Budget 2016/17: super tax concession cuts confirmed

Tax changes will be the cornerstone of Budget 2016/17.

Men pulling at budget comment

Confirming what we already suspected, tax changes will be the cornerstone of Budget 2016/17, with reduced superannuation tax concessions for the wealthy the big issue.

Without revealing the details of how superannuation tax concessions will change, Treasurer Scott Morrison yesterday said, "We'll be ensuring that we better target the concessions that are there in superannuation, we've said that for some time. 

"I don't think there's any great secret about that, the details of those things we'll deal with on Tuesday night.

"But it's important that we get these incentives right because superannuation is so important for Australians and for their future and we need to make sure that those concessions are well targeted."

With negative gearing changes and an increase to GST already ruled out, targeting tax concessions on superannuation is one of the few remaining mechanisms for balancing the budget.

And while the wealthy may take a hit on their superannuation concessions, those earning over $80,000 are expected to see a reduction in the rate of income tax they pay. An increase to the level of income at which the second highest-tax bracket kicks-in looks to be on the cards.

Businesses could also see some relief with the company tax rate under review, although any changes are expected to be over the long term.

Speaking to Sky News yesterday, Prime Minister Malcolm Turnbull said that the budget would be a “fiscally important document” that would form “a new agenda” to take to the election.

"This is not Tony Abbott's plan, this is the plan of the Turnbull Government," Mr Turnbull said.

"It is a plan to ensure jobs and growth and a sustainable tax system, and the restoration of the budget to balance, bringing those deficits down in a managed and measured way so that we … live within our means."

And it looks as though any changes to the GST are off the cards for the next few years if the Coalition Government is re-elected, with Mr Turnbull promising it would remain untouched in the next parliamentary term.

Read more at ABC.net.au 

Opinion: Is budget night now just theatre?

Tomorrow I’ll head to Canberra to hear firsthand the Treasurer’s plans for the fiscal future of the nation. However, as most of the details of the Budget 2016/17 have already been released, is there any need for all the pomp and circumstance that surrounds the announcement?

We’re heading for an election that we know, so perhaps we should expect any proposed changes to be made under Budget 2016/17 to be ‘leaked’ so that public opinion can be gauged before anything is set in stone. Learning from the mistakes of the Joe Hockey/Tony Abbott budget of 2014, where the Age Pension was to undergo a planned massacre, and in common with the 2015 Budget, the major policies of this year’s are already known.

Of course, the devil is in the detail. Thanks to pre-budget spruiking, the announcement in Budget 2015/16 that the thresholds and taper rate applied to the asset test for the Age Pension would change came as no shock thanks to pre-budget spruiking. However, the extent to which people’s Age Pensions would be affected took many by surprise.

And this year, having gauged that there is little appetite amongst the wealthy for negative gearing changes and that the public is not open to an increase in GST, the Government has set it’s sights on changes to superannuation.

The calculations have been made, the papers are written and just about every economic expert has modelled the likely scenarios we can expect to see. So why not just tell us what the changes will be?

By 1.30pm tomorrow I will know the details, but thanks to an embargo, nothing can be released to the public until Mr Morrison takes to his feet in Parliament at 7.30pm and delivers his Budget 2016/17 speech. It will possibly be the most important speech of his political career if, as we expect, an announcement of a federal election comes hot on its heels.

So perhaps this year Mr Morrison deserves his moment in the spotlight, only time will tell.

Do you wait with anticipation for the budget announcement? Or do you think you already know what is coming and how you’ll personally be affected. Do you agree with reduced superannuation tax concessions for the wealthy? Should those earning over $80,000 see their income tax cut?





    COMMENTS

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    MICK
    2nd May 2016
    10:29am
    The government has bowed under sustained pressure on the superannuation rorts for wealthy since Abbott got into office. I welcome an end to this but wait to see the details.
    On the matter of negative gearing nothing is going to change as this is milked so heavily by the rich. What should be done here is to bring in thresholds where this can be accessed. Not open slather. No amount of talk about housing collapses (BS) is going to avoid the reality is that negative gearing for the wealthy is just a subsidy from taxpayers for the rich.
    And then there are the issues of Tax Havens and multinationals who dodge tax.....with A blind eye from this government. This is where the real money is being laundered and Morrison/Turnbull will ignore it.
    The budget? An election budget with a couple of crumbs thrown to working Australians whilst the real reason there is no money for anything remains untouched. Welcome to a coalition government. GOVERNMENT BY THE RICH FOR THE RICH. What else is new.
    Tigers
    2nd May 2016
    12:21pm
    Gee you write some rubbish. How many investment properties do you, or have you owned mick? Negative gearing isn't exclusively for the rich, its for anyone that has the ability to purchase an investment property. Something that anyone with half an ounce of common sense would have done rather than pour their hard earned into superannuation. Buying your initial property is hard, subsequent properties after, is easy. Believe it or not.
    Rae
    2nd May 2016
    12:28pm
    Exactly so Tigers and far better returns than superannuation ever produced.
    Tombo
    2nd May 2016
    12:33pm
    Watch it Tigers. Anyone questioning Mick's piercing analyses automatically becomes a paid Coalition 'troll'.
    Wstaton
    2nd May 2016
    1:04pm
    It will be a typical weak kneed response to what really needs to happen.
    Polly Esther
    2nd May 2016
    1:12pm
    'vote 'independent' MICK. That'll show them. :-)
    wally
    2nd May 2016
    1:37pm
    Hi Polly. I keep waiting to see when Mick offers to stand as an independe3nt in the upcoming election. Perhaps in Wentworth ( Malcolm's seat or Tony Abbott's) to show us all how to put our money where our mouths are. But so far MICK has shown no sign of doing so. All we see is Mick accusing everyone who disagrees as being a government troll. Sort of like the pot calling the kettle black, really.
    MICK
    2nd May 2016
    3:27pm
    Come on wally. Stop acting like a wally!
    Trolls are what they are: people who refuse to debate THE FACTS and stay on a very tight script of propaganda. Get it?
    ANd for the record get Turnbull or Abbott to run in a blue ribbon Labor seat. That would be interesting.

    Tigers: you avoided to mention, or read, what I had actually written. Negative gearing has a place and achieves an outcome but THRESHOLDS need to be put in place so that negative gearing ceases to be a feeding trough for the very rich.
    If you have an investment property I congratulate you. Not envious in any way.
    Adrianus
    2nd May 2016
    3:37pm
    wally MICK has had his run and now we're paying for it.
    Oldman Roo
    2nd May 2016
    3:58pm
    Yes , Mick is 100 % correct and I can clearly get the message from the rich trying to prove him wrong by talking through the wallet . Let us accept the facts of life that only a minority of the population profit from negative gearing , and they are the rich , while the less affluent majority are paying for it .
    He also states the obvious on the superannuation cuts for the rich , which is a very small gesture in the light of the overwhelming preferential treatment they enjoy on all levels of sharing the tax burden .
    I can only see it as impressing those on lower incomes like throwing a carrot at them to keep them quiet .
    particolor
    2nd May 2016
    4:21pm
    I stand under the Old Gum Tree with You Old Man Roo !
    And I think we wont even see the last half inch of that leafy end of the Carrot :-(
    Anonymous
    2nd May 2016
    4:31pm
    Again I ask a simple question; define "rich". Swan said it was income of $180,000, Shorten says That income of $180,000 isn't a definition of "rich".

    MICK, the left leaning Grattan Institute states that housing prices for existing homes will fall, do you not believe them? Keating tried to get rid of negative gearing and had to withdraw the experiment because it sent rentals sky high. Some investors are gaming the system but the overall effect of dealing exclusively with them may have unwanted side effects that will affect those who are not as well off.
    MICK
    2nd May 2016
    7:57pm
    Old Man: removing the addict from the drug should never be cold turkey and needs to be done over a period of time lest the client dies. Negative gearing needs to have benefits gradually lowered, starting with the rich. Having income thresholds might be a sensible way to avoid shock.
    Adrianus
    2nd May 2016
    7:58pm
    The ABC 7:30 Report reckons the Plumber on $100k pa is one of the rich.
    I say people like MICK are the rich. Someone who has a Sydney harbour front home, too many assets to get the pension and a fat pension from a life as an Independent Politician. Only rich people can afford to go skiing in Colorado each year and spend 3 months in Europe.
    MICK
    2nd May 2016
    8:31pm
    If I owned a harbourside property I'd hardly be calling out the rich Frank. Brain dead comment. Straight from Liberal Party HQ.

