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Superannuation, the ultimate government cash cow?

Discussion in 'Business, Investment and Economics' started by drsmith, Apr 20, 2012.

  1. BlindSquirrel

    BlindSquirrel

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    You will recall that Brendan Grylls had a crack at that in the 2017 WA state election. The chamber of Minerals & Energy (Mining company lobbying group) spent $2 million on advertising to oust him from office.
    https://www.abc.net.au/news/2017-03...der-brendon-grylls-and-his-mining-tax/8367508
    I daresay they won't be trying that again.
     
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  2. sptrawler

    sptrawler

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    He made a brave call, which was right, but as usual he was shouted down by the media charged morons.
     
  3. Humid

    Humid

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    Considering his electorate
    Pretty dumb really
    After all the good work he did for royalties for the region
    Political suicide in one horse towns
    Big miners start talking layoffs bingo
    Job security big mortgage
    Bye bye Brendan
     
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  4. sptrawler

    sptrawler

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    At last, even Ross Gittins has the penny drop, I've been saying this since this thread started. The first time Gittins has talked sense IMO. The super compulsory contribution is becoming just another indirect tax on workers IMO. Why low paid workers should have their contributions lifted to 12%, when they are struggling ATM, why the hell not give them a 3% pay rise?
    https://www.theage.com.au/business/...-make-you-pay-more-super-20200209-p53z31.html
    From the article:
    The main reason compulsory super isn’t a particularly good deal for most union members is that when forced to pay super contributions, employers reduce their workers’ pay rises to fit. This has been understood from the outset, but last week’s report from the Grattan Institute convincingly demonstrates its truth.

    The second reason is that, by design and above certain limits, super savings reduce workers’ eligibility for the age pension. Treasury and independent analysts have repeatedly discredited the industry’s claims that the present contribution rate is insufficient to provide workers with a reasonably comfortable retirement
    .

    The present legislated plan to raise the contribution rate to 12 per cent represents the industry funds’ gift to the army of ticket-clippers making their living off the super industry. It’s origins lie in the Rudd government yielding to industry fund pressure because it believed the huge cost to the budget would be more than covered by its wonderful new mining tax.

    But, as an earlier Grattan report has shown, raising the contribution rate as planned would force many workers to accept a lower-than-otherwise standard of living during their working lives so their living standard in retirement could be higher than they ever were used to when working.

    This is the union movement protecting its members’ interests? Sounds to me more like union officials expanding the union institution at the expense of their members – and delivering for the banks’ "retail" super funds while they’re at it
    .
     
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  5. sptrawler

    sptrawler

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  6. dyna

    dyna

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    Hiddens and the Gratten institute have made a good case in their submissions to the Treasury's review into the adequacy of current retirement incomes,but I can't see the feds Not going ahead increasing the SG to 10% just after the next election,then up to 12% by 2026. Even former Labor PM Keating seems to be in favour.So that's something.Remember,Paulie's compulsory saving for retirement scheme started off at just 3% and only really got started10 years later at 9%.The present cohort of retirees just haven't had enough time in the super system,so are feeling the full brunt of the limited value in the government pension.If future generations start early enough,take full advantage of gov. co-contributions, spouse contributions, home deposit off-sets,tax tricks(let's not forget them) etc,they should get to that magical $1.6 Mill TBC.Sadly,probably not much can be done now, for those destined to miss out.It's going to be tough for them,no doubt about it.
     
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  7. BlindSquirrel

    BlindSquirrel

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    It'd be nice to hold it at 10% for simplicity's sake...
     
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  8. Knobby22

    Knobby22 Mmmmmm 2nd breakfast

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    I think 10% is enough.
    You don't need to be better off when you retire than when you are working.
    When you are saving to buy a house, got kids etc. That is when you really need the money.
     
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  9. sptrawler

    sptrawler

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    The other thing is low income earners, don't get much of a tax break on their contributions anyway, so it may be more beneficial to leave theirs at 9% and give them a 3% pay rise.:2twocents
     
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  10. sptrawler

    sptrawler

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  11. sptrawler

    sptrawler

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  12. sptrawler

    sptrawler

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    At last some commentators are starting to see sense regarding super, they are saying what has been said on ASF for years.

    https://www.macrobusiness.com.au/2020/02/forget-superannuation-lift-the-aged-pension/
    From the article:
    In its submission to Treasury for the Retirement Income Review, Mercer has called for a universal non-means tested Age Pension to be considered in place of raising the superannuation guarantee:
    The submission said the universal Age Pension would:

    • Ensure financial decisions made by retirees were not informed by how to best maximise their access to the Age Pension;
    • Provide retirees with greater security of income with the knowledge of longevity protection, leading to a better quality of life;
    • Provide stronger incentives to downsize from the family home, improving housing affordability for younger families; and
    • Enable a simpler, more efficient system with reduced administration costs incurred by the Government from the means-tested Age Pension.
    “While the universal Age Pension may not be a viable option in the current political environment, it is a compelling proposition for a simpler, more effective system with a clear objective that delivers stronger long-term retirement outcomes for older Australians,” Knox said.

    Jeez at last Hooray.:xyxthumbs
     
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  13. sptrawler

    sptrawler

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  14. Junior

    Junior

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    This is far too intelligent to ever become a reality. You can see the sob stories now, about how a handful of wealthy individuals receive Age Pension, and how that's unfair....then we revert back to a horribly inefficient means-tested system.
     
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  15. sptrawler

    sptrawler

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    It just makes absolute sense doesn't it Junior, everyone gets the pension and if people wish to save for a better retirement they can, but the super is treated as income and taxed.
    It would give some confidence that the money being taken off the workers, is actually for their benefit, not just another Government tax.
     
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  16. Junior

    Junior

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    Yes. Furthermore, age pension is taxable income. So those wealthier individuals will end up giving 30% + back to the Government in income tax anyway.

    You could have the same payment to everyone, and then have a separate supplement for those who really need it, that kicks in when your assets fall below $100k or $200k or so. That way you're only means testing those who need the extra payment to get by.
     
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  17. PZ99

    PZ99 ( ͡° ͜ʖ ͡°)

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  18. Bill M

    Bill M Self Funded Retiree

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    Whilst I may have said before that this might be a bad move I have now changed my mind due to the severe change of events. This is a crisis we have never seen before, people need to pay their mortgages and put the food on the table and we have to allow all means for them to be able to survive. Who would have ever thought that there would be 100's of thousands of people being stood down with no pay. A very sad situation beyond any individuals control, we need to do/allow anything to get us all through it.
     
  19. qldfrog

    qldfrog

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    I am not a fan of mandatory super but the timing for taking money out of super can not be worse after a 30pc market fall..sure it could fall more but hopefully people are now in safe options;
    I yesterday requested my fund to move 10% into growth option..very small move back in.
    Have been 100% in capital guarantee since january and saved buckets
     
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  20. PZ99

    PZ99 ( ͡° ͜ʖ ͡°)

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    I was 100% cash until the XAO hit 5700.. but having said that I missed out on some of the market gain prior to that. Still saved a truckload here though.

    It's now 70% cash and it'll drop to 20% if the XAO drops below 4k (I don't think it will)

    I think it's better to allow people to access their super during times like this rather than cash handouts.

    It becomes their own debt to repay rather than the country paying it (we are already in record debt)
     
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