thinks that's good for the budget. Now Labor wants to make it worse still. It's damned hard for many people to achieve 7% return on a diverse portfolio, but some blue chip shares were achieving that. Slash those returns and many will struggle to average even 5%. Suddenly, anyone who saved for retirement will have to become a financial whizz in old age and spend their life trading for capital gain. Some creeps apparently think that's a reasonable expectation. Others think we should REQUIRE anyone who saved to find and pay a great financial adviser. All ASSUMPTIONS AND GENERALIZATIONS, imposing unfair expectations on people just so the bludgers and leaners can continue their party on other people's money. And that's what's happening. The responsible are paying for the bludgers and leaners to party and the number of responsible is reducing accordingly, so the budget is getting hammered.

    The smart thing to do would be to start rewarding responsible behaviour for a change, and encourage more of it. THAT would help the budget. Seems nobody in government - and very few among their advisers - has the intelligence to recognize that or else they are all just corrupt criminals. (I'm going for the latter - but SOME of us are smart enough to recognize the wrongs and fight them, instead of selfishly trying to dictate to others how they should live their lives.)
    Tom Tank
    4th Mar 2019
    6:19pm
    There is so much misinformation on this topic it is staggering. Most of it appears to be coming from those who think they are going to miss out. The old hip pocket nerve.
    A recent submission to the House of Reps enquiry showed that a self funded retiree couple with a 3.2 million super balance plus their own home and a $200,000 share portfolio that drew $130,000 in super income and $15,000 in dividend income would report a combined taxable income of $15,000 and pay no income tax whatsoever.
    The question then is should someone as wealthy as that receive a cash contribution from the taxpayers for excess franking credits.
    I doubt if any fair minded person would support that proposition.
    Keep in mind that the magic words are "taxable income" and not actual income. The wealthy have their way of minimising their actual income in a way ordinary punters cannot.
    Rae
    5th Mar 2019
    8:08am
    A few hundred have that. Most have less after decades of saving than the $875 000 it costs for the OAP . Not saving seems to be the smartest move now.

    And those concessions add up over time especially if you need health services and scripts.

    Self funding was okay but it's been wrecked now by Hockey's changes and by this new policy.
    old frt
    4th Mar 2019
    10:49pm
    Trebor , the definition of a public company (eg . BHP Billiton LTD.)
    A public company is a company owned by the public . A company that is owned by the shareholders who are members of the general public and the shares traded publicly . Ownership is open to anyone that has the money and the inclination to buy shares in the company. Public companies can also buy shares in other public companies.

    Hopefully this will help you realise shareholders are the owners of all these Public companies , now PTY LTD (Proprietary Limited companies ) are a completely different kettle of fish.
    TREBOR
    5th Mar 2019
    7:47am
    Doesn't remove your duty to pay personal income tax on income derived. Story ends. Abolish franked dividends.

    Thank you for your support for the changes required in corporate law and company taxation, Loathie.. there's hope for you yet in cutting out daylight robbery of the taxpayer.

    You're first to the guillotine...
    Rae
    5th Mar 2019
    7:30am
    What happens to non concessional amounts? These were already fully taxed before contribution. These advisers don't seem to have much of an idea about Superannuation or perhaps Superannuation is now so compromised it is not able to be properly understood eve by advisers.
    Anonymous
    9th Mar 2019
    2:24pm
    it does not matter how much a person has; if they have paid their far share of taxes and not defrauded anyone (but have built a good nest egg) why should they keep getting hammered???

    for those who think it is ok to hit people because they have scrimped and saved for their retirement; how would you feel if the shoe was on the other foot and it was YOU!??
    Farside
    9th Mar 2019
    3:10pm
    @Rae "... advisers don't seem to have much of an idea about Superannuation" and you do right? You are correct however in that superannuation legislation has been compromised to short term political whims.
    Anonymous
    9th Mar 2019
    6:17pm
    Envy is a powerful emotion, ardnher. I destroys brain cells. It ends the capacity to reason or think logically. And sadly it has become a plague in modern Australia, and the Labor Party is playing to it, knowing it is so widespread that appeasing those infected with it achieves popularity and political power.
    mike
    5th Mar 2019
    11:40am
    Senator Kristina Keneally has been saying Shortens Retiree Tax grab is only aimed at the rich wealthy retirees. This a lie. The wealthy have other stratagies and can avoid this. No, it will hurt the modest, working middle class who work and save and the low income retirees who can least afford it. Dont let Shorten shorten your retirement, and be very very careful of Labour stooges masquarading as independents. Also electricity charges under the Coalition is expected to drop to an average of $800pa, BUT rise to $1600 under Shortens new proposals.
    Misty
    5th Mar 2019
    7:50pm
    What garbage Mike, energy prices were supposed to come down under this govt after the Carbon Tax was abolished, well no one I know here in our country town has had a cheaper power bill under this govt, believe that, and you can believe in pink elephants and pigs might fly.
    Placido1
    5th Mar 2019
    9:18pm
    If you receive a "large" sum from franking credits that demonstrates two things.