    By the way.....the rich are getting a tax cut in the budget. Amazing how this comes up every budget with THIS GOVERNMENT. The claim is that the extra money will be ploughed into business but overseas experience says that it goes straight into the bank accounts of the receiver. But never mind Frank, if voters are conned into putting this bad bad government back into office we will all get tax increases. And the "Budget Emergency" lie Hockey ran? Yeah. Shown to be yet another LNP lie. The next one in the list! Never changes.
    Wstaton
    3rd May 2016
    11:46am
    An ongoing report determined that the only place that was found where to rentals went up was Sydney. It also found that at the time there was a severe shortage of housing there putting pressure on the rental market.

    All other states were hardly affected. Putting it back it was a knee-jerk reaction to the Sydney scenario before any facts were discovered.

    Typical cherry picking on one thing by the liberal diehards.
    GreyViper
    3rd May 2016
    1:02pm
    Do all you people who are saying that negative gearing is for the rich really understand what it means? You can negatively gear an investment for as little as $1000. If I borrow $1000 and invest it in a property trust or similar and the interest that I pay is more than the dividends/returns that I receive from the fund then I can claim the difference as a tax deduction against my other income to reduce the tax payable. That is NEGATIVE GEARING!
    You don't have to be RICH to use it. It doesn't have to be used to buy an investment property. It can be used to buy any income producing asset, shares, property trusts, etc.
    However, it is pointless doing it unless the asset is going to increase in value over time because that is what you are looking for - the capital gains. Then, when you sell the asset you will have to pay capital gains tax. The tax man gets his slice at that time.
    Also, negative gearing means you are losing money. Your outgoings exceed your returns. Far better to have an investment positively geared if you can manage it! That is what usually happens to GOOD investment properties over time, they end up becoming positively geared. Then you go and purchase another one. You don't have to be RICH!
    And WOW! Mick, you really are envious of the rich, aren't you? Are you just filthy that you missed out on all these "rorts" because you didn't save enough money when you were younger? It's sad to see someone so bitter and narrow minded when it comes to issues involving money. I await the "LNP stooge" response.
    Patriot
    2nd May 2016
    10:30am
    Theatre & "Blatant Lies"!!!
    And all that "Just to keep their HEAD in the TROUGH".
    tisme
    2nd May 2016
    10:35am
    carers wont benefit but then we dont legally exist
    Lippy
    2nd May 2016
    10:50am
    So true, if they paid carers the minimum rate for caring 24/7 they would be paying us $135,000 year. They give a bonus of $600 a year which it pathetic : (
    Tigers
    2nd May 2016
    12:22pm
    So you believe you should be paid $135,000 to care for a loved one??? Whow, what a greedy society we've become.
    Fliss
    2nd May 2016
    2:51pm
    agree Tigers. That about sums up our society. Want to be paid for everything! In fact, overpaid. Sad really. :(
    MICK
    2nd May 2016
    3:29pm
    Tiger and Fliss: are you both intentionally misrepresenting what posters are actually saying. Strike 2 for you today Tigers.
    Anonymous
    2nd May 2016
    4:33pm
    What a nasty society we've become, when people accuse someone of ''greed'' for making a perfectly legitimate statement that carers are being treated shabbily.

    If you had ever had to give up your life AND you income to care for a loved one, you would not be so callous, Lippy and Tigers.

    Nobody is asking for $135,000 a year to care for a loved one. Only noting that that's how much carers are SAVING the community by sacrificing their lives and incomes and dedicating themselves to the most difficult job in the world, working 24/7 without respite and with very little appreciation generally.
    Wstaton
    3rd May 2016
    11:53am
    Just reinforces the thought processes of the liberal diehards apart from the fact they cannot even understand what people are actually saying.

    Noticed they got of replying to comments on this pretty fast.
    LiveItUp
    2nd May 2016
    11:12am
    Sounds like a budget for an election.
    Anonymous
    2nd May 2016
    12:29pm
    It's called ''vote buying''. But can we believe anything they say? The LNP has done nothing but lie to the electorate.
    LiveItUp
    2nd May 2016
    12:42pm
    Ha ha and you think Labor will be any better?

    Remember they stab each other in the back as well.
    MICK
    2nd May 2016
    3:31pm
    Agree Rainey. It is vote buying. But the sting in the tail comes after the election if this crew were to win (they won't). It will be Abbott post election all over again. First cab off the rank: increase in taxes for working Australians and removal of working conditions.

    Bonny: you are sounding like Tony Abbott...before Turnbull knifed him. Selective memory? Or trolling services?
    Biddy
    2nd May 2016
    11:47am
    This Government will do what it wishes so for budget surprises there will be none,they have lied their way into Government and put Malcolm Turnbull as leader stating he would change their policies and so far nothing is any different ,he stil does what Tony Abbott did and blames the labor party for all their mistakes,this negative gearing is only for the rich and famous any way,Malcolm Turnbull doesn't wish for it to change because he can afford to do just this,ok if you own 5 homes like he does,most people struggle to own one home but it is greed that drives this kind of investing not for every day of the run families ,this is what I believe ,if they tacked taxes on big business and made the taxes fairer perhaps this would be a better idea but as usual they protect these big companies and hit the pensioners and the unemployed and the vulnerable which is so unfair,nothing that they do will make this right they have lost the plot completely forgot
    KSS
    2nd May 2016
    12:34pm
    Biddy your green eyed monster is showing here. Mr Turnbull had a very modest start in life mainly brought up by his Father after his mother walked out. He hardly had the silver spoon upbringing many assume. He has worked hard and done well, started, grew and sold businesses and along the way made his fortune. His current home in the Eastern Suburbs in Sydney was bought long before he entered parliament. His owning several properties (including I might add a commercial property) is NOT the reason others cannot/will not/do not buy their own house. The fact that he has a property portfolio as part of his investment strategy is not and should not be anyone's business but his. Unless of course you are alleging he has acted in a criminal manner in which case please post your evidence for us all to see.

    Making personal attacks on someone simply because they have more than you makes no sense to me. There will always be those better or worse off than you so making comparisons is fruitless and frankly churlish.
    Wstaton
    2nd May 2016
    1:16pm
    When anyone attacks the rorts of the rich they become a green eyed monster.

    Lets forget about the paying of very little tax by conglomerates by shoving everything into low tax environments, Lets forget about whats being revealed by the Panama papers lets forget about all the rorts being perpetuated by a lot of the rich.

    If M. Turnbull is really clean making himself rich he should be the first person who wants to stop all the above. But no it seems that he wants to promote a lower company tax probably end up going a lot of the companies doing the above.

    So what are we to do! Just keep protesting and being a green eyed monster I suppose.
    Anonymous
    2nd May 2016
    1:27pm
    Turnbull had a modest start in life!!! What utter CRAP, KSS.

    He INHERITED a Sydney flat and a prime 800 ha rural property in Scone at age 27. He went to one of the most elite schools in the country.

    If that's a ''modest'' start in life, I'd hate to see what you describe as ''privileged''.
    Adrianus
    2nd May 2016
    2:01pm
    Trump also had to start from the bottom. He didn't have it at easy as people think. He had a small $8m loan from his dad and that's all.
    LiveItUp
    2nd May 2016
    2:14pm
    They say Trump would have been a lot better off today if he had passively invested in the SP500 and did nothing.

    2nd May 2016
    12:12pm
    Please can someone ask Mr Turnbull and Mr Morrison what is the point of helping Australians to save more for retirement when they are going to take it back on retirement through an assets means test that effectively offers 7.8% indexed to inflation for retirees to SPEND their savings quickly.

