Superannuation: objective is to be enshrined in legislation

The objective of super is to be enshrined in law before the system can be made fairer.

The superannuation industry is singing the praises of the Turnbull Government, as the PM attempts to enshrine in legislation a definitive objective for super in order to pave the way for a more sustainable system.

Yesterday, the Government announced that the objective of Australia’s $2 trillion superannuation system will be enshrined in legislation, in response to recommendations made in the Financial Systems Inquiry (FSI), led by former Commonwealth Bank of Australia boss David Murray.

It is hoped that the enshrinement of super’s objective will open talks on how to create a more sustainable superannuation system in the future – one that leads back to the original intention of superannuation being a means for people to have more money in retirement.

"The government accepts the Financial System Inquiry's recommendation that the objective of the superannuation system is to provide income in retirement to substitute or supplement the Age Pension," said Assistant Treasurer Kelly O'Dwyer. "In other words superannuation has a very practical purpose, it should be used to increase self-sufficiency in retirement. It is not intended to be a support for the accumulation of wealth that can be passed down to subsequent generations."

Whilst the Government is taking into account the recommendation of the FSI for the main purpose of super being to “provide income in retirement to substitute or supplement the Age Pension”, it is now accepting proposals for the wording of the objective in a move to ensure that any changes made to the system are well-informed and consistent over time.

“The simpler and clearer we can be around the objective the better able we are to meet that objective,” said Ms O’Dwyer. “People plan a long time for their retirement. These are policies that are put in place for a period of time which is why we want to get some consistency around the way that we treat superannuation.”

In theory, the objective will inform potential tweaks to superannuation tax concessions and will hopefully lead to greater efficiencies and increased transparency in, and better governance of, the superannuation system. It may also lead to lower fees for consumers.

Industry Super Australia also welcomes the Government’s commitment to enshrine the objective of super in law.

“Clarifying a definition in law, once and for all, should allow policy makers, regulators and the industry to get on with the single-minded job of ensuring the community’s super savings are invested securely for the long term and delivering the best possible returns,” said Chief Executive of Industry Super Australia David Whitely. “Hopefully, it will also help to liberate superannuation policy from the constant unhelpful political tinkering that comes with the Budget and election cycles. This will help build public confidence in the system.”

Read more at the Australian Financial Review

Opinion: Let’s just get on with it 

Indeed, the Government should be commended for taking this first step towards making the superannuation system fairer for all. And enshrining a definitive objective of super in law is a necessary, and intelligent, move towards making this happen. But wasn’t the objective of compulsory industry super, plainly laid out when it was first introduced by Treasurer John Dawkins in 1992? Wasn't it set up to provide retirees with more money for a comfortable retirement?

‘The increased self-provision for retirement will permit a higher standard of living in retirement than if we continued to rely on the Age Pension alone. The increased self-provision will also enable future Commonwealth governments to improve the retirement conditions for those Australians who were unable to fund adequately their own retirement incomes.’ (superannuation guarantee bill 1992).

So, as our resident retirement guru Kaye states, “Either the link to provision of funding specifically to provide an income in retirement was not made clearly enough, or has been misunderstood or misinterpreted since.”

The fact remains that, due to a ‘liberal’ interpretation of this objective, most of the benefits of the current system go to the wealthiest 20 per cent of households or, in other words, those who would not otherwise require access to an Age Pension. Tax concessions and means testing really only help out those who need it least. A revision of the system will not only make it fairer for all and, although the superannuation system is largely funded by individuals and employers, it should also relieve some pressure from the Government to fund our retirement income system of the future.

Now, the current definition obviously allows for the accumulation of wealth that, according to many, isn’t fairly taxed. Those who have flaunted these tax rules can’t be blamed for taking advantage of a system that is clearly geared towards taking such liberties. But if these tax concessions come at the expense of the Age Pension, well, that just isn’t fair, intelligent or sustainable.

To “set clear objectives for the superannuation system” was just the first recommendation made by the FSI. Now it’s up to the Government to produce a new definition and make the necessary legislative changes so it can finally get on with making our retirement income system fairer and more sustainable and to protect the Age Pension so it remains a right, and not a privilege.

Once the ‘right words’ are defined, the Government should stop talking and take action to make super fair for all. They should begin by addressing the overly generous tax concessions that obviously favour wealthy Australians. This is a good start, now, let’s just get on with it. 

Do you think the objective of superannuation needs rewording? Is this a good first step towards making the superannuation system fairer for all? Or is it just more political side-stepping to avoid the necessary policy changes that need to be implemented?

