16th May 2016
FONT SIZE: A+ A-
Budget 2016/17: Will super changes affect your retirement?
Author: Kaye Fallick
Timing of superannuation changes important to retirees

As we plunge into Election 2016 campaigning, there are two competing proposals on the table concerning superannuation.

On the conservative side, one of the most significant changes to super in Treasurer Scott Morrison’s first budget affects the amount of capital you can keep in a tax-free super structure.

The policy of the other major party, the Labor Party, is to tax super over $75,000.

So are either, both, or neither of these policies fair?

First up, let’s consider the Turnbull Government’s Budget 2016 change, as this is likely to become law, assuming the return of a Coalition Government with a Senate majority. A big assumption perhaps, but a real possibility nonetheless.

This policy means that retirement savings accounts would be capped at $1.6 million and amounts over this cap can be held in superannuation accumulation accounts and taxed at 15 per cent or invested by other means. Additionally, a $500,000 lifetime cap on non-concessional contributions was put in place on 3 May 2016 and backdated to 2007.

The sting in the tail, of course, is the apparent retrospectivity of this proposed legislation. Whilst ministers Morrison and Bishop have declared that it is not retrospective – “It’s absolutely not retrospective. It’s about the tax rate on future earnings” Ms Bishop stated yesterday – the fact that this applies to savings accumulated over a nine-year period really does look, smell and even quack like retrospectivity.

This is the view of a former conservative Deputy PM Mark Vaille, who noted,

“What is happening is that year in and year out there is (sic) always changes to superannuation … (it) has become an issue which is tampered with too much and people can’t keep up with the changes”.

The alternative policy offered by the Labor Party would limit tax-free earnings for retirees to $75,000 a year, taxing earnings above this amount at 15 per cent.

Critics of Labor’s plan have noted that such a limit should be indexed for inflation or the (real) amount of tax would increase over time and fluctuating returns would, over the longer period, mean taxpayers are worse off. So if the actuaries are to be believed, the Labor Party will tax retirees at a higher rate over the longer term. The actuarial calculations, however, are based upon a $2.5 million balance with returns which range between -5.4 per cent to +17.8 per cent (a 6.6 per cent mean). Current retirees will perhaps gasp in wonder at the thought of a 6.6 per cent return – most haven’t enjoyed such a rate for a long while.

My take on this? A cap is necessary and a $2 million cap is much fairer than a $1.6 million one. But grandfathering of such legislation is essential. Retrospective changes are simply unfair to those retirees, rich or poor, who have saved for nearly a decade (2007 – 2016) under one system, only to have the rug pulled out from beneath their feet when back-dated changes are brought in. The arguments about retrospectivity are fierce – for instance Fairfax economics editor Peter Martin states clearly that the tax starts in 2017 so this tax cannot be retrospective. But this position seems to somewhat obtusely miss the point about retirement planning. It is not something that is – or should be – adjusted on a Federal Budget to Federal Budget basis. Most of us will live 25, 30 or more years in retirement. So planning our income for these decades requires consistency of legislative intent and stability of rules. As one recent YourLifeChoices survey respondent noted, “I would be fine if only they would stop shifting the goal posts”.

The Labor policy of limiting earnings is also defensible but, again, perhaps $100,000 is a better limit than $75,000, which is based on five per cent earnings on an assumed $1.5 million balance. Just as the Coalition’s cap could move from $1.6 to $2 million, so could the Labor assumption move to five per cent of $2 million, i.e. $100,000, as many retirees will need to fund themselves for 25-plus years. And if they eventually require aged care, our new ‘user pays’ system is far from inexpensive.

And this brings us back to the crux of the matter.

As we have noted before, the risk of retirement income funding has been shifted to the individual. This is now your problem. So those who have obeyed the ‘rules’ thus far need some latitude when it comes to savings and earnings caps – and an assurance that the goal posts will never again be retrospectively shifted. The grandfathering of any such legislation is a basic right, not a luxury now we are expected to more fully fund our own retirements.

What do you think? Are the proposed changes to the superannuation tax retrospective or prospective?

RELATED ARTICLES





    COMMENTS

    To make a comment, please register or login
    BrianP
    16th May 2016
    10:16am
    This Government has the sneaky reputation for not being open and transparent about their policies. They think they can pull the wool over our eyes.