    The high taper rate makes no sense in the current low investment return environment. Unless a retiree can accumulate over about $1.3 million, or can achieve high net returns on their investments, their super and savings are useless and retirees are better off having less than about $375,000. This provides a huge incentive for retirees to reduce their assets in any way they can in order to maximize income - especially if their assets mean they miss out on pension benefits. (It should be noted that the CSHC is worth nothing compared to pension benefits. It is not accepted by councils, for car registration and licenses etc. and most medical specialists don't accept it, which means losing the pension can cost chronically ill retirees countless thousands on top of a huge pension loss.)

    The new taper rate creates a huge incentive for over-investment in the family home, driving up real estate prices and disadvantages younger Australians. It also encourages generous gifting before retirement and lavish spending. It is a powerful disincentive for younger Australians to save for retirement.

    It DOES NOT only affect ''millionaires''. People with as little as $300,000 are losing out under the new rules if they own even a very modest home. And even $1 million is NOT a lot of money to last a retiree couple through 30 years of increasing health and care costs and zero abilty to earn income. By forcing retirees to reduce their savings, they will be left with nothing to pay for expensive aged care when it is needed, and many will struggle to meet the costs of home help, disability aids, specialist medical procedures, and other ''luxuries'' they saved for but are now denied.

    Meanwhile, those lucky enough to be able to continue earning but keeping savings low can have an income of $70,000 and still get a part pension, but asset-tested retirees will be earning, in some cases, as little as HALF the aged pension. It's patently unfair, cruel, and economically foolish.
    Anonymous
    2nd May 2016
    12:16pm
    It should also be noted that the introduction left no time for those over 60 to plan around the change unless they are in a position to upgrade housing or to gift and live very frugally for 5 years. The most pain will be inflicted on those just turning 65 or just over 65 as they have a lifetime to live with the impact and no realistic options to deal with it.

    And the changes discriminate most against the most disadvantaged. They hurt the sick and disabled who have higher needs and a more precarious future, and they hurt those who were educationally disadvantaged and can't invest for high returns. They favour the privileged who are in better health and/or able to achieve high returns or supplement their investment returns with part time work.

    Heaven help anyone who got a modest accident compensation payout intended to fund disability aids and home help. They will now have to live on that money and forfeit everything it was intended to provide.
    LiveItUp
    2nd May 2016
    12:31pm
    Chronically ill people are bulk billed by most health professionals now as they get higher payments from Medicare.

    I really can't see what the problem is here with this new taper rate. You will still have a safety net once your capital is drawn down to a certain level.

    Most nursing homes give you the same bed no mater how much you are required to pay for it. You can have someone in one room that paid nothing beside another person in the next room who paid hundreds of thousands.

    Only thing I see that is different is that you will not now have as much to leave behind after you die. It won't hurt your relatives to go economy instead of first class on their Disneyland trip.

    Best of all it will save us taxpayers money that can be used for those who need it not to pay those where it is just nice to have.
    KSS
    2nd May 2016
    12:54pm
    Rainey I can't see your argument either. If people are encouraged to save for retirement and do so, then they would/should have no need for the aged pension from the Commonwealth Government. They save for their retirement, that's exactly what the money should be spent on - including the capital when the time comes.

    If they are fortunate enough to outlive their savings (oh yes some will) then they will have the 'safety net' of an aged pension as it should be. We should not be subsidising people who have enough (or even more than enough) simply because they whine about wanting to leave funds for their children/grandchildren.

    The only part I do agree with is that the new levels introduced a few months ago are too low and should not have been reduced quite so much.
    Anonymous
    2nd May 2016
    1:22pm
    Nice try, Bonny, but your propaganda is obviously a load of BS.

    1. Many chronically ill people are NOT bulk billed.

    2. The problem with the new taper rate is it PAYS YOU NOT TO SAVE. It will NOT save taxpayers money. It will COST THEM. It's got NOTHING TO DO WITH LEAVING MONEY BEHIND. It's got to do with NOT having enough to last maybe 30 years of nil earnings and increasing costs due to frailty with increasing age..

    And you are DEAD WRONG about nursing homes. They DO NOT give you the same room no matter what you pay. Different homes - with different standards of care - have different cost structures, and different rooms within homes are at different fees. My late mother was in a home and she couldn't afford the room she wanted. She could barely afford the one she had, and she HAD some reasonable savings.

    You keep distorting the argument with the same LIES the LNP tell - that it's about inheritance. It IS NOT. And that it will save the nation money. IT WILL NOT. It will drive pension costs up, and anyone with a brain can see that at a glance.

    Offer someone who is getting 3 - 5% return on their money 7.8% + extra benefits, indexed to inflation, to REDUCE their savings, and they are NOT GOING TO SAVE MORE.

    Blind Freddy can see that the proposal is completely idiotic, and only a dunce would try to condone it.
    Anonymous
    2nd May 2016
    1:51pm
    KSS, why would people save for retirement when it yields ZERO benefit?

    Do you seriously think people are going to sacrifice holidays and restaurant dinners and nice clothes etc. to save when it results in a LOWER income in retirement? Many I know are putting it under the bed, actually, because they get 3% in the bank and 7.8% under the bed!

    We are NOT subsidizing people who have more than enough through pensions to asset-tested retirees. We ARE subsidizing high income earners (through crazy tax concessions, capital gains concessions and negative gearing), paying welfare to the well-to-do in child care rebates and parental leave, charging no tax to rich retirees... on and on it goes. But the people who were slugged with the taper rate change have as little, in some cases, as $350,000 and a very modest home (long way from millionaire) and even at the top end many haven't a hope of achieving an income anywhere near the pension level, plus they lose countless thousands in benefits.

    Consider this for unfairness (a real life scenario!). Joe and Jack want to take their wives for a once-in-a-lifetime holiday. They both saved for years to do that. Jack goes when he's 64 and comes back to claim a full pension. Joe stays home until age 74 because he and his wife are caring for their aged mother. They are stripped of pension benefits for 9 years for making that sacrifice.

    Another case: Fred got a $450,000 (net) compo payout because he was crippled in an accident. His lawyer calculated costs for home help, lawn mowing, disability aids, and medical needs. He now loses his pension in 2017 and can't afford ANY of those necessities or he'll run out of money fast and have to get by on the pension, with no money for those needed extras.

    These are just a couple of examples of the gross unfairness of the system. There are tens of thousands more.

    Remember that many affected never had super. They are being attacked for daring to go without lifestyle to save for later. Now, later will never come! They have gone without for the benefit of those who didn't.
    LiveItUp
    2nd May 2016
    2:20pm
    Not buying either of those scenarios Mick. Scenario 1 either it was a very expensive trip or the second couple lived on very little for 9 years. Scenario 2 $450,000 will still get him the age pension.

    Neither to me show any signs of gross unfairness unless it is unfair that they no longer have their nice to have extras.
    Anonymous
    2nd May 2016
    3:51pm
    Mick, Bonny is suffering a common psychological condition that arises from being shown to be wrong, but having a desperate need to somehow prove falsehoods to be true. Frustration at being unable to counter FACTS with anything other than false claims about irrelevant matters turns to total confusion over time. Symptoms are similar to those produced by excess alcohol or drug consumption.

    Bonny, again you prove your ignorance! I didn't say how much Joe was stripped of - only that he lost out by delaying his spending. And anyone who delays spending does lose under this new excessive taper rate. As for Scenario 2, I didn't say Joe had no other assets than the compo, but $450,000 will NOT get a single pensioner a full pension. In fact, he'd get very little if he owns even a shack in the bush that can be called a ''home''.
    Anonymous
    2nd May 2016
    3:57pm
    Look, folks, Bonny has clarified what she classes as ''nice to have extras''. Disability aids, medical care and home help for a cripple come into that category, and she's quite happy to deprive cripples of those ''extras'' in order to retain big negative gearing tax concessions and other rorts for he rich.
    LiveItUp
    2nd May 2016
    4:45pm
    Yes agree pensioners with no money may have trouble getting some of those aids etc you mention but those with assets will not have any trouble affording them.

    Labor's negative gearing plan is the plan that favour the rich and makes it difficult for the ordinary person. At least the current one allows our young kids a way of getting into the property market.

    Anyone can access any of what you call "rorts of the rich". I know how most of them work myself.