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    COMMENTS

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    mogo51
    10th Mar 2016
    11:34am
    There is no doubt the Superannuation System needs refining. As is rightly stated it is time for the Syuper system to stop being a tax haven to make the rich richer. Most certainly not at the expense of pensioners who are being flogged daily by both sides of Government. Their history is very poor in this area.
    What nees to be determined is where a fair retirment figure is and anything after that, should be taxed at normal rates. Politicians included, it is time their rorts are over also.
    FM
    10th Mar 2016
    11:44am
    An adequate superannuation system enshrined in legislation was set up by Ben Chiefley and agreed to by Robert Menzies (1945/1946). People paid into it and are still paying into it but it has been eroded and ignored by present politicians who pretend it never existed. This is not a good basis for trusting any new government systems. The have appropriated all the money paid into and being paid into the previous system and told people the pension is a welfare payment to by paid at their discretion. How can people have confidence that money paid in now and in the future will go towards their retirement?
    Dickb
    10th Mar 2016
    11:48am
    My concern is that legislation can be made but then repealed or changed by future Governments. There needs to be some stability of all aspects of superannuation as workers approaching retirement can get their financial affairs in order based on known entitlements, rules, transition to retirement, tax issues, preservation age and the like. Planning ahead for retirement is pointless and very costly if a change in Government can change it all. For example the significant change the way superannuation was counted as an asset from 1 January 2015.
    Rae
    11th Mar 2016
    10:57am
    This is a very valid point. Superannuation has far too high a level of sovereign risk. It is changed every single year come budget time.

    Contributing the minimum legal amount into superannuation funds and investing any other savings outside the super system has worked well for me.

    The tax paid on the outside savings has been minimal as I can cheaply and easily rebalance and adjust to changing market conditions outside super where inside I am locked into a formula and changing asset allocation is tedious and costly.

    It is having another basket, one not as exposed to the risk of sovereign changes and one readily available at any point in time.

    I can't understand why anyone would put all their savings into the one pot, especially a pot with so many government controlled rules and regulations.
    Rae
    11th Mar 2016
    11:03am
    Adding residential rental income to the mix of outside of super income has also helped as that income has been achieved regardless of market ups and downs. I don't have to sell shares or bonds at bad times. Just positively gear so you have maximum income produced. No headaches and as my accountant says, "If we are paying tax we are making money." Never a truer word.

    The trick is to preserve capital and produce as much income as possible trying to increase income production to keep up with inflation.
    MICK
    10th Mar 2016
    11:58am
    It is pleasing to hear that the well understood and ignored rorts of the well off may be removed. I'll believe it when I see it.
    With new legislation also comes danger. Governments of both persuasion have been nibbling at the edges of our superannuation industry for decades. They want some of the spoils so we all need to be careful that this does not end up another Trans Pacific Trade deal where secrecy and therefore skullduggery exists.
    Bring it on............after comment from experts who are not tied to government money.
    ray from Bondi
    10th Mar 2016
    12:08pm
    that is the problem, experts that are really realy independent, that is not what the goverment will have do any report, they only engage people who they know will return the result they want, and on the very few occasions that has not happened they bury it, and tell no citizen anything of the results other than the orwellian rhetoric they want advertised.
    MICK
    10th Mar 2016
    12:59pm
    New legislation needs to be read by non vested interests, the results passed on to the media (a few will run with it) and the poison exposed if there is any. No problem.
    Rae
    11th Mar 2016
    11:10am
    mick I don't see the really well off actually using superannuation. It seems to be a lot of middle income earners using salary sacrifice and other tax dodges. Most wealthy people have incorporated and don't need to do those sorts of things.

    Unfortunately the fear of paying tax stops a lot of people from making money and they don't really understand what they are doing.
    Financial literacy is dismal.

    They keep people concentrating on the fact that super is only a tax minimisation scheme, possibly less effective than some other methods of minimising tax, and conceal the fact that most returns on funds after charges and fees and taxes are very ordinary.
    ray from Bondi
    10th Mar 2016
    12:04pm
    legislation means nothing does anybody remember keating saying just before his party was given the boot that he had enshrined a pay rise in legislation, any goverment can change andy legislation to what they want.
    Retired Knowall
    10th Mar 2016
    1:28pm
    Absolutely right, it's called Sovereign Risk.
    Superannuation is not the primary vehicle of the rich, it's returns are low, and the risk of manipulation by successive governments high.
    Anonymous
    10th Mar 2016
    3:43pm
    ray from Bondi, you're partly right, Keating did, in fact, enshrine tax cuts in legislation just prior to the 1993 election. The country couldn't afford it and it should never have been considered. This was the "unloseable" election when the Libs were led by Hewson who stuttered and stammered over the famous birthday cake question from Mike Willesee.