    Don't trust them.
    Paulodapotter
    16th May 2016
    10:59am
    Yes Brian. They do it for the same reason dogs lick themselves. Ii's because they can. They know most of the public has the memory of a fish and the life experience of a newt. I love animal analogies.
    Retired Knowall
    16th May 2016
    12:27pm
    Have a look at Change.Org and sign up for the petition to stop us paying for no longer serving politicians.
    Bonny
    16th May 2016
    12:35pm
    That petition is very misleading and you can't just stop paying for non serving politicians as it was part of their wage package. It is like telling people they no longer get holiday pay or paid for sick leave.
    TREBOR
    16th May 2016
    12:42pm
    Point is it should never have been part of their wage package - they are well reimbursed already and all their living costs are covered as well. How then was there any need to give them a freebie for life when they are boosted out of office?

    If you can't sit around on $200k+ without costs of living other than tax for a few years and set yourself up - you are either plain greedy or plain stupid and love the ponies and roulette wheels etc too much, or are too accustomed to the high life.
    TREBOR
    16th May 2016
    12:43pm
    They should be only drawing sustenance from their super IF - what a joke - they have no other income and work. This free handout for life at mega rates for 'public service' for a few years is a joke.
    Bonny
    16th May 2016
    12:51pm
    I didn't say I agreed with pollies getting their pension. All I said was that the petition was badly worded and misleading.
    TREBOR
    16th May 2016
    12:54pm
    Fair enough - I tend to avoid those for that reason, Bonny. Fine-spirited but often misleading or mislead.
    Bonny
    16th May 2016
    1:02pm
    I gave her the reasons why her petition was misleading and asked her to change it to give it more credibility but she thought otherwise. Problem now is that even if she get enough signatures it will not get the result she wants.
    TheDon
    16th May 2016
    4:17pm
    While it may never happen, I love Retired Knowall's thought of not paying for 'no longer serving politicians'. In fact, we could use Scott Morrison's argument back at him and contend that 'technically' it is isn't a grand-fathering issue as their pension payments would only stop from now on.
    Bonny
    16th May 2016
    4:28pm
    TheDon that's why I ask the woman with the petition to change her petition as it should only be for new pollies.
    Anonymous
    21st May 2016
    7:53am
    I think the petition should have said ''stop paying inept morons for stuffing the country''.

    I have never seen a dumber and more inept, corrupt and dishonest bunch of politicians in my life.

    No, Bonny. It shouldn't only be for new pollies. It should be retrospective, like the stinking attacks on retirees. We also planned our retirement according to THE LAW. But they can pull the rug from under us without notice, in a cruel and unfair manner.

    If the law says they are entitled, CHANGE IT. They have no problem doing that with laws that affect others. The age of entitlement is OVER. Sacrifice should start at the top. Good leaders lead by example. We have BAD LEADERS who SHOULDN'T BE PAID.
    CindyLou
    16th May 2016
    10:18am
    I totally agree with previous YLC P post - its not right to shift the goal posts midway through the 'game'.
    Paulodapotter
    16th May 2016
    11:01am
    The fundamental rule for government inspired initiatives is similar to the religious rule. "What God giveth, God can take away."
    Anonymous
    21st May 2016
    9:28am
    I read that the bible also states ''he that has little, all that he has shall be taken from him.''
    Sounds like we have some bible bashers in parliament!
    ex PS
    21st May 2016
    2:05pm
    I think the quote should be what Caeser has given, Caeser can take away, as this government sees itself as a sort of republican /dictatorship.
    Retired Knowall
    16th May 2016
    10:30am
    This situation just reinforces the need to ensure you have a diversified portfolio. Anyone with all their savings in Super will always be subject to Sovereignty Risk.
    That said whichever party wins the election and modifies the Super rules, it will still be a tax effective place to park some of your savings. Tax free $75K income stream is pretty good and $1.6M tax free is also fair and reasonable.
    The other alternative is to draw down your Super to under the cap and buy fully franked Blue Chip shares.
    Paulodapotter
    16th May 2016
    11:05am
    The best anyone can do, is not to rely on governments to secure your future. They can't and they won't. If you could rely on governments in this way, there would be no wars, unemployment, climate change caused by human intervention, poverty, blah blah, blah. We have to be as self reliant as we can possibly be and not get locked into the status quo.
    TREBOR
    16th May 2016
    12:46pm
    Easily said, Paulo - but remember that many people don't have such an easy run. The coming generations who are suffering permanent unemployment and under-employment are a clear case in example, not to mention those who've endured divorces etc in their forties and then endured economic downturns and prejudice against the old etc in work.