    Neither of your two scenarios are unfair in that they have access to more money to pay for them than a lot of other pensioners.
    Anonymous
    2nd May 2016
    4:51pm
    You are either sick or a total fool, Bonny. You just won't recognize that if someone has to spend money that was set aside for essential disability aids to live, they are going to be cruelly and unfairly disadvantaged.

    He won't HAVE money, so he WON'T HAVE HOSE AIDS. Because greedy, self-serving, nasty people want people like him cheated out of the benefit of his compensation payment, and savers cheated out of the benefit of their saving, while the rich keep rorting the system unconscionably. It's obvious where you fall in the social structure, Bonny. Poverty my backside! Super-privileged and incredibly selfish and without an ounce of basic decency, let alone empathy or respect for others.
    Anonymous
    2nd May 2016
    4:53pm
    Bonny, how the hell is it FAIR for someone who went without a great deal to save for the future NOT to have more money than someone who didn't. Apparently you subscribe to communism. So why aren't you giving everything YOU have to the poor pensioners?
    Retired Knowall
    3rd May 2016
    7:04am
    Life is not fair, it is what it is so make the most of it.
    This situation is only going to get worse as the Boomers retire and the Govt. battles with their Debt Time Bomb.
    LiveItUp
    3rd May 2016
    11:58am
    Nothing in life is fair Rainey. So a pensioners that is disadvantaged by the new 2017 asset test is poor? Tell that to the young couple trying to make ends meet each week with just one disaster tipping them in bankruptcy. I'd rather support that young couple than these poor pensioners.

    That government time bomb worries me too in that with all debts it has to be paid back with interest and we aren't even making the interest payments.

    Interesting how I became a self made self managed retiree being sick and a total fool. I certainly haven't gone without to save for my future and I don't expect others to do so either.

    I know what it costs for disability aids and I also know that if you can swallow your pride second hands ones are available at a fraction of the cost of new ones.
    Anonymous
    7th May 2016
    8:21am
    Oh, so because ''nothing in life is fair'', battlers who saved all their lives should be deprived of the benefits and people who didn't bother to save should be given a secure income and a host of extras? That makes a lot of sense from the perspective of a Treasurer who is trying to cut the pension outlay, Bonny. NOT!

    Only someone with a brain freeze would decide it was better to punish everyone who tries to be self-sufficient and reward anyone who makes no effort!

    Yes, SOME pensionsers disadvantaged by the 2017 assets test ARE poor. If they have no income earning capacity, another 3 decades maybe to live, and only a few hundred thousand in savings, they ARE poor- a hell of a lot poorer than young families who have opportunities for continually rising incomes and an inheritance down the track maybe.

    Unlike you, I DO care about the future of younger Australians. It's the next generation that will suffer for the utter stupidity of this government, blowing pension costs sky high by rewarding people to STOP saving for their future, denying younger Aussies any prospect of inheriting a little because their parents were rewarded for blowing their life savings (or else just forced to live off them until there's nothing left).

    As to the illogical argument that people shouldn't be paid a pension so that they can leave something to their kids... well, that makes no sense when you pay pensions to people for gambling, drinking, partying, cruising the world, gifting (5 years before pension age) and investing in mansions. It's a STUPID ILLOGICAL ARGUMENT that attempts to justify the unjustifiable.

    I have no issue with people who can afford to support themselves being required to do so. It's about assessing who can afford what correctly. A 65-year old with $500,000 isn't a fraction as rich as a 95-year-old with the same savings. Someone who can earn $60,000 a year ongoing is much richer with $300,000 than someone who can't earn is with $850,000. Someone whose education enables them to earn high investment returns is much richer with $500,000 than someone underprivileged who can only earn 4% or 5% is with $800,000. A disabled retiree needing home help and special care is poorer with $800,000 in savings than a healthy retiree who can DIY is with $500,000.

    ASSETS DO NOT DETERMINE CAPACITY TO SUPPORT ONESELF.

    Tax income in retirement, by all means. Means test income. Deem income from assets where it's fair to do so - at fair rates. But ''taxing'' income (and reduction of pension entitlements is a form of default taxing) at a rate far higher than the income is not consistent with any premise Australians have subscribed to in the past,discrimates against the less advantaged in a cruel and unfair manner, is economically damaging, and will drive more retirees into poverty over time.
    Rae
    2nd May 2016
    12:27pm
    AS far as I can see the 25% of the population earning over the mean of $55000 a year are the wealthy. So giving then tax breaks after taking from the other 75% seems silly as I doubt they will help the economy one little bit and the majority will have to cut spending which will cost growth and jobs.

    Also it doesn't matter what changes they make to superannuation this year as it is already a broken tax minimisation strategy when other strategies are less risky and more rewarding.
    Anonymous
    2nd May 2016
    12:31pm
    Rae, what's the point of helping people save more in super when they then punish them in retirement for having saved? Makes no sense!
    KSS
    2nd May 2016
    12:41pm
    Rae if you think that those earning $55,000 are the 'wealthy' then single pensioners receiving $22712 and couples receiving $34252 are positively well off!
    LiveItUp
    2nd May 2016
    2:21pm
    If the pension keeps going up them pensioners will be soon wealthy too.
    MICK
    2nd May 2016
    3:45pm
    Respectfully Rae $55,000 pa is the breadline. "Wealthy" is more like over $180,000. A salary of this level is really where you 'start' to talk about being wealthy and there are shades of grey in that, depending on whether or not you have a razoo to your name.
    I may hound the rich but people do deserve a fair go and one does have to be careful where that line in the sand is put. As long as government benefits start to fade out long before that level of income and those who earn this level of money do not cheat the tax system I for one congratulate them on achieving what most of us can only ever dream about. It is the realisation of the great Australian dream....and as long as it is honestly achieved these people are to be commended. I for one do.
    FM
    2nd May 2016
    12:31pm
    I am sure there will not be anything to help retirees in the Budget. It is 60 days to the election and we should use that time as Rainey and Alex suggested to focus on advocating for things we want or want reversed from last years brutal budget such as the taper rate, as Rainey is doing. Labor have said they considered the increase in taper rate too drastic and were open to reversing it. A number of Independents did not support it. Perhaps we can seek statements from our local politicians and representatives of the Political parties on where they stand. Let them know we are serious.
    LiveItUp
    2nd May 2016
    12:50pm
    Good idea I'll write the them about the taper rate and including the house in the assets test.
    Gra
    2nd May 2016
    2:44pm
    Here goes Bonny (or is it Bronny) about including the house in the assets test. Bronny is all for it because she doesn't own a home.
    LiveItUp
    2nd May 2016
    3:03pm
    Off house hunting so I can qualify for the pension.
    LiveItUp
    2nd May 2016
    4:19pm
    Throw them out then Mick and let's hope you haven't jumped out of the frying pan into the fire. It really doesn't matter to me financially who is in power.

    If you think that a change of government is going to change the new asset taper rate from 2017 think again. It would not surprise me to see further tightening in the pension system as the number of pensioners increase.
    MICK
    2nd May 2016
    8:40pm
    A government which extracts tax from multinationals and the rich will indeed be able to not use retirees as scapegoats. And then there are the offshore Tax Havens for the rich...........
    Alsa dear Bonny I knew you well........
    Wstaton
    3rd May 2016
    12:01pm
    Mick, I think we should ignore Bonney. I think she is just running interference. To create as much crap here that people end up spending a lot of time refuting. I have noticed over time that her comments are mainly frivolous creating a lot of background noise to cause people to waste time.
    FM
    2nd May 2016
    12:47pm
    Bonny you are peddling rubbish. Specialists do not bulk bill. There are large out of pocket costs for surgical procedures. There are often huge differences between what is paid for medical care and what is reimbursed. It is a case of your money of your life for many illnesses. The rich can live and the poor can die. As for nursing home accommodation people without means can be sent to a nursing home or aged care facility far away from their local area. They do not have a choice. The quality of accommodation provided is basic in comparison to what people with means can buy. People on the pension in nursing homes often cannot afford non prescription medication on the amount of money left over after the daily charge. I know it is a waste of time replying to your posts. There is lots more nonsense where that came from.
    LiveItUp
    2nd May 2016
    12:56pm
    Not too sure where you are getting your information about specialists not bulk billing chronically ill people as all my specialists bulk bill me.