    1. you are not a modest income retiree.

    2. You have a very unbalanced portfolio as you would have all of your investments in Australian stock that give franking credits, look out for an aussie stock crash --- you would HURT.

    Low income retirees? since no tax is payable on super in pension mode if you are over 60 you could receive $80,000 or much more per year and still say you have a low taxable income.
    Anonymous
    8th Mar 2019
    7:40am
    Placido1, the ATO knows EXACTLY how much a retiree has in a self-managed super fund and how much they earn. Every fund is required to lodge returns that carefully document all income, expenses, member balances, and payments to members.

    Labor is misleading people by claiming they can't tax super income fairly because high income earners can report low taxable income. They know precisely what the real income is, and it would be very simple to adjust the law to tax the real income rather than the taxable income.

    As to your other comments - people with balanced portfolios but relatively low super balances (around $1 mil or less for a couple, for example) will suffer a significant loss under Labor's policy. Yes, some with quite high incomes will lose as well. But those with higher balances have far more flexibility to rearrange their investments. It's the battlers Labor is attacking, and not just retirees either!

    And a 'large' sum from franking credits is how much, exactly? A couple just over the asset threshold and with a credit of, say, $6000 a year (which does not require a huge investment in shares) would consider the loss huge, given that it might be 17% of their net income.

    What Labor is doing is WRONG by every standard of fairness and decency. And it clearly is NOT about money for health and education, because if it was they wouldn't be openly telling people how to rearrange their investments to avoid giving Labor those extra dollars. They clearly know that any rearrangement will result in loss for those with lower balances and incomes, but they are telling them how to ensure the loss doesn't benefit the tax man.
    Karl Marx
    8th Mar 2019
    12:15pm
    Labor is not misleading anyone O&W. You only have to read their latest press releases to understand that they are targeting only the wealthy so as you are always changing the post topics to your whinging & whining about your FC one can only assume that you are one of the very wealthy that Labor will target.
    Before FC how did people invest. Diversify, everything changes, swings & roundabouts. We all have to do it every year when governments make changes.
    So stop telling pokies
    Anonymous
    8th Mar 2019
    3:31pm
    Targetting only the wealthy, Mr Fraudster claiming to be Lothario? Then how come the loss starts to decline when one has more than $1.6 mil in super and the higher the balance goes, the less the loss - but people with just over the threshold are suffering a huge loss? Labor is lying and so are you.
    Karl Marx
    8th Mar 2019
    3:49pm
    You're the liar & fraudster. You're just a whinger. get over it. This government screwed retirees by telling lies & constantly tells lies & misleads the public just like you are. You have become just another LNP paid troll you rightard.
    If you can't manage your finances by diversifying when rules change then that's your issue, thousands of us SFR have over the years changed our portfolios etc when rules or the markets changed.
    If Labor is lying then we'll find out after the next election won't we then we'll know that both LNP & ALP are full of BS.
    Anonymous
    8th Mar 2019
    6:45pm
    You are the one committing fraud by claiming Lothario's identity. That's lying and defrauding. And yes, this government lied. I do not. But you ARE lying, and you are a Labor troll masquerading as someone else to deceive and bully. Shame on you!
    clarkey
    5th Mar 2019
    12:16pm
    I cannot understand why people are getting cut up about losing free money that they really are not entitled to get! You pay no tax yet bitch about not getting free money that has to come from somewhere to give the hand out thanks to howard & costelleo. Just wanting to line their and their already very wealthy mates bank accounts. Such a greedy bunch of very selfish people. How much money will you take to the grave? It was a Keating initiative that has been raped by howard and costelleo. You know Keating a LABOR man. And you lambast Shorten and Labor for wanting to get it back to where it was at it's fairest. You still get your dividends, you still pay no tax on those and you bitch when the gravy train is about to be derailed. Selfish selfish people. Australia is definitely going down the sewer with all this greed that the scum lnp are behind.
    old frt
    5th Mar 2019
    2:02pm
    Clarkey, WHY ARE SOME PEOPLE MORE ENTITLED THAN OTHERS?
    A couple on a full pension with benefits and $350000 in assets is in a far more secure situation than a couple with $900000 in assets and no pension or benefits.
    Misty
    5th Mar 2019
    7:54pm
    Anyone with $900,000 in assets who doesn't have a good financial advisor can't blame any one else for their situation, surely anyone with that sort of asstes invested well would be able to live very comfortably.
    Captain
    5th Mar 2019
    9:12pm
    Clarkey, free money !!! I presume you are talking about Dividend Imputation Credits.