    Would that life were as simple as being self-reliant - you are quite simply not allowed to be.
    Anonymous
    21st May 2016
    7:59am
    And if you try to be self-reliant, sacrificing lifestyle to overcome disadvantage and save for old age, you are harshly punished. The government takes $78 a year for every $1000 you save over a low threshold, regardless of how it was acquired, taxed or what it's needed for or what sacrifices you made to save it. They ignore the fact that you can only earn maybe $25 to $50 on that money. They force you to reduce your savings, no matter how many years of retirement you have left.

    It's impossible to be self-sufficient given these unfair and cruel rules they impose.

    Fine for the privileged, Retired Knowall. They keep their high tax-free income. The less privileged are totally screwed.
    ex PS
    21st May 2016
    2:28pm
    RK, what a lot of people don't realise is you can diversify within your Super Fund, all you need do is understand how Super money is invested.
    My fund offers investment opportunities within a range of low risk, low to medium, medium to high risk and high risk. You choose which environment you wish to invest in. The main benefit is that the money is in a low tax investment.
    My main concern with the Super investment environment is the potential for interferance from the governement, who can't seem to resist the temptation to interfere with the system in order to get their hands on money that does not belong to them.
    Goldleaf
    16th May 2016
    10:52am
    The issue of retrospectivity is a complex one. Governments can change taxes anytime they feel like it. There are also laws which enable them to stretch the boundaries for budgetary reasons. To give an example - In 2012, the NSW Coalition amended the Workers Compensation laws to place time limits on those on weekly benefits as well as limit coverage for medical conditions. All injured workers (except police, paramedics etc), regardless of their injuries and when they occurred were affected. The consequences of this was some workers having their court decisions overturned - some court decisions for compensation included 'weekly benefits until normal retirement age of 65' within the settlement (if you knew how little compensation for permanent injuries are, you would understand why this occurred). Suddenly workers with injuries so bad they could not work faced being forced back to work or onto the dole. That is definitely a retrospective application of the law and was not really challenged as injured workers do not have the resources to do it, so it remains.

    In my own case, I purchased solar panels in April 2011 three days before Barry O Farrell abolished the solar buy back system. Despite numerous calls to the Liberal party, I was told basically 'tough luck' despite the fact that I had evidence that I qualified for it. The reasoning I was given and why it is relevant to the superannuation issue was this - "The solar buy back program is a benefit the government has given to people, it is not a right so it can be taken away anytime we feel like it."
    So there you go, they can take away your benefits whenever they feel like it, they can make laws retrospectively and not care about the consequences. The point is this, the next time you hear about anything being made retrospective, protest and complain about it, do not sit back and only think about when it might affect you because once they get away with doing it in one area, it makes it a lot easier to do it next time.
    Retrospective laws are illegal in the USA and are illegal for criminal charges under the UN, but here in Australia they are becoming more common, it is up to all of us to fight it.
    Paulodapotter
    16th May 2016
    11:07am
    As I indicated before, what the government giveth, the government can taketh away. In this country we don't have a bill of rights, which means the government can legistlate anything it likes. No one is safe in this country, but then no one is safe anywhere.
    TREBOR
    16th May 2016
    12:50pm
    "was not really challenged as injured workers do not have the resources to do it"

    Gold - you are totally correct - government has always known at the back of its beady little mind that nobody can effectively challenge it. That is why we need careful guards set against government itself, and avenues made available for challenge without massive cost.