    I regularly visit a 5 star nursing home and that is what happens in that particular nursing home. I've also heard that it is not much different in many others.

    There iare lots of misinformation on the grape vine these days which should be taken with a grain of salt.
    KSS
    2nd May 2016
    1:00pm
    FM specialists can and do bulk bill, but I grant you not many do.

    If surgery is done through the public system there are NO out of pocket expenses at all.

    The funding of aged care places has changed recently and gaining a place in a suitable facility has more to do with places than geography. There are just not enough beds for the numbers of Australians who need them given we have an ageing population, this demand will only grow.

    I am also interested in the non-prescription medication you mention. What is that?
    Anonymous
    2nd May 2016
    1:41pm
    The MISINFORMATION, Bonny, is the BS you peddle. It's ALL WRONG. And I note it's ALWAYS based on YOUR claimed experience. Never FACT. Never logic. Never mathematics. Never research or expert viewpoint. Always just rubbish spat out by Bonny, and quite knowingly untruthful because you've been corrected so many times that you can't claim to not know you are wrong.

    NONE of my information comes from a ''grape vine''. It comes from extensive research, consultation with economists, financial advisers and accountants, and mathematical computations using proven inputs. The only thing I get from my grape vine is sweet juicy grapes.
    Adrianus
    2nd May 2016
    2:07pm
    Rainey, I don't blame you at all for sacking your "actuarian's" after they gave you that $1.28 calculation.
    You are right Bonny, some specialists will bulk bill.
    Anonymous
    2nd May 2016
    2:55pm
    Rainey you appear to be not a nice person your whole aim in life seems to be to rubbish people and write a whole lot of crapp and BS as you call it on this web sight
    Anonymous
    2nd May 2016
    3:41pm
    And that from someone who called me a ''bludger'', Robbo, and I note no apology when you were corrected.

    NO, my aim is to educate people so that we have productive changes to legislation that help the economy. Reports today confirm that our major problem is falling demand. You don't help that by frightening retirees out of spending, nor by encouraging overseas spending or spending on expensive housing. The people who were savagely, and very unfairly, attacked with the taper rate are the retirees who were spending locally on a regular basis.

    And yes, Frank, SOME specialists will bulk bill. Most won't. Again, we have people being disadvantaged on the basis of irrelevant anecdotal claims, with no consideration of the facts.
    LiveItUp
    2nd May 2016
    3:58pm
    Rainey I think most of your arguments are wrong. What is wrong with people spending their money to live on? Those of us above the current asset cut off limits do. All that has changed is that more people will have to do the same and that will save the government money.

    If they spend it on expensive holidays or upgrading their houses then they are just playing by the rules. If they hide it under their beds then they have a security problem. I have no problem with that under the current rules. It's their money so as long as they spend it on themselves they are within the rules.

    I doubt if it will frighten retirees out of spending in fact if what you say about it being better to spend it then that will help the economy.

    We have falling demand in our economy because we have uncertainty about who will be in government, interest rates and high housing costs. In other words people are worried about the future and so keep their wallets closed.
    MICK
    2nd May 2016
    4:12pm
    And just out of interest Bonny yours are exactly the same as Morrison? Thought so. Funny that.
    Anonymous
    2nd May 2016
    4:25pm
    Bonny, IF the government was saving money by changing the taper rate, I'd support the idea. IF it was FAIR, I'd endorse it.

    The problem is that it is grossly UNFAIR and destructive. It CAN'T save money because the math doesn't work. Only a fool creates an environment that rewards irresponsible conduct and discourages the very behaviour the government declares is NEEDED to pull us out of economic malaise.

    We have falling demand because of falling confidence. When you strip retirees of income, confidence falls. Retirees are terrified of what comes next. Of course their wallets are closed. Young folk see retirees having to battle on incomes LESS than the pension, after a lifetime of saving, and they are going to get very scared also.

    I support 100% revising the pension system so it's FAIR AND EQITABLE and prioritizes NEED. But that means addressing issues of age, frailty, disability, and other causes of special need. It means allowing people to benefit from honesty and endeavour and from past frugal living and saving.

    The taper rate change attacks the most vulnerable of those who saved - all those who anticipated high costs in old age, possibly because of health issues or deprivation in early life - who can't earn high investment returns. The privileged educated and financially savvy are okay. Those who are healthy and fit will get by, especially if they can earn a bit through part time or casual work. The people who get hurt are those in poor health, with high costs for special care and home help, and without the education to be able to attain high returns. Many I know have trust issues because of abuse and neglect in government institutions in early life. And it's grossly unfair, because it takes more than 100% of earnings, while those lucky enough to be able to keep working to earn lose only 50%.

    What I want to see is a total overhaul of the system to improve fairness and actually save the country money, while maintaining a reasonable living standard for retirees and encouraging and rewarding responsible planning and saving so that the next generation is better equipped to fund their own retirement. The current system is depriving the nation of the benefit of superannuation savings. Clearly, any spending it is encouraging isn't helping the economy - probably because disgruntled retirees are determined to spend overseas so that this stinking government that lied and defrauded them doesn't gain.

    This is a simple mathematical equation. You don't give someone who is earning 3 to 5% returns a 7.8%+ return for reducing their savings and expect them to keep saving. Anyone who can't see that the math doesn't work is missing brain cells!

    What the new taper rate does is force people who saved to forfeit all benefit from their saving and hand it to people who didn't, and THAT IS WRONG by any decent, moral, ethical, or reasonable standard. Only the greedy self-serving who benefit unfairly would support such a concept.

    It's your arguments that are wrong, Bonny. There's EVERYTHING wrong with someone having to spend their capital to live on when they saved it for some specific essential future purpose. And there's EVERYTHING wrong with someone spruiking that it's unfair for taxpayers to have to fund pensions for people who saved, but it's okay for taxpayers to fund pensions for people who took expensive holidays. There's EVERYTHING wrong with taxpayers funding pensions for privileged professionals who can keep earning $70,000 a year well into retirement by just working part time, while the sick, crippled and disabled chronically underprivileged is forced to drain hard won savings and go without the later-life essentials they saved for because their pension loss is many times the income their savings generate.

    You are shooting yourself in the foot with your own contradictory arguments, Bonny. At least TRY to be consistent! But you can't, because you are DEAD WRONG. And you would never want to betray your sponsors by admitting it.
    LiveItUp
    2nd May 2016
    4:28pm
    Well I got most of it from an employee of Centrelink when I was verifying some rules for a pensioner.
    Anonymous
    2nd May 2016
    4:45pm
    Well no wonder it's BS. It's government propaganda. Those idiots are TRAINED LIKE MONKEYS to spit out BS that suits the current political agenda. I haven't yet found one with a brain!
    Adrianus
    2nd May 2016
    7:47pm
    Bonny, you ask "what is wrong with people spending their money to live on"? Good heavens!!! Lawdeee, Lawdeee, Lawdeee!!! Don't you know that is not on??? The lefties only like to spend other people's money!
    Anonymous
    3rd May 2016
    10:36am
    Frank, it's not a question of people not spending their own money, or wanting to spend other people's. It's a question of saving money for the country. You don't do that by paying people to be irresponsible and dishonest and punishing the very behaviour that is needed for the economy to improve.

    If the pension system were overhauled to be fair, logical, and applicable to the current economic environment, we could save a great deal of money WITHOUT sacrificing the future by encouraging and rewarding overspending and gifting and overinvestment in housing.

    It's perfectly fine for people to spend their own money, to the extent that they don't have important spending priorities or expensive needs down the track. But some of us actually PLANNED our spending, and pulling the rug out suddenly is going to create problems that nobody is thinking much about. It's already creating gross unfairness. It's going to generate much higher reliance on the State and much more poverty in future years.

    The bottom line is that our current system is a mess. It's unfair, inefficient, unnecessarily costly, hard to administer, and offers massive disincentives to saving and striving for self-sufficiency.

