Financial Standard Comments - ASMA dismayed by proposed super hikes

Comment by John Doe (NA)

John Doe (NA) — Thu, 04 Apr 2013 14:43:39 +1100

Senior management of ASMA and ASFA could perhaps reflect on the purpose of the superannuation system. It is not there to be a tax effective alternative to other investment options that the very wealthy might pursue. It is there to take pressure off the pension system and with an objective of working Australians having a comfortable lifestyle in retirement.

ASFA does not exist to maximise the size of the Australian superannuation industry.

By all means provide constructive criticism but a lot of the comment from within the industry sounds like rent seeking to me.

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Comment by tony rumble (LPAC Online)

tony rumble (LPAC Online) — Thu, 04 Apr 2013 15:04:59 +1100

Unlike the invisible "John Doe of NA", I'm happy to be named and accountable for the following comments. Instead of what seems to be a social media surveillance of super tax reform media comment - perhaps on behalf of Get Up or the ALP, let me try to make some sensible bi partisan comments:
- anyone with a super account balance of $800,000 is hardly well off - earnings at 5% pa = $40,000 pa income
- assume a 50% market crash (likely to happen again in most retirees lifetimes) and earnings falling to 1% pa = $4,000 pa TOTAL INCOME FROM SUPER
- the whole point of concessional tax rates for super is to wean people off the welfare system - leaving it to assist the truly needy
- ASFA shows that the Government welfare assistance to retirees is about $300,000 across the life cycle WHETHER or not this is via pension payments or via tax concessions for super...the ideal, egalitarian society.

Comments based on super concessions being "tax rorts for the rich" are themselves "rent seeking" from those who seek to play the class warfare card.

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Comment by Russell Dunn (CFP)

Russell Dunn (CFP) — Thu, 04 Apr 2013 17:28:20 +1100

One of the rules I lay when talking to an audience is that "there is no such thing as a dumb question". So here goes my questions and observations...

I am sure that the noise in the market and press at the moment is about changes to those who earn more than $300k and the tax rate they are likely to pay on the earnings in their super fund(s). Surely there is a disconnect when someone who is earning more than $300k (regardless of what they have in their super account) is/are doing OK for themselves. And even if they only have $800k in their super account then their emphasis must be on other forms of wealth creation (otherwise they have better come to see me for some hand-holding).

And my other dumb question is: my Facts and Figures booklet 2012/13 tells me that the top MTR is 45% plus any levies and surcharges. Why, then , is the figure mooted at $300k and not $180K taxable income? And shouldn't it be those who are earning less than $37k feel hard done by? After all, their MTR is a mere 19% - a whopping 4% more than the super tax rate!!!

Why should these people trust the super system? A bit like Facebook - I just don't get it!!!

And nothing wrong with your comments either J.D. of NA.

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Comment by David M (Save Me)

David M (Save Me) — Thu, 04 Apr 2013 19:50:06 +1100

I have to confess not to have heard of ASMA before..but I think threatening to take their money out of super and somewhere else where they would have to pay a lot more tax is somewhat of a laughable threat. The problem is the tinkering. You have to wonder how much revenue will be raised versus the loss of confidence in super ( and the ALP) the HNW clients will get it and grumble a bit, but how many other super members will not be affected yet overreact and lose what little confidence they have left in the system. Time and time again Little Wayne and Julia continue to make policy decision that raise little tax ( e.g mining tax) but cause great damage to everyone in their path. I wish someone would get this over with..it would be more humane to put them down then continue to watch this train wreck of a government.

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Comment by Richard Isaac (Wiser People)

Richard Isaac (Wiser People) — Sat, 06 Apr 2013 00:34:35 +1100

I have for several years, tried in vain to gain the attention of members of parliament and other organisations to expose and question the strategies and processes employed by both the ATA and Centrelink when they assess the superannuation funds as income earned in Australia. The benefits paid to Australian migrants when they reach maturity are treated differently to the superannuation paid to Australians who are born in Australia who enjoy a very benificial tax status when their superannuation funds reach maturity.

Migrants superannuation is their retirement benefit and is referred to as income earned in Australia for assessment by the ATO and Centrelink. I find it interesting to see so much indignation from all quarters when the current government decides to apply a tax increase to superannuation, and at the same time, chooses to ignore the discriminatory taxation of migrants overseas superannuation benefits, generated and earned overseas before the date of migration. These funds are earned and assessed for taxation purposes in another countries legal jurisdiction. We should also remember that these overseas managed funds are regulated by superannution acts that would comply with similar acts in Australia.

Why am I, and so many other Australians who are migrants, discriminated against when our superannuation pensions reach maturity in Australia? During my last visit to my country of origin, I was made aware of overses employee unions and organisation who now warn intending migrants of the fate of their super funds should they decide to migrate to Australia.

This is a discriminatory standard that we can all do without. Overseas Superannuation may well be an asset - benefits are not income earned in Australia to be assessed at the full rate of taxation.

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Comment by John McCrory (Retired)

John McCrory (Retired) — Mon, 08 Apr 2013 10:29:57 +1000

Russell Dunn from CFP needs to interpret his Facts and Figures correctly. Those earning $37K or less are not being "hard done by" - there is the little matter of no tax payable the 1st $16K which means the effective tax rate on $37K is 10.78%. That is a whopping 4.22% less than the super tax rate.

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