    There is NO price on Justice, and the duty of government is the protection of the people from all enemies, domestic and foreign - as I've stated elsewhere - that most importantly includes itself.
    ex PS
    21st May 2016
    2:16pm
    At the risk of being subjected to theire of the anti-union movement, I make this statement.
    If these workers had been members of a union and had a reasonable claim the Union would have fought their case fo them. Many Union members join as a kind of insurance policy, if you need the services it is quite cheap.
    TREBOR, though I agree with your sentiment, I also think that in this country you get the justice that you can afford, you don't see many rich white collar offendors spending much time in gaol.
    Fobwatch
    16th May 2016
    11:47am
    Hold on. Are the parties proposing taxing savings, or taxing interest and other returns from invested savings?
    Retired Knowall
    16th May 2016
    12:22pm
    They already do.
    Sundays
    16th May 2016
    12:09pm
    Well said Kaye. I completely agree with you. Even though I am not affected (this time), why penalise people who have followed the rules and planned accordingly. The whole idea of retrospectivity on some things and not others is wrong and confusing
    Anonymous
    21st May 2016
    8:16am
    Sundays, did you object to the changes to the assets test, or is it only unfair when it hurts those who can genuinely afford the pain?
    KSS
    16th May 2016
    12:32pm
    people on this site were baying for the blood of the so called 'rich'. Well now they've got it (or will have) and they are now whining about the unfairness of it. Could it be they finally realise that $1.6m does NOT make you rich? Or is it that it hits just a bit too close to home and they are now affected themselves?
    Bonny
    16th May 2016
    12:41pm
    Agree people whinge here no matter what.

    Problem with LNP policy is that it is just so complicated and wil take an army of people to police it.

    ALP policy is too restrictive and doesn't take account of the swings in income from year to year with growth investments.

    I won't be effected by either policy but the LNP one does allow me to add more to my super so I can make more income without paying more tax.
    TREBOR
    16th May 2016
    12:52pm
    I said over ten years ago to our local newsagent that he would need $2m in the bank (or whatever) to ensure a comfortable retirement considering his business income etc. He thought then I was joking. Now he knows differently.

    That $1.6m needs to be indexed, otherwise the costs of rates, and all other costs will soon strip it as bare as a chicken carcasse at a Sunday dinner...
    Bonny
    16th May 2016
    12:57pm
    The $1.6m is to be indexed. Problem is no one knows how that $1.6m is going to be applied as the devil is in the detail.
    TREBOR
    16th May 2016
    1:15pm
    Hmm - yes - $1.6m in accumulated funds... how does one contribute more if one is retired? Including assets is a cunning move, since a home will obviously increase in value over time, and may well outstrip the deemed rate of indexation, leaving the superannuant worse and worse off... being cooked slowly like a frog in a pot of water...

    Always beware of governments bearing gifts...
    Anonymous
    21st May 2016
    8:23am
    KSS, if $1.6 million doesn't make you ''rich'', then how is it that less than $1 million makes you ''wealthy'' and ''not in need of a pension''. Seems like a double standard going on here. A pension is only a negative tax after all - a tax concession for folk who don't earn enough to get tax concessions. The net tax you pay over a lifetime is the sum of all the tax your paid, less the rebates and benefits you received. So taking the pension away from people who saved is taxing them. And taxing their income at up to 320% (which the new means test does) is something no Australian would tolerate if it was honestly labelled ''taxing''. No would they tolerate double-taxation - taxing savings from earnings that were already taxed.

    But the well-off are happy to see the not-so-well-off suffer unfairness and double standards. And the green-eyed battlers are happy to swallow slick lies about ''millionaires getting pensions'', with no regard for the true facts of the situation.

    Ultimately, the people who are suffering gross unfairness are not those with more than $1.6 million - who have enjoyed unfair benefits to date - but those with between $500,000 and $850,000, who struggled for a lifetime hoping to be self-sufficient in old age but had the rug pulled from under them by falling investment returns, and then were persecuted by a government whose unfair conduct the selfish ''I'm okay bugger you'' brigade quite happily condone - merrily branding people with less than half what they have ''greedy'' for wanting a small share of the pie that they, themselves, are feasting on.
    TREBOR
    16th May 2016
    12:39pm
    The proposal that is fair to all is to pay everyone single pension at age 65, then treat all other income above pension according to the tax scales. That way most superannuants would lose nothing, and many would gain, the the primary impact would be at the 'top end' - into which I arbitrarily toss politicians and all others who've had the big benefits, since they would be paying the tax they've previously avoided by over-using super as a haven.

    The arguments go round and round - but in simple terms - anyone who has had the opportunity to shovel away mega superannuation has had every opportunity to get set up in life - and therefore there never was a need for them to stash massive super. Many at the lowest end have mortgages on HOMES - not investments, into their retiring years. In any case, superannuation should have been capped at a reasonable level, then treated as savings from there on, ever since it became the law of the land.