    I am NOT a leftie. And I am fully in favour of those who can support themselves doing so. But I don't want the government to continue to encourage and reward dishonestly, unfairness, and economically irresponsible behaviour.
    LiveItUp
    3rd May 2016
    11:40am
    Less people on the pension is saving the country money. It is very difficult to break the habits of a lifetime so I can't see people being irresponsible with their sending just to get their assets down to get the pension back.

    I agree there are so many loop holes in the current pension system that it leaks. Centrelink are now checking the insurance companies files to find those big items that people have insured but not disclosed as assets. Buying a bigger house instead of downsizing is irrational behaviour. I even know of people replacing the bricks in their house with gold bars and painting over them.

    No matter what the rules are there will be loop holes that will require changes as people find them and they are used by many.
    Wstaton
    3rd May 2016
    12:07pm
    Certainly the rich have found these loopholes.
    Anonymous
    7th May 2016
    8:30am
    Less people on the pension NOW means more on the pension later, Bonny. It's simple math. Reduce people's capacity to be largely self-sufficient down the track and eliminate incentives to save and you have more pensioners. Only the IDIOT LNP and the STUPID supporters would argue otherwise.

    I note neither you nor the LNP support taxing high incomes in retirement. That would hurt Bonny! And that's all that matters to you. Your interest is 200% selfish.
    Rodent
    2nd May 2016
    12:50pm
    Dear All , especially Rainey because she has written about this often and also for the attention of current or future Pensioners.
    Today in the Financial Review there is an Article by Brian Toohey that is worth a read. Its on p38 and its title is ' Low Yields to undermine Morrison. Of particular note it the opening, I quote" The expected fall in yields of financial assets closer to their 100 year average will undermine the Budget Scott Morrison delivers on Tuesday. Many more retirees will soon draw a bigger part pension, or full pension than anticipated when higher yields were taken as the norm. Higher yields meant that the means test on the Age Pension reduced the pension to the retiree."

    My point- I wonder tomorrow in the Budget what the Govt will claim as the Pension Savings, for their Assets test changes will be in Dollar terms over the new 4 year period?
    I will bee looking for this.
    Also for those readers of the Melb Herald Sun they have a big article today about Welfare expenditure with a large amount of data in a table format , data source is the Tax Institute
    MICK
    2nd May 2016
    4:10pm
    Thank you Rodent. The facts are always the facts.
    MICK
    2nd May 2016
    8:44pm
    Rainey: not too sure that the top end are worried about competition per se. They just want their money. Doesn't matter how they get their hands on it as long as it is not from them. That leaves everybody else. Welcome to the Liberal Party. This government is this mechanism at work. It is quite obscene when one finally sees how the system works.
    FM
    2nd May 2016
    1:12pm
    KSS I meant medication not covered by the NHS pensioner concession. Poorly expressed. Thank you. Even with public hospital care there are generally significant costs associated with serious illness in follow up care.
    Rae
    2nd May 2016
    2:31pm
    Which will all have to be done in the hospital as the nursing homes decline to employ nursing staff. In fact if there is no nurse then I fail to see how living there would be better than a serviced room in a mantra building and take the ambulance to the hospital for every service required.
    LiveItUp
    2nd May 2016
    2:46pm
    If you are classified as chronically ill then a lot of those costs you mention as part of your care plan. It doesn't matter if you are a pensioner or not a pensioner you get the same treatment care plan. Certain drugs not normally on the PBS can also be authorised and become available to you as a chronically ill patient. Like everything else you have to learn the rules and use them to play the game so you get the best treatment available.
    Mez
    2nd May 2016
    3:19pm
    Rae....All aged care facilities employ PCA's because they are cheaper to employ and Enrolled Nurses in charge are cheaper than Registered Nurses although both are registered but the latter has a uni degree whilst EN's have diplomas but they need to be in communication with an RN for a number of reasons.
    PCA's only have a meagre 2 mths training course and are not allowed to sign for individual medications nor give injections, etc..
    Most aged care facilities are poorly resourced and staffed yet they are owned by big companies!
    Also, do not be fooled by appearances.
    Anonymous
    2nd May 2016
    4:02pm
    Bonny, I know a chronically ill man whose medication costs $280 a fortnight because it's not on the PBS. He's tried every method available to get a subsidy and there is NONE. But he is ''wealthy'', and after Jan 2017 he and his wife will have to live on $18,000 a year until these $280 a fortnight chemist bills (actually they are much more than that, because he's on other medications as well) drain nearly all their life savings.

    Of course medicine for the chronically ill would be another of those ''nice to have extras'', yeah?
    LiveItUp
    2nd May 2016
    4:10pm
    I can't see a problem as he can use his capital as well as his income to live on. One can still have quite a bit of money and get the full pension even after January 2017.
    LiveItUp
    2nd May 2016
    4:23pm
    So you prefer to not spend it and have your children squabble over it after you have gone. Yes most families have a big squabble over the estate and then never talk to one another again.

    Sounds like a plan to me.
    Anonymous
    2nd May 2016
    4:44pm
    Mick, the elitists of this world are terrified of working and middle class Australians moving up the lifestyle ladder a little. They want a feudal society, where the poor slave their guts out for stale bread and water and are at the mercy of the privileged. Goodness, we can't have the children of battlers inheriting enough to pay off their mortgage before retirement, or to help their kids through university, or provide essential costly medical care for sick family members. That would mess up the social structure completely.

    Bonny, you really are cruel! No problem because a cripple can use his capital to live on? And when it runs out - and it will quickly - what does he then use to pay for disability aids? The pension? It's not enough to live on, let alone to pay for those expensive extras that he NEEDS and that he was granted money that was INTENDED to allow him to have.

    What sort of heartless, self-serving person are you?

    Sure, one can get a full pension with a piddling few hundred grand in the bank, and in 15 - 20 years what will that piddling sum buy? NOTHING.

    If they geared the assets test to age, that MIGHT make it acceptable. But younger retirees are going to be VERY VERY POOR in 20 or 30 years after being forced to reduce their savings so pathetically low.
    Anonymous
    3rd May 2016
    7:33am
    Wrong on what, Bonny? You mean you won't ''spend the kids inheritance''. You DO want to leave something to your kids? But being an elitist, you want to make damned sure others are not able to do the same. Got to conserve the elite privileged advantage, eh?
    LiveItUp
    3rd May 2016
    11:27am
    If there is anything left then my kids will get it. However I will not go without just to leave them an inheritance. That said I have already bought them houses to live in.
    Wstaton
    3rd May 2016
    12:15pm
    Just as I said Bonny is just running interference. She has not only bought one house for her kids but "HOUSES" Am I mistaken but didn't you say you were on the pension. If you say not why are you visiting Centerlink.
    Anonymous
    7th May 2016
    8:24am
    Bonny claims to live below the poverty line and to have been disadvantaged, yet she buys her kids houses!!!!

    Obviously a silver-tail who has no idea what life is like in the real world. No wonder she supports disgusting Neoliberal thinking!
    Anonymous
    7th May 2016
    8:33am
    Bonny is typical of the rich with their double standards. Milk the system for all it's worth dodging tax wherever possible, and then scream blue murder when someone who didn't have those opportunities gets a little help at the end of their life. Sick!
    Dollars over Respect?
    2nd May 2016
    2:07pm
    I suggest that negative gearing should be restricted to one investment property only and that it should be as part of a superannuation plan (for the purpose of spreading risk and setting up a future income stream) and it should not be applicable for shares outside of a superannuation fund. Such a change would result in our young people/families being able to afford to buy their first home, as it would remove the marketplace competition from the wealthy. People with enough wealth to buy additional properties should not expect less wealthy, hardworking taxpayers (in particular those who are struggling to buy their family a home) to fund such ridiculous concessions - which is the current situation.
    Wstaton
    2nd May 2016
    2:32pm
    I find it unconscionable that negative gearing should apply on shares or on anything speculative. In the main I find speculating in shares is a bit like gambling. Gambling is a risk, gambling on shares going up is a risk.

    What this is doing is making the taxpayer pay for part of the risk.

    I am all for helping a "business" to grow and profit even if maybe a risk as businesses provide jobs. What does speculating on shares do?

    So why should we pay for part of the risk that is a gamble that shares may go up.
    LiveItUp
    2nd May 2016
    2:39pm
    Buying shares is buying a business. You borrow to buy businesses so what's different about borrowing to buy shares? You can deduct your interest off your business income so why can't you deduct your interest of your dividends (business income).