    Keating made the tax cuts L.A.W. law knowing that the incoming government would be forced to repeal it. Sadly for Keating, Hewson lost the "unloseable" election and Keating himself had to repeal the L.A.W. law.
    Retired
    10th Mar 2016
    12:11pm
    Absolutely, the objective of superannuation will need rewording and protected by a new legislation so that people will have more confidence in putting more savings in their superannuation and this will eventually relieve young generations from supporting the governmental age pension. Also, the new redefinition to ensure superannuation will no longer being used by politicians as a toll to win elections.
    MICK
    10th Mar 2016
    1:01pm
    I wouldn't put a razoo in. The rumblings over the past 5 years give me the feeling that they're coming for your super. We'll see.
    P$cript
    10th Mar 2016
    9:25pm
    Mick, the Government can't touch your superannuation as it is you money. The only way it can be touched is by changing the way it could be taxed, on the way in or out. If they tax it to much then this would be a drain on Government funds in increase payments for pension, so this would be self defeating!
    Rae
    11th Mar 2016
    11:20am
    When has the government ever worried about self defeating legislation. They seem to pass it purely in order to do the next government in if they think they might lose an election.

    Look at the privatisation and the cost of billions for VET training and employment services. Contracts to companies like Serco etc. More billions going overseas year after year.

    A spend of $16 billion to gold plate a network sold for $10 billion.

    A school campus exposed as sold for 30% of its value.
    On and on.

    We don't even have any National security left. Food or infrastructure. Look at who owns it now.

    All self defeating but not to the pollie who walks at the end with a great pension and a few millions to earn on the board of a corporation.

    I can't believe after all that has happened from 1975 until now that people still trust the government. It's bizarre.
    ex PS
    11th Mar 2016
    3:56pm
    Don't be too sure P$cript, before the previous Treasurer left he was dropping ideas about not allowing lump sum withdrawals from Super Pensions and not allowing Super to be passed on to family members other than spouses into his interviews. I would not be surprised if this is the future direction of the LNP.
    These ideas are floated to see who is paying attention, if no one reacts they become part of future policies. The Minister involved can claim that it should not be a surprise as it was discussed publicly.
    Anonymous
    15th Mar 2016
    10:59am
    P$Script, please tell me you are not gullible enough to believe the Government can't touch your superannuation!!!! They WILL touch it. They WILL change legislation to bar withdrawals above a given annual threshold, and to stop funds being left to anyone other than a dependant spouse (and maybe not even a dependant spouse, eventually!) when you die.

    The Government will claim the balance on your death, boasting that it is ''FAIR'' for those who don't need their money anymore to give it to the government to help fund support for the needy pensioners. Except they will, again, lie about where the money goes.

    Remember that GREAT BIG FAT LIE about cutting pensions to ''millionaires'' to give more to those in genuine need? Well, in fact, NOT ONE CENT EXTRA goes to anyone in genuine need. An extra $30 a week goes to those with a few hundred thousand in the bank and getting a full pension TEMPORARILY- until the 3-year freeze wipes out that gain and then NOBODY wins.

    Actually, the whole of Australia loses because there is far more incentive for people to abandon savings plans and spend up big. If you are going to lose $78 a year in income for every $1000 you save, why bother to save?

    Morrison has to take the prize for the most destructive and STUPID treasurer we have ever seen in this nation, and he may well prove to be the Treasurer who doubles the cost of aged pensions, while plunging half the nation's retirees into abject poverty.
    Phil1943
    10th Mar 2016
    12:12pm
    I thought it was all about us. I thought it was about funding ourselves after we no longer work. Okay, if it's a tax lurk for some - a very small minority I'd guess, regulate that part of the whole scheme better with guidelines administered by the ATO (just like my SMSF). Superannuation is not...NOT...something that's intended as a source of taxation revenue for the government. It's all about us, not them. The greedy pollies had better keep that in mind when making whatever legislation they "enshrine". Personally, I read the figure of 'two trillion dollars' and I can already see their grubby hands, and those of their financial industry mates, reaching out for what we've put away.
    MICK
    10th Mar 2016
    1:02pm
    Greed prevails with individuals and also governments. You know what they say: ours is ours and mine is mine.
    ex PS
    11th Mar 2016
    4:05pm
    The government has a problem, it is having trouble paying back their backers for their generous campaign contributions. It can't get the money from big business so it is going after the self funded retirees and pensioners.
    Unfortunatley for them what used to be a soft target is turning into a cranky bunch of grey wolves who are starting to snap at the greasy fingers that are making a grab for what the government sees as easy money.
    The government does not want a generation of self sufficient voters thinking for themselves, it will do what it takes to restore what they think of as the natural balance of power, in other words they want a pliable mass of retirees dependant on the pension who they can coerce and manipulate.
    4b2
    10th Mar 2016
    12:20pm
    Let us hope when they make any changes to OUR superannuation System, the same changes apply to THEIR superannuation system. This includes a limit on the contribution allowed by politicians, I am not sure if there is a limit for them at present. If that are so good at managing the economy why dont they move their super into similar fund rather rely on the tax payer to prop up their scheme.

