2 March 2023

Super tax breaks just first of many needing reform if Australians want a fairer society

| Ian Bushnell
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Jim Chalmers

Treasurer Jim Chalmers wants to make the super system more sustainable. Photo: Supplied.

The socialist barbarians are at the gate if you believe the fire hose of criticism unleashed in the Murdoch media over Treasurer Jim Chalmers’ modest proposal to cap superannuation accounts at $3 million to ease the burden of the 15 per cent tax concession on the budget.

At first, the move will only affect about 80,000 taxpayers lucky, or savvy, enough to accumulate such large balances, but the decision won’t be indexed, so it will draw in more as time goes on, as intended.

Some, such as key Senator, David Pocock, have called for an even lower cap of $2 million but indexed.

The Treasurer, who also had wanted the Stage 3 tax cuts up for debate before being shut down by Prime Minister Anthony Albanese, wants to make the super system more sustainable and, as you would expect, is looking for ways to repair the budget after the COVID-19 support and stimulus spending.

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He should be congratulated for making a start on the unsustainable largesse doled out in the Howard/Costello years that has undermined the budget and rewarded Australians who are already winners and white-anted the foundations of an equitable society.

Tax reform, in general, is long overdue, but once a constituency of rent seekers has been built, taking away their privileges is a risky business for any government, especially a Labor one.

The mob at the national broadsheet are speaking to their audience, but the alarmist torrent this week is designed as ever to influence public opinion, put the frighteners on the government and bolster the Liberal Party.

Opposition Leader Peter Dutton has already said the Coalition would knock the plan on the head. But being the friend of millionaires will be a tough sell at a time when so many Australians are doing it tough.

The conservative reaction is typical of what anybody has to deal with if they propose changes that might lead to a fairer tax system.

Former Labor leader Bill Shorten fell foul of the Murdoch megaphone at the previous election when his sensible but too-detailed reform program came under ferocious attack and may have cost him the Prime Ministership.

No wonder his successor went softly-softly in last year’s campaign.

Hence all the cries of a broken promise and how that will damage the government.

What nonsense. No government is bolted onto its election manifesto. Just ask John Howard.

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Chalmers is tackling what is obvious to everybody – those who will be affected are using an overly generous super system as a tax shelter and wealth generator, not for its intended purpose of retirement income.

The critics and lobbyists are doing what they always do – exaggerating the number of losers and diversity of backgrounds so they can spook as many people as possible and attract them to their cause, much like the misleading but successful campaign on franking credits.

They argue the revenue collected will only be minimal as people move their money elsewhere. It’s not just about revenue, it is the ongoing cost to the budget. If the money does go, it only proves the point about its real reason for being there.

Predictably, there are cries of class warfare. But if anything, policies such as this have been part of a decades-long project to stack the deck against ordinary Australians.

What the critics are really worried about is that the whole neo-liberal project might be unravelling.

At a time when the cost of living is going through the roof and the nation faces crises on multiple fronts – housing, aged care, health – how can such an ongoing gift to the wealthy be justified?

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Is it really that radical a principle to stop diverting money to those who do not need it and spend it where it is needed or to find ways to rein in the deficit that cause the least pain?

This should be just the start of restoring integrity to the tax system, if Labor has the stomach for it, because Australia is reaping a terrible harvest from policies that have favoured the well-off and entrenched inequity.

Negative gearing and capital gains tax concessions, which have built a landlord class and given us some of the world’s most expensive and overpriced housing, should be added to the Treasurer’s list. Not to mention those stage 3 tax cuts.

Declining homeownership rates, a rental crisis and rising homelessness are the legacies of Peter Costello’s worship of capital and property.

Canberra cartoonist Pryor used to draw Costello in Victorian garb and Dickensian grimness. For many, that is where many Australians are headed – some are already there – if Labor cannot unwind that legacy.

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Just finished telling my kids to forget super. It’s a waste of money as the government will now attack it every time they need more $. Invest in other things as super is dead

devils_advocate11:05 pm 14 Mar 23

Why is it that the “leaners” always think that the only way they can get ahead is to impose increasingly harsh penalties on the “lifters”?