    To me money in a term deposit is very risky as it rarely makes a profit after tax and inflation.
    Rae
    2nd May 2016
    2:42pm
    I disagree entirely. I don't think we should be passing legislation to force people into expensive and inefficient superannuation funds at all. This tax minimisation strategy has passed it's use by date. It simply doesn't work.

    Daryl Dixon explains nicely in yesterdays Sunday Herald Money section why directing voluntary savings elsewhere than super will allow a comfortable retirement that superannuation simply can no longer achieve.

    Money kept outside of super is also readily available way before 55 and more easily directed and thus allows increased volatility to be somewhat overcome.

    All the historical economic cycles and plans just no longer apply in a deflationary situation with negative interest rates and markets all highly overpriced at the same time.

    Young people who save diligently by living in a frugal manner can achieve a deposit and buy using negative gearing themselves to build up an asset for later sale or housing in retirement. No they can't buy in Rozelle or Point Piper but then neither could 99% of the rest of us either.
    Joe
    2nd May 2016
    2:43pm
    People comment on negative gearing being a factor in influencing property prices however no one seems to consider what impact overseas investors have on those prices. Maybe a more broader discussion may need to be had.
    LiveItUp
    2nd May 2016
    2:52pm
    Rae many wealthy people I know only have a small amount of their wealth in super. They would rather pay higher taxes than have to deal with the restrictions super places on their money. Even owning property in super is more expensive and restrictive than owning it outside super. Last quote I same the interest rate on a loan for property inside super was over 1% higher than a normal housing loan and the fees are much higher as well. LVRs are also lower.
    Rae
    2nd May 2016
    3:28pm
    Yes Bonny. I figured that out a long time ago. I only ever put the mandatory amount into super and kept all other investment outside.
    Not only have I beat the fund year after year but as far as tax goes my accountant said it very well when she commented, " If we are paying tax then we are making money". That sure beats losing capital on tax minimisation schemes, particularly ones that governments use as playthings each and every budget night.

    I never used negative gearing either as my income was never enough to warrant it but positively geared and would recommend it to young workers prepared to save and invest rather than consume.

    Negative gearing would work for those on over $80 000 and I can't see anything wrong with that either considering that every other worker can do it. I find the Labor rules a bit odd in only denying workers that right where investors, trusts, super funds etc will all still be able to use negative gearing. I don't think they thought about it well at all.
    LiveItUp
    2nd May 2016
    3:49pm
    Agree Rae super other than SMSFs are good preforming investments. I too figured that out a long time ago too. That was why I started my own SMSF.

    A property can have a positive cashflow but be negatively geared.

    Positive cashflow is where the rent exceeds all other cash expenses. A property can then be negatively gearing after all the non-cash deductions are applied.

    I always found that you had to have a decent income to write off those non-cash items as they decreased your asset base. With 50% CGT then it may be better not to write them off with lower incomes.

    These non-cash deductions are a big minus in Labor's negative gearing on only new properties. New properties are usually more expensive than older ones but they come with big non-cash deductions.

    This favour higher income earners over smaller income earners as they have bigger tax write offs and their income gives them accesss to more money. Labor's policy favours the big income earners.

    I wish the media would home in on that fact.
    Adrianus
    2nd May 2016
    3:50pm
    Dollars Over Respect. Your plan lacks common sense, if you stopped to think about it. Try asking your bank manager to finance a property under a LRB contract where the income is insufficient to cover the loan repayments. He would think you have taken leave of your senses.
    LiveItUp
    2nd May 2016
    4:06pm
    Frank that happens all the time when people have multiple properties and lots of other assets.
    Adrianus
    2nd May 2016
    7:38pm
    Bonny yes it does but not with Limited Recourse Borrowing, and that is what DOR was suggesting.
    Mez
    2nd May 2016
    2:44pm
    Basically fair in taxing the wealthy pensioners who should not be receiving pensions or who live in big old empty nests and who are out of tune with society for various reasons.
    As usual, Rainey makes a lot of sense but both Liberal and Labour governments have failed to keep promises and why I find the Independents more interesting voting possibilies.
    Again, commenters fail to consider the disadvantaged situations that women have been and still are in who end up with half the super that men obtain and as a result , homelessness figures are increasing for older and elderly women because rents have soared yet the Rent Assistance only increased by ONE DOLLAR! Shameful!
    Rae
    2nd May 2016
    3:11pm
    What is 'wealthy" Mez and be careful because once they get a taste of taking houses off pensioners you could be next.

    Perhaps a good look at what people earned over a lifetime, how much tax they paid and if they wasted the money in the eyes of the political correct then no pension for them either.

    No I'm not serious but this is the type of narrow minded, envious crap that people are on about.

    Your income might very well be in what I class as "wealthy".

    Why are women disadvantaged? Because they chose to have kids and not go to work. I could say I was disadvantaged because I chose to have kids and work and paid out tens of thousands of my own money for childcare.

    No one forced women after 1970 to give up work for childminding.

    Even before that my mum and mother in law ran businesses while raising a family.

    And if women work only half the time then they have half the savings unless they marry wealthy men.

    Perhaps those kids they sacrificed for might need to help them out in a society with no welfare.

    And be assured all of this bickering, generational envy, dod eat dog is about destroying the middle class and the welfare state.

    Your comment about big empty nests is falling into that very trap Mez.
    Mez
    2nd May 2016
    3:29pm
    Rae...Wealthy as referring to the Budget and their definition obviously.
    Child rearing is a common excuse whilst the large disparity in wages between men and women is the issue.
    Women like me did not use children as an excuse although it is the men who use that reason to justify paying lower wages.
    Women also are partly to blame for not being assertive enough because many females are too concerned about pleasing others and in whether they are attractive to men.
    MICK
    2nd May 2016
    4:21pm
    I support superannuation 'pensions' which pay out over $100,000 pa need to pay some tax, depending on how much over this figure they get. A sliding scale. This is fair and common sense and fair.
    Rae
    2nd May 2016
    4:21pm
    Sorry Mez I was a bit harsh there. I agree that work that women do is highly undervalued and underpaid.

    I'd go a step farther and suggest many workers of both sexes have been unfairly denied a fair share of the productivity gains generated by our generation and our parents in building infrastructure and the www.

    It is interesting to note that Coles has used the collaboration with the union to deny some workers up to 30% in income.

    I also heard an unemployed lad describe his reason for not applying to work in the local fish and chip shop. They pay $14 in hand with no super, sick leave, holidays or worker's compensation. We are talking very hot oil here and hot griddles.

    A lot need fixing I'm afraid as it seems our society is not fair for a lot of folk.
    particolor
    2nd May 2016
    4:38pm
    "Destitute Waifs" is Winning so far ! Can someone top it ? :-) :-)
    particolor
    2nd May 2016
    4:51pm
    Look out Mick ! "Bonny the Cruel"(Quote) is sneaking up for first place now ! :-) :-)
    particolor
    2nd May 2016
    4:58pm
    Another contender !.. "The Rich and their Trolls" :-) :-)
    MICK
    2nd May 2016
    8:52pm
    Welcome to the contest.
    particolor
    2nd May 2016
    11:07pm
    OOw ! I like Medical procedures, and other "Luxury's" :-)
    Rodent
    2nd May 2016
    4:49pm
    Dear ALL

    Earlier today, at the end of a post I wrote this about a Herald Sun article

    Also for those readers of the Melb Herald Sun they have a big article today about Welfare expenditure with a large amount of data in a table format , data source is the Tax Institute

    So for those of you that LIKE plenty of NUMBERS/DATA here is a Link to the data that was behind that Article - it is good bedtime reading BEFORE tomorrows Budget!!!
    http://www.budget.gov.au/2015-16/content/bp1/download/bp1_bs5.pdf

    Bonny knowing you like info about welfare here is some PS by the way I AGREE with you why on earth would we commit to spending $50 Bill on SUBS?
    MICK
    2nd May 2016
    7:51pm
    Will check it out.
    For the record: It's official, the rich to get their much cried for corporate tax cut.
    WE NEED A NEW GOVERNMENT where this is removed! Obscene!