    If self funding retirement is the goal why has successive coalition governments put a clamp on compulsory contribution increases. If Howard and Tony/Mal not put a clamp on the increases I doubt they would be whinging about pension funding. After all that is what PK intended.
    MICK
    10th Mar 2016
    1:02pm
    Ha, ha, ha. Funny.
    *Imagine*
    10th Mar 2016
    12:37pm
    I am all for sorting out the present mess of Superannuation and State Senior Pensions. Pensions that we should be viewing as an asset that we have contributed to over the years, not welfare as some would have it. However, being a cynic I have reservations when I hear that the Super Industry is singing praises and the Government wants to enshrine in legislation a system that provides for people to have more money in retirement. “…objective of the superannuation system is to provide income in retirement to substitute or supplement the Age Pension," said Assistant Treasurer Kelly O'Dwyer. "In other words superannuation has a very practical purpose, it should be used to increase self-sufficiency in retirement.”
    Read between the lines. Super will only be available as a pension, one that will be paid in a manner and at a rate determined by legislation. Now imagine, no more lump sums for cars, mortgage settlements, holidays, etc. The Superannuation savings of the individual (by law) will be directed to a Professional Superannuation fund of your choice. It will then be paid as a pension to you, for as long as it lasts. You will of course be paying management fees and insurance to the fund. Is that why they are singing praises? You will not be able to source lump sums because that will mean that the Superfund loses money and the Government will need to pay more part pension. The losers will again be the lower to middle income bracket who have struggled to attain a small buffer to use as they see fit in retirement. On the other hand perhaps the Nanny State wouldn’t go that far - but I wouldn’t bet on it. Kaye’s view on fairness could be smashed as the Government privatises pensions in this manner. We need to watch them very carefully.
    MICK
    10th Mar 2016
    1:05pm
    SUper needs to be left alone and the only thing which needs to be sorted is the legislation which lets the rich use contributions into a super policy they have no need of and gives them huge taxation advantages. We all pay for that. The rest needs to be left alone.....unless the bastards want some. Read my lips!
    ex PS
    11th Mar 2016
    4:07pm
    Imagine, wish I had taken the time to read your comment before adding my own, it would have saved me the time spent typing.
    Torch
    10th Mar 2016
    12:42pm
    Super is and has been for years enshrined in law . Laws derived over time with heavy penalties for non compliance . When you start to hear in the media that super is being wroughted by the rich , or is a tax dodge for the rich ,it means the population is being manipulated into accepting and even calling for a new super plan "to be enshrined in law".In other words governments can't currently get their hands on yours and my super . And they desperately want to . $2 trillion dollars sitting around that they want to take over and in return promise us some sort of government backed pension . This has been coming for years ,the pot is so big now that they are salivating at the thought of getting control.This is not conspiracy theory , the industry has been fighting off government intervention for years . The government is getting smarter :Sweeten the pie for the fund managers AMP , MLC , the Unions etc and get them on side and puff , your super is swallowed up and we can all go and dance around the maypole singing the praises of our new government pension .We are so gullible ! Be very careful what you wish for ,you might not like what you get .
    MICK
    10th Mar 2016
    1:05pm
    You bet. Spot on. I suspect there is much more to this than the slick advertising is telling us.
    ex PS
    11th Mar 2016
    4:15pm
    Government should have no say in what happens to Super, I remember more than 20 years ago, I was serving on a Union Council and it was put to the Union that there was so much money in the Super Fund that it bwould be appropriate for a certain percentage be releasede so that the state government could use it for government projects. I voted no but the motion was put to the members and passed.
    This same government is now bemoaning the fact that the super fund may not be able to fundfuure retirees. Of course there is no mention of the stripping of funds by the same government.