@Futureproof
Did you actually watch the full video? I watched for the full 20 minutes. Not suprising that a financial adviser would be against the proposal.
Nevertheless, in that time, the only relevant thing she covered was to highlight the lack of indexation of the $3m cap in the proposed legislatiion. Then she proceeded to tell us the sky is falling, by showing how this will impact super holdings over the next 10, 20 and 30 years.
The lack of indexation of the cap is an important oversight … it certainly needs to be implemented and I would hope that the eventual legislation would tie the cap to the PAYG income tax brackets review.
Other than that, thanks for 19 min 50 secs of wasted time, Futureproof.

Capital Retro4:36 pm 11 Mar 23

And I think you have to sign up with ActewAGL as well.

“The mob at the national broadsheet are speaking to their audience…” – ha ha ha – the most hypocritical line in this entire opinion piece.
Let’s not pretend that the two main parties aren’t ideologically driven – one is socialist and the other capitalist.
The opinion by Ian Bushnell is clearly a socialist opinion and I suspect the audience he’s speaking to are likeminded. His mob will never by happy – no socialist government has ever managed to successfully redistribute wealth “fairly” – even China, who has had the best go at it has managed to squirrel away wealth from it’s people.
The other mob likewise will never be happy because the more successful individuals become, those not so successful despise and envy them.
It’s futile. But let’s not pretend what Chalmers and Albo are doing is “fair” – that’s in the eye of the beholder.

“… let’s not pretend what Chalmers and Albo are doing is “fair” – that’s in the eye of the beholder.”
What’s not fair, domenic, about preventing an outrageous sucking on the public teat to the tune of $1+ billion per year, by 0.5% of Australians earning mega bucks into their superannuation accumulation account? I don’t give a damn how much money people make, but I do give a damn when the mega rich expect the true heavy lifters (middle income earners, who pay their due in tax) to publicly subsidise their gluttonous grab for even more wealth.

Hi JustSaying – I doubt very much the mega rich expect anyone to publicly subsidise them. You can hardly blame people taking advantage of a legal way to make money. I very much agree the concession in question should be limited BTW. Some unsolicited advice – perhaps concentrate on bettering your own financial position for you and your family under your own steam rather than expecting the Government of the day to redistribute wealth created by others (I know, an unpopular opinion these days).

@domenic
“I doubt very much the mega rich expect anyone to publicly subsidise them”
Allowing them to offset losses in one income stream to minimise the tax to be paid on another income stream is just that – a subsidy from the rest of the tax paying public.

“Some unsolicited advice …”
I’d happily take your advice if it was sound but unfortunately it’s totally devoid of logic and missing the mark. I am not asking the government to redistribute wealth. I am asking those that are high earners to actually pay tax commensurate with those earnings. I have a very good financial position and pay tax accordingly. To provide services, a government relies on its ability raise revenue. Those at the bottom end of the income scale don’t have much, if any, discretionary income – that’s why we have a progressive scaled tax system. So, I don’t care how much someone makes, they should be rewarded for their efforts. The principle is that under our progressive tax system, the more people earn the higher their tax bill. Allowing people to avoid paying tax commensurate with their income, via various tax minimalisation (aka avoidance) schemes simply means that those who can’t afford creative accountants (e.g. middle income earners) are left to carry the burden. While a tradie should be able to reduce the cost of their tools, etc. in determining their income for tax purposes, the tradie should not be able to deduct the cost of other enterprises (e.g. interest for a loan on an investment property) from their tradie income. If, after deducting the cost of the investment, the property earns no income, then pay no tax on the rent and it stops there.
Oh and for the record, my financial position is very sound and I pay tax commensurate with my standing.

Capital Retro6:28 pm 11 Mar 23

Get over it.

@Capital Retro
Squawking on cue.

devils_advocate11:53 am 08 Mar 23

Treasury has now confirmed that due to inflation, and lack of the threshold being indexed, this tax grab will capture increasing numbers of taxpayers over time until it eventually impacts 1 in 10 taxpayers

In 30 years time. Don’t forget that part, as frankly it is the most important part of it

That is a very long time for anything. And even then – plenty of chances for the next several Federal Governments to adjust as needed along the way as needed.

The dribbling on about indexation is a bit of a straw man given we don’t do that for so, so many other tax related policy settings. That isn’t to say it isn’t important – but we should do the same across everything ultimately (I would prefer as I said elsewhere – a fundamental rethink much broader around taxation).