    2nd May 2016
    5:02pm
    I'll ask this again, because I'd really like Turnbull and Morrison to give me a considered response, keeping the numbers and common logic in mind. It's very frustrating that people like Bonny cut in with their inane waffle trying to derail the discussion. No wonder this country is in a mess! Please, Messrs. Turnbull and Morrison, can I have a considered response, taking into careful account the facts noted?

    And Bonny - can you please refrain from interfering in my efforts to open a dialogue with people qualified to answer.

    Please can someone ask Mr Turnbull and Mr Morrison what is the point of helping Australians to save more for retirement when they are going to take it back on retirement through an assets means test that effectively offers 7.8% indexed to inflation for retirees to SPEND their savings quickly.

    The high taper rate makes no sense in the current low investment return environment. Unless a retiree can accumulate over about $1.3 million, or can achieve high net returns on their investments, their super and savings are useless and retirees are better off having less than about $375,000. This provides a huge incentive for retirees to reduce their assets in any way they can in order to maximize income - especially if their assets mean they miss out on pension benefits. (It should be noted that the CSHC is worth nothing compared to pension benefits. It is not accepted by councils, for car registration and licenses etc. and most medical specialists don't accept it, which means losing the pension can cost chronically ill retirees countless thousands on top of a huge pension loss.)

    The new taper rate creates a huge incentive for over-investment in the family home, driving up real estate prices and disadvantages younger Australians. It also encourages generous gifting before retirement and lavish spending. It is a powerful disincentive for younger Australians to save for retirement.

    It DOES NOT only affect ''millionaires''. People with as little as $300,000 are losing out under the new rules if they own even a very modest home. And even $1 million is NOT a lot of money to last a retiree couple through 30 years of increasing health and care costs and zero ability to earn income. By forcing retirees to reduce their savings, they will be left with nothing to pay for expensive aged care when it is needed, and many will struggle to meet the costs of home help, disability aids, specialist medical procedures, and other ''luxuries'' they saved for but are now denied.

    Meanwhile, those lucky enough to be able to continue earning but keeping savings low can have an income of $70,000 and still get a part pension, but asset-tested retirees will be earning, in some cases, as little as HALF the aged pension. It's patently unfair, cruel, and economically foolish.





    Rainey
    2nd May 2016
    12:16pm

    It should also be noted that the introduction left no time for those over 60 to plan around the change unless they are in a position to upgrade housing or to gift and live very frugally for 5 years. The most pain will be inflicted on those just turning 65 or just over 65 as they have a lifetime to live with the impact and no realistic options to deal with it.

    And the changes discriminate most against the most disadvantaged. They hurt the sick and disabled who have higher needs and a more precarious future, and they hurt those who were educationally disadvantaged and can't invest for high returns. They favour the privileged who are in better health and/or able to achieve high returns or supplement their investment returns with part time work.

    Heaven help anyone who got a modest accident compensation payout intended to fund disability aids and home help. They will now have to live on that money and forfeit everything it was intended to provide.
    LiveItUp
    2nd May 2016
    5:59pm
    I think you need a new needle in your record player as you are playing the same song over and over.
    MICK
    2nd May 2016
    7:52pm
    As are you Bonny.
    Anonymous
    3rd May 2016
    8:00am
    I just want a sensible answer, Bonny, from the people I directed the question to.

    I quite agree that if people can afford to support themselves, they should. My issue is with giving people an INCENTIVE and REWARD for doing what is unfair to the rest of the population and detrimental to the economy.

    Plain common sense says that you don't pay someone more than they can earn on their investments as a reward for buying a bigger house, when the housing market is overheated and we need older people to downsize and free up housing for families.

    Plain common sense says you don't pay someone to give money to their kids before turning 60, when that means the State will then have to support the giver for life.

    Plain common sense says you don't pay someone to go on luxury cruises or to drink, gamble, and party, when you SAY you want them to save their money to be more self-supporting in old age.

    Plain common sense says that if you want people to save for retirement, you don't make them WORSE off in income terms for having done so, and offer a big reward for them now reducing their savings to levels that put them in jeopardy in future years.

    It's got nothing to do with who someone ASSUMES can or can't afford to support themselves, or who should or shouldn't be allowed to leave something behind for their children. It's got to do with respecting lifestyle choices, being sensibly fair, and doing what's good for the nation.

    It's plain common sense that the means test should test MEANS, not punish people for saving, regardless of their future needs. Certainly, apply fair deeming rates and test income. Tax high retirement incomes. No problem with that. But it's just plain STUPID to say ''save for retirement. We must put more into super'' and then say ''Oh, you saved for retirement, but you didn't quite make it to self-sufficiency. Then we'll take all the benefit of your saving away and grind you back down to the level of those who didn't save''. It's just plain STUPID to say ''save for retirement, but we'll pay you twice the going investment return rate NOT to save.''

    This isn't an issue that should be decided by the green-eyed and envious, or on the basis of ill-informed assumptions about other people's circumstances, nor on the basis of anecdotal or personal experience. There are hundreds of thousands of retirees in Australia, and all of them have very different circumstances, backgrounds and needs. Their assets DO NOT tell anything valid about their ability to be self-sufficient, because their health, education, ability to achieve strong investment returns, family circumstances, age, and a million other variables influence their future needs. Nor can we safely assume that having $X means being ''lucky'' or having more income or an inheritance. It might simply mean having lived more frugally and sacrificed a great deal.

    The pension system is WRONG because it works on WRONG assumptions. It needs an overhaul. That overhaul might not necessarily make much difference to me, or to a lot of others with modest savings. That's not the point. Those who can be self-sufficient, should. The point is that the current system is BAD FOR THE NATION. It's discriminatory. It's unfair. It's cruel to many. It's unnecessarily expensive. It's grossly inefficient. And it could be dramatically improved - but not while stubborn green-eyed monsters defend it on the basis of personal whims and unsubstantiated assumptions.

    What I want to do is draw the attention of the government to the flaws in the system and encourage a sensible overhaul. And yes, that overhaul would count the family home as an asset, but in a way that is sensible, fair, productive, and beneficial to the nation and doesn't cause unreasaonable hurt to battlers who own modest homes and doesn't force anyone out of their home.

    We need to test INCOME in a way that ensures there are no incentives to reduce income deliberately to qualify for benefits. Leave assets alone except for the purposes of assessing deemed income where appropriate. Let people benefit from their past saving so that future generations will save more and the aged will retain their saving for aged care and expensive late-life health needs, or leave the next generation something to reduce THEIR dependence on the State. (Bonny, they will ONLY spend it on trips to Disneyland if we continue to punish people for being fiscally responsible. THAT is the problem. It's not inheritance tha't's the issue. It's screwing the fiscally responsible and paying people to NOT SAVE.)

    This is an issue of NATIONAL IMPORTANCE. It's got nothing to do with who has what or who might leave money to their kids.

    If we DON'T want people cruising the world, spending their money abroad, then coming back to push the cost of pensions up, or pushing the young out of the housing market by paying top dollar to buy expensive mansions so they can keep getting the pension, we need to STOP REWARDING THAT BEHAVIOUR and start rewarding the behaviour that is good for the nation.

    Either come out honestly and say ''We want consumption and any cost'' - in which case stop the BS about the deficit and debt and stop screwing a select few unfairly - or put your policies where your mouths are, Turnbull and Morrison, and encourage the behaviour you CLAIM is needed. But STOP screwing a sector of retirees unfairly and scaring the crap out of the rest of the retired community by constantly harping about reducing pensions.
    bebby
    2nd May 2016
    6:50pm
    Bonny, it must be quite tiring for you being on this site all day, is it perhaps the reason you were talking to yourself in your last comment?
    particolor
    2nd May 2016
    7:24pm
    The 8 hour day was implemented back a while now ! That's what Labor day is all about I think ? :-)
    MICK
    2nd May 2016
    7:53pm
    What's an 8 hour day parti? When politicians stop for their lunchtime banquets?
    Wstaton
    3rd May 2016
    12:19pm
    Hah! now we know Bonney is just seeking attention.


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