    That applies to everyone, including those covered by the offshore futures fund.

    Just how many bites at the tax cherry do these fat cat super hoarders want?
    TREBOR
    16th May 2016
    1:01pm
    This scheme also means that 'retirees' who continue to work will not have Pension cut, as currently occurs, nor will they have pension included as taxable income - something not endured by superannuants in any way.

    Working in retirement often IS THAT PERSON'S SUPERANNUATION, since they have not had the opportunity or have lost mightily along the way, for any number of reasons. Life is not as simple as some imagine it to be. My cousin and her husband have been public servants all their working lives - they have simply no idea how a person can be earning more than they do, and then be plunged into unemployment etc almost overnight, as happened to me.

    I say again - every working pensioner should have income treated the same as superannuants get it - Pension has garnered NO tax dodges along the way - why should it be taxed because the recipient works for extra since they don't have lovely super?
    Alex
    16th May 2016
    11:20pm
    I agree Trebor this is the only fair and reasonable way to manage retirement incomes but it does not seem to have crossed the minds of any of our politicians, yet this is what was originally envisioned by Chifley and Menzies when a pension scheme was set up. It takes the stress and acrimony out of the system.
    Anonymous
    21st May 2016
    8:26am
    Three things our politicians do not understand, Alex:

    Fair, reasonable, economically sustainable.

    Hmmm. Add common sense, logic, mathematically correct.

    We have a bunch of greedy, self-serving, overpaid fat cats stuffing the nation, and sadly we have a lot of greedy, self-serving, ''I'm okay bugger you'' privileged supporting them to stuff the nation.
    Budwah
    16th May 2016
    12:40pm
    I may be wrong but I thought the budget had to be passed before any changes happened.
    As I see it the budget was announced then the election was called without debate in either house therefore it has not been even before the upper house for review. So it could be called a non identy.
    Bonny
    16th May 2016
    12:54pm
    Yes it's all just proposed until we know who forms government and then it has to pass both houses of the government.
    thommo
    16th May 2016
    1:06pm
    Faye..You make reference to the non-grandfathering' of changes to superannuation etc as being a breach of our rights.
    Well this government has done just that with the changes they made to the pension assets in the 2015 budget, noting Abbots denigrating comment that he wasn't paying the pension to "liquid asset millionaires".
    No one, not even YourlifesChoices has kicked up a stink about this injustice.
    Even the CPSA couldn't give two hoots about the changes, because they supported the the government and the (Judas) Greens in making the changes, yet the CPSA is supposed to be looking after the interests of seniors and retirees. Thet had no mandate to speak on behalf of retirees.
    It would be good if you and your publication could speak up about it on behalf of those several thousand retirees who will be adversely affected by this disgraceful change, especially those who will lose their part-age pension altogether as from 1.1.17.
    thank you
    Captain
    16th May 2016
    6:24pm
    Thomas,

    Because of the new rules to come in from 01/01/2017, there will not be several thousand retirees who miss out but rather more than 330,000 and as the threshold is not indexed for the first 4 years, it is estimated another 250,000 will miss out.

    By the way my wife and I (both over 65) do not qualify for a pension and after 01/01/2017 will never qualify, but that does not stop me from railing against the changes on behalf of others.
    Alex
    16th May 2016
    11:43pm
    Yes Thommo there is real hypocrisy in the response to the cuts made to the incomes of low income self funded retirees last year and the changes that will affect people at the top end of the super scale this year. Low income Self funded retirees were denigrated and called grasping by people like Ross Gittins who has considerable superannuation from his comfortable seat warming job.
    Labor voted to cut part pensions for self funded retirees on small super pensions yet they are 'grandfathering' the proposed cuts for high income people and calling them unfair.
    Some aspects of these changes probably are unfair as they appear to favour those who have high incomes all their lives over those who accumulate saving only towards the end of their working lives.
    It has never been more evident that people on modest incomes have no effective voice other than a vote in an election. Lets use that vote as effectively as we can. People who are not retired such as the people who run this web site have no idea of what it is like for seniors and have repeatedly shown they could not care less. They think they will either be able to work forever or be very well off in retirement.
    Like you Captain I have not been affected by the changes so far but I can see the problems and insecurity they have caused those who are and I feel it is most important to voice our outrage about them. They leave people who were adequately provided for unable to cover their basic needs.
    thommo
    17th May 2016
    8:38am
    To the Captain.. that was a typo... I meant 'several thousand" retirees, and I agree with you..