    10th Mar 2016
    12:47pm
    I think the government is being rather tunnel-visioned here. Many of today's retirees and soon-to-retire had very little superannuation but put their SAVINGS into super late in life because they were promised tax relief for doing so. Ultimately, they probably got very little, if any, real tax relief due to repeated changes in legislation, but what is relevant is that the money put into super was their own money, accrued by going without and accepting a reduced lifestyle. Now they are told they must continue to go without, and sacrifice all benefit from their savings, passing on all the benefit to the taxpayer by foregoing a pension and now, presumably, being denied the right to take a lump sum when required to replace furniture, car, take a long-yearned-for holiday, or do household renovations.

    The other issue, as raised be several, is the issue of trust. Government just keep changing the rules!

    The bottom line is that current retirees paid for their aged pension and were promised a pension on certain terms. That promise should be fulfilled. Change the rules for the future, but leave today's retirees to enjoy their retirement on the terms that were agreed between them and the government of the day.
    Rae
    11th Mar 2016
    11:29am
    The government has already broken that Rainey. The Fair and Sustainable Pension Act was retrospective. Defined Benefit pensioners unable to change anything.
    The trust has been lost. Government simple does not care about people at all. This legislation proves it.
    KSS
    10th Mar 2016
    1:00pm
    If the reason for legislating the meaning of superannuation is to define its use, then it does not go far enough. The wording would also need to include the prohibition of withdrawing lump sums which are then spent on world trips, caravans and motor homes, holiday homes, gifts to children, grandchildren's school fees, new cars, bigger houses and so on. Preventing lump sum withdrawals (except in very limited extenuating circumstances) would make super a less attractive 'investment' for the so called 'rich' who, according to some, are 'rorting the system'. The total amount able to be sacrificed/deposited in a superfund could also be capped at a generous amount say $2 million with the cap raised in line with CPI annually to ensure the value is in line with increased cost of living over time. Interest earned would be at the prevailing rate and not included in the deposit cap. After all we all know the interest rates go down as well as up. This way those in the 20% wealthiest households will be limited as to what they can save in superannuation and would have to find alternative (and taxable) investments if they want to accumulate wealth to bequeath to their offspring. It would not punish those in the middle for doing all they can to save for retirement who are in fact most in danger of being caught in a trap than anyone else.

    You must not remove the incentive to save in super from the vast majority in order to 'punish' the minority.
    MICK
    10th Mar 2016
    1:07pm
    I agree that lump sums need to be much smaller amounts to avoid double dipping. After all SUPER IS A PENSION. If people want a lump sum then they should save this in a separate account.
    Anonymous
    10th Mar 2016
    4:49pm
    I agree, Mick, but I think it unfair to change the rules in a way that disadvantages people who saved under the old rules. The change to the taper rate, for example, has wiped out the retirement plans of people who did the right thing, trusting that the law wouldn't be changed to disadvantage them.
    Ayers Rock
    10th Mar 2016
    1:14pm
    This old age pension system is currently artificially or on purposely being distorted. No need to reinvent the wheel. Look at how wealthy EU countries succeed this retirement tasks. Look at Germany, Holland, Sweden etc.
    Their system is much better then ours, and their old aged pensioned people live happily and confidently.

    What to be done:
    1. Introduce a NEW retirement system that every working person contributes 6% of salary (aside from current super cuts 9.25%, this is for private super) for min 30 years to the Government Treasury only. (Keep all private banking and super funds and individual hands off from this money pool.) If the person is married and his/her spouse does not work, then cut another for the spouse 6% tax for 30 years.

    2. After 30 years of min service is completed than provide for example 3000 $ (todays value, it may be indexed over the years) per month per person.
    Maybe the person wants to be retired at the age of 50 not 65 or 67 or 70. As rough, the married couple makes 6000 $ per months. Will they spend all their money instantly? No, I do not think so. Some part will be going to investments in Australia and create more jobs for younger generations and some parts go to the GST. So almost min 10% goes to the Treasury (600 $min back to the Treasury after 1 or 2 months of the 6000$ pay time). That is it. Nothing to worry. Australia needs such revolutionary action minds and performances. Such steps make Great Country, not jinky junky stingy, citizens' pocket money collection greedy politics.

    To settle the system for the transitional times within next 30 years, how does it go?

    Then get backup up money from the oils, minerals gold exports which are drained from Australian people owned rights. After almost 25 or 30 years passed, the Au Gov may not need this back up to support the new Retirement Pension system as well. Think well ahead and become sophisticated in a cooperative way. We need such Roosevelt minds and actions. That old US President made the pillars of wealthy USA in early 20th century. He was the Great Man.