    If you can follow this maybe you will begin to understand something about Labor's idiotic policy. Those on the Aged Pension will retain their Imputation Credits. Those Self Funded Retirees (not on the Aged Pension) will not retain their Imputation Credits.

    This sounds like discrimation is being built into the Australian tax system. Perhaps your beloved Labor Party will enjoy lawsuits from approx 800,000 SFR's regarding this discrimination.

    By the way I do not vote LNP, Labor or Greens. They are all self-serving leeches who deserve to be put back into the Zoo, so that decent people can throw them peanuts.
    Anonymous
    5th Mar 2019
    10:42pm
    Misty, it's no wonder you don't have $900,00. You have absolutely NO IDEA. A couple with $900,00 would be far better off with only $500,000 in most instances. The other $400,000 is worthless, because they have to erode it to compensate for not getting a pension. In effect they are forced to GIFT every cent of it to the taxman. The only benefit they enjoy is not having to deal with Centrelink for a few years, until their savings are about half gone giving them NOTHING, and then they qualify for a part pension and their income soars.

    Many soon-to-retire are draining their savings deliberately because they have seen that there is no benefit to having them.

    As for a 'good financial adviser' - clearly you paid no attention to the findings of the Royal Commission. Finding a 'good adviser' is like finding a needle in a haystack, and then you have to be able to afford their whopping fees.


    Pensioners get an average of $1 million handed to them over the term of their retirement. How the hell do you figure $900,000 in savings is a lot?
    Aviator
    5th Mar 2019
    11:33pm
    Olderand Wiser, why are you so rude to Misty? I have had second thoughts and the pensioners are getting a raw deal.
    Misty
    5th Mar 2019
    11:50pm
    Don't worry Lothario, I am used to OGR'S way of commenting about my posts, also she does not take any notice of how to stop her posts showing up twice. Surely the interest from $900,000 would enable anyone to live a comfortable life, if not then they must be doing something radically wrong or not have received the best financial advice.
    Oh and BTW, OGR or whoever you like to call yourself now, I have a very good Financial Advisor.
    Misty
    9th Mar 2019
    4:29pm
    OAW, I am not well off but not all Financial Advisors cost the earth, more insults and abuse from you, I was only repeating the information that other people have posted here on how to avoid duplicate posts, no one else took exception to their advice so why you?. Please stop these nasty insulting comments.
    Misty
    9th Mar 2019
    6:55pm
    I have never made bullying remarks about your finances, I may have said, that maybe people in your situation should look to see if you can re structure your finances, there is nothing bullying in that.
    Misty
    9th Mar 2019
    6:59pm
    For your info OAW I have less then $200,000 in my super, no other assets beside an old car and my furniture,do you consider that well off?.
    Misty
    10th Mar 2019
    10:39am
    I don't ask you where you got your money from OAW, and I said I have less then $200,000, and we did save, my late husband and I, and lost so much of it in the GFC so stop judging me and other people posting on here.
    mike
    5th Mar 2019
    4:41pm
    To Clarkey. The working middle class has worked hard and saved for their retirement, then smashed under Hockey's tax changes, now they will be hit hard again under Shorten's retiree tax grab. They paid taxes all their lives, invested in shares for their retirement, the company pays the tax on behalf of the shareholder, and if its below their marginal rate they get a refund. Dont YOU expect a tax refund on the tax you paid Hey Clarkey
    Misty
    5th Mar 2019
    7:56pm
    This topic has been done to death so many times already, give it a break please YLC'S

    6th Mar 2019
    9:14pm
    The cart is still being put before the horse. What about if,
    1) Labor learned to live within the available budget - precisely as those federal politicians are telling the public to do; and
    2) if Labor can justify programs that ought be resourced, and they haven't tried to do that as yet, then they can find savings and improved efficiencies for savings to fund their changed priorities?