    And to Alex.. thank you for your support..
    Anonymous
    21st May 2016
    8:14am
    Thank goodness, Alex, for someone fair-minded standing up for people who were dealt a cruel and unfair hand in the previous budget.

    It disgusts me to see the privileged slagging those with much less and demanding it be taken from them, while screaming ''unfair'' when they are asked to make a much lesser sacrifice.

    Part-pensioners are being deprived of the benefit of years of sacrificing lifestyle to try to be as self-sufficient as possible. But worse, taxpayers are burdened because the system now punishes anyone who isn't wealthy but tries hard to save, so people will give up and many more will put their hands out for pensions. As the impact of the stupid taper rate change is felt, there will be more pressure to reduce pensions and ALL retirees will suffer.

    Any retiree with a brain should be screaming loudly UNFAIR UNFAIR and DEMANDING the taper rate change be reversed and the system completely overhauled to make it fairer and more sustainable.

    But of course the ''I'm okay Jack, bugger you'' selfish brigade will only ever scream when someone suggests taking just a little bit away from them.
    Dotty
    16th May 2016
    2:54pm
    I have always been of the belief that you have already paid tax on this amount before it goes into your Super ! and now they are saying to pay more !!
    So is the case and if so ! I don't see why anyone should have to pay more Tax on it! Maybe on the Interest it acrues afterwards ! But not on the Whole amout as that amounts to double tax !!
    Dotty
    Retired Knowall
    16th May 2016
    4:55pm
    You won't pay TAX on the amount in your Pension Super Account, only the earnings on the amount over the Limit, at this stage proposed to be $1.6M.
    e.g. if you have $2M in your Pension Account the earnings generated by $1.6M would be Tax Free, with the earnings generated by the remaining $400K taxed at 15%.
    If your $2M account earned 5% growth, that would amount to $100K.
    $80K of that would be Tax Free and the remaining $20K (generated by the $400K over the $1.6M) would be taxed at the rate I believe is being touted at 15%, which would be the princely sum of $3K.
    Still a pretty good deal.....Bring it on.
    Bonny
    16th May 2016
    7:26pm
    Retired Knowall unfortunately it isn't that simple. I've had discussions with various bean counters and most think it will be a lot more complicated in practice. Some bean counters feel LNP's super proposal is even unworkable in practice. One super expert called it a real doozy. Rather than go into detail I suggest we wait and see the detail if it comes into law. Labor's policy also has it's problems due to the ATO and APRA differences in administrating super. That why Labor's $100,000 policy was thrown out by the LNP.