    20 March 2016
    MICK
    10th Mar 2016
    2:28pm
    Wonderful sentiments. Sad Australia is run by harlots who are tied to big business and who make self interest decisions to benefit them. Not the nation.
    The government will not be keeping their dirty, greedy hands off your money. They're coming. Just give them time.
    I like some of your ideas but the western world is run by the rich whose only interest is THEM. That's why there are so many poor decisions. Our starting point needs to be the criminalisation of election funding, jobs after politics or payments to family members at any time including trusts, companies etc. That would rat out the bastards who are ruining the nation. They will not sit still for this though!!!!
    Not a Bludger
    10th Mar 2016
    1:14pm
    If you want a clear statement of intent that the pollies want to snatch more of my (and your) super money - this is it - dressed up in all sorts of "extra fairness" types of statements - aka even more complexity.

    Tell them and all the so- called professionals/rent seekers commentating in this area to nick off and leave my super alone.
    Phil1943
    10th Mar 2016
    1:23pm
    Succinctly said, NaB, and you've hit the nail on the head.

    I'll never forget the words of an older colleague when I first started work. He told me that the biggest lie I'd ever hear is: "I'm from the government - I'm here to help you."

    In the 50 years since then he's never been proven wrong.
    MICK
    10th Mar 2016
    2:29pm
    Methinks you are on the money. So be vocal. Email a few pollies and tell them. Make the bastards feel uncomfortable!
    Tigers
    10th Mar 2016
    1:38pm
    More money for Financial advisors and super companies, thats about all.
    Florgan
    10th Mar 2016
    1:39pm
    What are the generous tax concessions for the wealthy that you are talking about ?
    Florgan
    10th Mar 2016
    2:11pm
    Why are self employed people only allowed to put in to super Up to $25k and wage earners and allowed up to $35k ?
    And
    The only way to make super fairer for all is for all to have the same rules ! Polititians included !
    MICK
    10th Mar 2016
    2:32pm
    Florgan: the rich milk the super system. Firstly they do not need the super system as their retirement benefits are in their assets and bank accounts...including trusts and offshore tax shelters. Secondly they avoid the top marginal tax rate of around 49% when they contribute into super which has a low rate of 15%....and then all the earnings of their funds also only pay a rate of 15%.
    bartpcb
    10th Mar 2016
    3:01pm
    Peoples confidence in the Superannuation schemes is deservedly becoming more and more cynical. Their super can too easily go belly up due to 'crashes' in the market place, and they have seen real examples of that. Their super is subject to attacks by successive governments that change legislation whenever it suits them. There is always a 'good reason' for the changes but it rarely if ever benefits the elderly. It's time those in Government thought seriously about 'guaranteeing' super in some way, it won't be easy though, not with all the sharks out there.
    PAYEdmydues
    10th Mar 2016
    3:31pm
    I agree superannuation should be fairer however changes are not fair if superannuation is attacked on its own.
    What of capital gains tax, gearing for 'investment' properties and zero tax on family home. Much bigger sums are obtained via these avenues than a tax break on $35K, say $17K max. Last 10 yrs of my working life I paid over $100K in tax pa. I played by rules and saved my super over many decades. Did not do 'cash' jobs, use car leasing, family trusts, negative gearing.
    By some peoples figuring I'm rich as I am now retired and pay myself a comfortable pension, far less than a politician, and have no government funded health card.
    I sympathise with those who have less but any changes need to be broadly based if any fairness is to be realised. Taxation however is not fair so not likely to come to pass.
    ex PS
    11th Mar 2016
    4:26pm
    At the end of the day people who have done well with thier Super by taking advantage of all available concessions have done nothing wrong or illegal.
    If the government did the same to big business using the excuse that they did not expect them to use the rules to their best advantage there would be court cases backed up for the next decade
    Why does the government traet their backers with the utmost respsct and self funded retirees with so much contempt?
    I'm in the same boat as PAYE, not rich but my wife and I live a good life, the only one puttingb money into my Super investment was me.
    So the government can keep their thieving hands off my money and go and get their mates to pay the right amount of tax.
    Hairy
    10th Mar 2016
    4:05pm
    Believe it when I see it ,you can bet your life they going to lock it up so you can't access anything but a meagre weekly amount just like today's below the poverty line payments.its a form of genocide they want you to curl up and die you old welfare recipients.
    JC
    10th Mar 2016
    5:56pm
    I'd like to make the following comments about the most unaffordable superannuation tax concessions that this Govt. refuses to deal with. The "Better,"now "Simpler" Super arrangements introduced in 2007 by Treasurer Costello arose from a detailed Senate Inquiry into superannuation. In a nutshell, one of the main findings of that inquiry was that because super was taxed at 3 stages, contribution, fund earnings and draw down, a change was needed to provide an incentive for people to invest more in super, thereby reducing the pressure on the Age Pension bill.