    The public is well and truly sick of politicians spending up, especially on themselves and treating the public as idiots believe politicians' shabby manipulation, wedge politics and spin.

    6th Mar 2019
    9:20pm
    Labor has some gall to be openly declaring they intend to spend billions more, just because apparently and dumping more taxes on the public when the economy is teetering on the brink of a downslide and the public are doing it so hard.
    Aviator
    6th Mar 2019
    10:54pm
    What downslide, just bought a new car.
    Anonymous
    7th Mar 2019
    1:47am
    Car sales have slumped as well.

    http://www.caradvice.com.au/732730/finance-house-prices-sales/
    Farside
    7th Mar 2019
    10:30pm
    Treasurer Josh Frydenberg was asked twice at a media conference whether Australia was in a GDP per capita recession. “The economy, the fundamentals are in good shape,” he said. “GDP growth is at 2.7 per cent for the calendar year.”

    https://thenewdaily.com.au/news/national/2019/03/06/what-is-a-recession/
    Misty
    7th Mar 2019
    10:54pm
    Libs can't make up their mind, maybe a recession coming according to the PM, not so according to JF, as Farside has commented above.
    Anonymous
    8th Mar 2019
    7:42am
    Libs are quite correct and consistent in their statements. We WERE tottering on the brink of recession, but the government has succeeded in turning things around to deliver a small surplus and strong fundamentals. Recovery is never immediate and of course whenever recovery is in progress there's danger of relapse. Relapse is certain if Labor get control! And it will be BAD.
    Anonymous
    9th Mar 2019
    2:13pm
    Warren Buffett, a highly respected man on the world stage is worried and when he is worried about the world economy people sit up.
    Misty
    13th Mar 2019
    2:14pm
    The trouble is that these days, so many mums and dads are investing in shares, that never happened years ago and now companies are more interested in keeping their profits for the shareholders, not worrying about a wage rise for their employees or keeping prices low for their customers.

    8th Mar 2019
    7:18am
    Labor's cruelty extends beyond struggling self-funded retirees. Consider these two younger Australians:

    Terry is saving to get married. His grandmother gave him some blue chip shares for an engagement gift, telling him investing in blue chips was one of the few ways battlers on low income earners could start to get ahead financially. Unfortunately, Terry's boss has cut his hours and now he doesn't earn enough to pay tax, so Labor will take 30% of his dividend income. That's a huge hit on a battler who genuinely doesn't earn enough to pay tax!

    Andy had an accident in May and is now struggling on a disability pension. Because it happened after March 2018, he's in Labor's firing line! The dividends and franking credits on that small parcel of shares he bought a few years ago was really helping, but Labor will take 30% of his returns on those shares.


    Andy's Gran is one of the retirees Labor is planning to rob. She consulted her financial adviser. He said if she sold her shares now she would lose about 40%. Moving to an industry super fund doesn't guarantee anything. It depends on the mix of retirees vs members in accumulation phase. And that mix could change radically with retirees moving into the fund. Many funds are now predicting all members will suffer a substantial loss. One fund suggested working members would retire about $56,000 poorer on average.

    The adviser suggested Andy's Gran wait and see, as the legislation might not pass. Labor might not even win the election. If she does have to sell her shares, the loss will probably entitle her to a pension, so Labor will gain nothing and her income will actually rise, but a big chunk of her savings will be gone and she'll never get franking credit refunds again. He commented that another client, who had plunged $1 million into upgrading his home last Christmas, and had a grandfathered income stream, would be pulling in $65,000 a year and keeping his franking credits, with a total wealth of 2.5 times that Andy's Gran had. "That's Labor's idea of 'fair' apparently," was his parting remark.