    I think we are going to see a lot of changes and will probably end up with a hybrid of both the LNP and Labor policies.
    Retired Knowall
    17th May 2016
    7:19am
    Bonny this is just a proposal from both parties. My example was just an illustration of LNP policy if it becomes fact.
    The main point now is that whichever party gets in, Super Income will be taxed by some amount, but both proposals are minimal and will only effect those with sizeable account balances.
    The net effect will be a migration of capital from the accounts of High Super Accounts.
    Anonymous
    21st May 2016
    8:15am
    Unlike the assets test changes, Retired Knowall, which persecute people with fairly low account balances given that they might need to last another 3 decades or more, and which very unfairly hurt the least advantaged most.
    Not Senile Yet!
    16th May 2016
    10:28pm
    Backdating any legislation for any reason should never be allowed....do not care for the arguments presented here and by our Party puppets!
    It is not complicated....as stated.....it is quite simple!
    No one can second guess or plan for backdated legislation....No one can be prepared for it!
    It is another way to legally rob someone by the fact that they will never Know what hit them!
    As for Taxing Super and the interest it earns...that was never the original Plan!
    It was supposed to be Tax free so that it could accumulates faster....but the Governments simply got too greedy.....and saw it as a easy taxation income!
    They should have left it as Tax Free until it hit 1 Million then started taxing income earned after that at 15%.....but No....they want it all taxed!!!
    They have killed it as a way to save for retirement!
    The ONLY reason there is still money going in is because it is compulsory...if it wasn't....the Majority would now pull out of it!!! WHY you ask????
    Because they keep fiddling with it and all the changes are in the Governments Favour...not the Investor!!! Now they are in total control of other people's money to the point of making rules about when you can or cannot access it and How!!!!
    Our Governments...yes Both Parties....have completely butchered a good idea!
    Retired Knowall
    17th May 2016
    4:58pm
    The LNP proposal is to tax the INCOME earned by and account by the amount that is over $1.6M. So if you have $2M in your account, the interest earned by the $400K ($2M - $1.6K) would be taxed at the proposed rate of 15%.
    Do think that's excessive? I don't, there are many low income families struggling week to week that will never reach a super balance anywhere near the limit.
    Anonymous
    21st May 2016
    8:06am
    I think it's too generous, Retired Knowall, considering that they attacked part pensioners earning only maybe $12,000 a year and forced them to drain their meagre savings to live.
    Essdubbya
    17th May 2016
    12:47am
    Just another tax by stealth
    ex PS
    19th May 2016
    12:47pm
    I think it is time we were all realistic about taxes. Of course we will always pay taxes, no taxes no government supplied services, it's a pretty simple concept,
    It is time for political party's to be honest and tell us the truth, I am no longer interested in listening to snake oil salesmen telling me that I will receive a tax cut because the government is going to take money from someone else in order to provide it. This is because I'm pretty sure that come next election I will be taxed more so that the government can provide a tax cut for the person who was effected last election.
    I don't mind paying tax as long as I am told what it is for during the election campaign, that way I can show that I agree or not agree at the ballot box.
    As far as Super and Pensions are concerned I would like to see a retired person able to take out the equivalent of average wage before paying tax, anything over that should be taxed at the lowest tax rate. This would capture taxes from those who obviously don't really need tax concessions. Any one who is able to take out the maximum amount would not need or get a part or full pension. The family home would not be taken into account as an asset or when determining qualification for the pension.
    Overall unless changes are forecast during an election period, unless there is a genuine national emergency they should not be allowed.
    Anonymous
    21st May 2016
    8:05am
    I agree that anyone with more than the average wage should be taxed in retirement, exPS. But the assets test has to be scrapped also and replaced with a sensible deemed income test. It's patently unfair to tax people on their savings. These are often savings from income that was already taxed, acquired through lifestyle sacrifice, and it's patently unfair to punish battlers for saving for retirement.

    As to the family home, I think it should be included in assets for the purpose of deeming, but the threshold should be high enough to allow someone to have a comfortable home without suffering loss. For those with high non-returning assets, offer a concessional loan repayable from the estate. It's patently unfair to be depriving someone who has a $200,000 home and $850,000 in savings while rewarding someone who sinks $3 million into a house and keeps $300,000 in other assets just so they can get a pension.

    The simple solution is to set a threshold of maybe $1.25 million ($1 million isn't much to have to last up to 3 decades of zero income - contrary to the nonsense some idiots rant on with!) and above that apply a 5% deeming rate and tax and means test the higher of actual or deemed income. Those with expensive houses can downsize if they wish, or draw a pension knowing it will have to be repaid from their estate. That's fair. Why should the not-so-fortunate suffer while the rich pass on lavish mansions to their offspring?
    ex PS
    21st May 2016
    1:58pm
    Rainey, we have often had a diference of opinion over assessing the family home when it comes to pension eligability. In most other areas we seem to be in a general state of sympatico.
    My main area of concern with the assesment of a family home is that some homes are unfairley inflated by market influences outside the control of the home owner.
    I can see your point of view, and in some cases agree, but to be fair, would it not be more appropriate to asses the faily home at the price paid rather than current market values?
    This would protect those who have lived in the family ome for decades and have come adrift due to yupie developement carried out around them.

    21st May 2016
    9:26am
    What is reassuring here is that most of the comments reflect a sense of fairness. Only a few are displaying double standards and gross self-interest. But clearly the government has double standards. When it comes to the well-to-do, $1.6 million is a fair threshold to start taxing people a little more. When it comes to battlers who saved, less than a third of that is ''wealthy'' and it's fair to attack living standards. Sad to see that so many of the privileged support that double standard - but then, selfishness and greed blind people to reality and common sense.


    Join YOURLifeChoices, it’s free

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