    Those tax concessions currently cost the budget approx. $35 billion a year, perhaps more depending on which authority you listen to.

    The arguments supporting the present tax concessions were to an extent, flawed. Firstly no tax was paid on super earnings prior to some time in the 1990's so why should a tax concession for super accumulated prior to that date receive a tax concession? Secondly, self employed people who paid into a super fund, could claim the cost of those contributions as a tax deduction, so why should those people who have already enjoyed a tax concession, receive another one? Many of those will be at the top end of superannuation town! Thirdly, the superannuation tax concessions enjoyed by the wealthy are concessions from not having to pay tax at what would be high marginal tax rates, much higher than the tax earnings of a super fund, i.e. the concession can and would often exceed the tax actually paid on fund earnings

    If that wasn't enough, any non super income of these wealthy Australians is taxed at a lower marginal tax rate than an equivalent amount of non super income received by those who don't enjoy tax free super. That's because the super income of those enjoying the tax related concessions is not added to their non super income to determine the tax on the latter.

    Finally, many of these wealthy Australians receive the Age Pension because until a year or so ago, their super was exempt from the income test for the pension. The very generous Government grandfathered the legislative change to in future include that type of income in the Age Pension income test. Did it grandfather very recent changes to the inncome test deductable amount for recipients of defined benefit pensions, pensions dwarfed by those received by wealthy account based superannuants? Of course not! Somehow this Government thinks that's fair.
    FM
    10th Mar 2016
    7:56pm
    Hi JC, Peter Costello and his advisers were correct in their analysis of the tax paid on super. Current retirees paid full tax on all contributions to State Super and workplace funds that were in operation before the 1990s. Benefits at the end were defined and their value reduced so that people received little much more than the contributions made. In addition current retirees should receive a state pension as retirees do in Europe and NZ on the basis of their contributions. Instead they receive small tax concessions. Some tax concessions were available for contributions for later types of super schemes which came into place in the 1990s. These would not give any current retiree an adequate retirement income. The returns on individual lump sums in super funds over the past ten years have been below any tax threshold after fees are deducted. Much of the money being drawn down by retirees is from their own personal savings over a lifetime. We do not tax people for drawing down their bank savings but we want to tax retirees for doing that. Unlike other western countries pensioners here do not receive the pensions they contributed to, their income security is lower than that of pensioners in any country in the region yet people determined to further impoverish them. In no other country are the greedy so focused on robbing the elderly. We have no problem with the millions of dollars paid to CEOs each year that we ultimately pay for in goods and services but we grudge any retired person a cent more than the pension and we even query people’s right to that. Workers who are now targeting retirees to get tax cuts need to remember that they are fashioning the retirement system that will apply to them.

    10th Mar 2016
    9:06pm
    I heard rumours that there were proposals being discussed in high places to rule that remaining super at the end of one's life belonged to the government, because it is meant to fund retirement - not to pass on to heirs. If legislation enshrines the purpose of super as funding retirement, I suspect there is a huge danger that the government will dictate that whatever you don't use for your own retirement should be taken to fund the retirement of someone else - i.e. that super remaining at the end of your life belongs to the taxpayer!

    That would give the government a far bigger bonus, I think, than making retirees reverse-mortgage their homes. Imagine how much some, who die relatively young, might leave in their super accounts.

    Be scared! Be very very scared! This government has demonstrated it's greed, it's contempt for retired Australian who worked and saved, and that it can never be trusted.
    ex PS
    14th Mar 2016
    5:56pm
    They win, instead of trying to remain self sufficient I intend to spend every cent I have and then put my hand out for a pension. The money I received recently from a house sale will be invested in anything other than Super so that I can access it and spend it when and how I choose. I will max out my monthly paymnets from my Super Pension and anticipate running out of money two years before I can qualify for a pension but don't worry I can go on the dole with little fear of being forced to take a job. Mediocraty wins out yet again, you can't fight city hall.
    The LNP have effectivley destroyed confidence in the Super System and can look forward to spending more and more on pensions in the future.
    Anonymous
    15th Mar 2016
    9:37am
    Yes, ex PS. Wish I was younger and had that option. I regret saving. I certainly regret investing in super. I'm telling my kids to do the opposite of what I did. The government punishes the responsible planners who live frugally and save for old age and rewards the irresponsible spenthrifts. What will we get in the next generation, do you think???