    Terry and Andy are urging all their mates to vote LNP, even though they have always believed Labor was the 'working man's party' and they really hate the LNP.
    Anonymous
    9th Mar 2019
    2:12pm
    problem is most people are entirely uneducated where politics are concerned. not me saying that either. Only have to see people being interviewed in the street from time to time. ..no idea who the PM is ..get mixed up with State and Federal politics and no idea how the parliamentary system works. not enough education in schools. all they know is how the welfare system works!
    Farside
    9th Mar 2019
    3:13pm
    ardnher +1, though I am not as confident most people know how the welfare system works.
    Anonymous
    9th Mar 2019
    6:20pm
    They know how to manipulate to qualify for welfare and how to scream for more and more and claim it's not enough. And they know how to demand someone else sacrifice their life savings to pay for it.
    Adrianus
    9th Mar 2019
    2:20pm
    Why does the Labor Party want more of my income? Are they admitting that they simply cannot balance the budget?
    Anonymous
    9th Mar 2019
    7:31pm
    They need it to buy the votes of their envy-infected followers, Adrianus. Haven't you noticed all the 'it's unfair' and 'I need more' comments. Labor needs your money to pacify those who say that.
    Anonymous
    11th Mar 2019
    4:46pm
    It is unreal. Labor isn't even in office and they are pulling a swifty. The hand is out for hundreds of millions dollars more, but they haven't even justified what they might be spending it on.

    Imagine saying to the new employer, "Hey boss, I know I haven't even started yet, but I know that with my profligate spending I will not be able to live within my budget. So I want a bug rise up front and no, I have no idea of what I will be spending it on, and you shouldn't be asking".
    Misty
    11th Mar 2019
    5:52pm
    Well LJ hopefully everyone will find out when Labor gives their Budget Reply.

    10th Mar 2019
    8:38am
    The ALP is presenting its policy as a tax on wealthy retirees, and sadly opponents are playing into the ALP's hands by naming it a 'retiree tax'. The policy is being widely misunderstood. IT'S A PENALTY FOR HAVING A LOW INCOME.

    In fact, this policy is a highly discriminatory policy that favours the better off, closes opportunities to and unfairly taxes the less wealthy. It's a hit at the lower classes and a gift to the wealthy.

    The fact is that Labor admits that tax is taken from dividends before they are paid to shareholders, and that the shareholders are entitled to a credit for that tax. i.e That the shareholder actually paid the tax (just like employees pay tax when employers deduct it from their pay and remit to the ATO). Labor has never disputed this. In fact, it so strongly agrees with this premise that it insists higher income earners MUST be able to claim a credit for the tax paid. It also agrees that the total dividend (INCLUDING the franking credit) is the amount of taxable income that must be declared.

    The ALP then goes on to say 'If you are wealthy or a high income earner, you can claim a credit for the tax the company deducted from your dividend - but if you are a LOW income earner, you must suffer unfair taxation by accepting that the ATO will keep your money even though it should be refunded.

    Forget retirees for a moment and consider working class Australians. Blue chip shares are one of the few relatively low-risk investments they can get into with limited capital. Property requires a hefty deposit and access to loan funds. Foreign investments, derivatives, day trading, etc require knowledge and skill that many workers find hard to acquire. Term deposits pay too little return. Private equity lending is risky and often limited to larger investors. Blue chip is easy and accessible. So a worker wanting to improve his financial situation chooses to buy blue chip shares. All good. He receives franked dividends and claims credits for the franking component, and enjoys an adequate return that lets him grow his wealthy gradually.

    Now he loses his job. With no income, he has no tax liability. Thank goodness for that dividend income! But now he is taxed 30% of that income, even though he should have no tax liability.

    The opportunity to grow wealth via probably the best opportunity ever made available to most Australians is now withdrawn and limited only to those who enjoy an income that makes them liable to a 30% or more tax rate, or who tolerate unfair taxation. Labor is punishing people for having a LOW INCOME.

    What the LNP did in extending fair tax on dividends to all, instead of just the higher income earners, was to increase fairness and opportunity. They were looking out for the less advantaged.

    It's very sad that Labor has conned so many to think it is looking after the interests of average Australians, when in fact it is extending privilege to the wealthy and taxing the less well off unfairly.

    Please, Labor voters, wake up and tell Labor it's not on! There are simple and fair ways to tax wealthy retirees - and I agree they should be taxed! But it's easy to do it right. Lower the Transfer Balance Cap. Increase the 15% tax rate on money in accumulation funds over a fair threshold. Tax superannuation pension income over a given fair threshold.


    The ATO knows exactly how much a retiree holds in super and how much their super account earns for them, as well as how much they draw from it. There is ABSOLUTELY NOTHING requiring Labor to implement an unfair and punitive policy that hurts the less well off and doesn't touch the rich. There is NOTHING preventing them devising a fair tax policy based on current principles that those who earn most should pay most. Demand that they do it! Don't let them get away with unfairness and discrimination. If we allow it, how do we know who their next victims will be?