    Only TOTAL IDIOTS would support these stupid destructive policies that are destroying both the economy and the society.
    ex PS
    15th Mar 2016
    2:35pm
    Hopefully our sons and daughters will have taken on board some of our sense of responsability and be a bit more sceptical about how governments operate.
    Let us hope that we have managed to instill a core of resilience in them that will allow them to outperform and dominate the majority of whining, overindulged misfits that society has produced.
    P$cript
    10th Mar 2016
    9:15pm
    The is nothing wrong with the superannuation Laws. The problem is how the superannuation contributions are taxed and yet this is the are tihs Government won't touch, because it will effect their rolling rich mates.
    PIXAPD
    11th Mar 2016
    6:46am
    The system needs refining to stop the politicians receiving such LARGE pensions at the expense of the taxpayers. These parasites need culling to their pension payment and the savings used for pensioners.
    Ron
    11th Mar 2016
    8:49am
    Commentary to date has missed one of the great injustices in the way the system works.
    I refer to the exorbitant salaries (and therefore fees) fund managers and advisers pay themselves.
    The objective of super schemes is about the welfare of the owner of the money, not about the wealth accumulation of those who take no personal risks and personally receive inflated returns whether or not their efforts are productive. In times of market downturn or poor investment decisions, their personal incomes continue unabated.
    No-one would deny a fair return for value added results, but where is the incentive for fund managers and advisers if their return continues at inflated levels irrespective of their performance? "Take no personal risks (someone else's money), get high personal return, enjoy something of a captive market, protected in some measure by Government.." A VERY COSY ARRANGEMENT!
    In short, there are too many "snouts in the trough" protected and even inadvertently encouraged by Government regulations, that are not associated with adequate measures to keep the focus on the real objective .... to optimize a self funded input into future retirement.
    ex PS
    14th Mar 2016
    4:02pm
    Fees should be calculated on the profit made on funds invested not as so many fund managers do, as a percentage of the balance invested. No profit no fees.
    This will make fund managers more accountable for the money they are managing.
    FM
    11th Mar 2016
    9:40am
    I agree Ron
    ex PS
    11th Mar 2016
    3:47pm
    Hang on a minute, we are taking advice from the banks on how to revise the Super structure. Is this a joke, the same organisations that are taking advantage of loopholes everyday to withhold payments to people who were unfortunate enough to invest in their insurance schemes, the same organisations that are taking exhorbitant amounts of fees from existing Super Policies.
    Any one would think that Malcolm is an ex-banker, oops I seem to remember that he is. Explains a lot.
    As a vested interest, banks shod not be advising government on Super, if the banks want to take part as part of a larger group maybe, but as a solr advisor no way, they will make sure that most of the money invested is taken up with fees and charges.
    Revising the Super system is what got us into this mess, the less interferance by government the better.
    Rae
    11th Mar 2016
    5:50pm
    I believe we may need a good old fashioned court challenge before this is over.

    The returns on public service funds through the late 70s and 80s look decidedly shonky.

    No way can you make 3% year after year without something strange going on.

    There were no earnings as you stated before.
    Not Senile Yet!
    15th Mar 2016
    2:18am
    in 25 years they have made 33 changes to Super legislation...and you do not see an ultimate aim by the Government taking advice from Bankers?????
    Make no mistake ...they want to lock the Trillions up....lock it up so no-one can get a lump-sum...ever!!!!!
    The idea being to only pay a Yearly Pension from your Super Account until you die!!!!
    To remove your ability to leave YOUR accumulated funds to anyone other than immediate family (that you support)....that does not include your kids...you will no longer support them! It also may not include your spouse...because wife no 2 or 3 may well have divorced you to qualify for a Aged Pension!!!
    So that only leave the Big Bro himself.....namely the Government!!!!
    Welcome to the NEW...even better model....of the OLD DEATH TAXES!!!!
    Current Superannuation Funds are totally under the Governments Legislation/control!!!
    You have NO control over your OWN Retirement Money....they tell you when, how and in what form you can access your own money!!!!
    Welcome to the New World ....trust us we will protect it for you.....just as we protected the Aged Pension Fund....spent in 1990;s....legally....by US!!!!
    These pricks make Ned Kelly look like a dam Saint!
    ex PS
    15th Mar 2016
    2:45pm
    NSY, we simply need to remove the ability of this or any government to carry out this outrage.
    If we punish the LNP for even thinking of doing this by voting them out the other political scavengers will get the message.
    Don't think about who to vote in, just concentrate on who we should vote out.
    What is seriously needed is a strong united Lobby Group that represents retirees, a group that can go to Canberra and say to different politicians "Look after us or face being sacked at the next election."
    This group should be apolitical with no allegence to any party, it should only look at what is best for retirees.
    If you look at the National Rifle Association in the USA, they have the politicians running scarred yet they don't have a large percentage of the vote, they gain their power from all uniting for or against individual candidates.