The other part of this being forgotten is – is the impost really that large at the end of the day? Even in 30 years time, you are going to be in a very solid position (better than 90% of people by definition) financially if you hit the $3 million threshold, and you are only ultimately still going to get (on current policy settings) a tax concession for further earnings above that? Is there a reason why, in a generally progressive tax system, super shouldn’t have a progressive nature to some of its tax treatment too?

It highlights the fundamental question at stake here – is super about placing as many people as possible in a good position for their retirement, or is it meant to be a means for tax minimisation and favourable investment conditions for the relatively wealthy in society?

devils_advocate1:19 pm 08 Mar 23

Nope.

1) it’s not a concession, it just looks that way because the income tax rates are not just progressive, they’re actually punitive
2) having a lower rate of tax on retirement savings is MEANT to encourage people to save, it’s a feature, not a bug
3) capital is mobile. Tax it too heavily and it flees to lower-tax jurisdictions.
4) there are other benefits to having investment capital available, beyond those that accrue to the capital owner.

@devils_advocate
“having a lower rate of tax on retirement savings is MEANT to encourage people to save”
Is that meant to be a joke? If someone has $3m in their super accumulation account, at a relatively conservative return of 8% (not unreasonable given performance over the last 10 years), they will make income of $240,000 pa and pay $36,000 (at 15%). If the concession is reduced they will pay $72,000 (at 30%) – which will still leave them with a topup “profit” into their accumulation account of $168,000. That’s on top of the enormous salary they must be receiving to be able to achieve a balance of $3m in their super accumulation account.
I’m amazed that people like you actually cannot see that this move is a fiscally responsible closing of a $1 billion + tax loop hole. Is your clinging to conservative values really making you that blind to the bleeding obvious?

Capital Retro4:34 pm 08 Mar 23

JS, they pay a lot of tax on the way there. And when they are self-funded they aren’t drawing the pension and all the perks that go with it. That is worth at least $50,000 a year.

Exactly, the key point is they are self-funded and sacrificed a lot to get there. Don’t raid their coffers to redistribute to the lazy and irresponsible. Having a gap between rich and poor in society is completely necessary to incentivise the poor to get up off their butts so they dont need to be funded by taxpayers their whole lives.

I’m not surprised, CR, that you would defend these poor destitute individuals against a fiscally sound initiative – purely because it’s a Labor initiative. Did you you actually keep a straight face when you typed “they pay a lot of tax” – or did you have your tongue in your cheek? How about, like middle income earners, we get them to pay tax commensurate with their actual income … you know the income they use to purchase their multiple mansions worth millions of dollars on Sydney Harbour or Perth’s riverfront?

Bob the impala6:30 pm 08 Mar 23

Stimulated by Treasury’s analysis, devils_advocate has noticed the existence of bracket creep. Well done.

I wonder though at his pessimism, that conservatives will remain unelectable for another thirty years, thus unable to rectify this grievous eventual burden on the then top 10% of superannuation wealth-holders.

@Sam Oak
Yet again you demonstrate your blinkered perspective when it comes to sucking on the public teat. The super changes are about super accumulation funds not pension funds. People who receive income from interest bearing savings accounts pay tax at their marginal rate people (within the progressive PAYG tax system), so why shouldn’t a similar progressive tax system apply to those generating hundred of thousands in income from their super accumulation account – which is essentially a savings account)?

I can’t believe that people think that the taxpayer concessions in Super shouldn’t have limits.

Superannuation concessions are meant to provide people with an incentive to save for their retirement and replace reliance on the taxpayer funded pension. A person with a Super balance of $3million+ is well amd truly above the amount where they won’t have enough to rely on the pension.

Although it’s good to also note that the vast majority of people with these balances only have them because of the previous relaxations of the limits that allowed people to dump millions of dollars in assets into Super to dodge tax. It had almost zero to do with saving for retirement.

With the current limits, it’s very hard to accumulate these massive balances, although I still believe the overall limits should be indexed to not catch significantly more people in the future.

The discussions about capital flight and the overall tax system shouldn’t really have anything to do with the discussion around Super and Super concessions.

Bob the impala6:44 pm 08 Mar 23

Sam Oak writes for The Onion?

devils_advocate12:47 pm 09 Mar 23

“ The discussions about capital flight and the overall tax system shouldn’t really have anything to do with the discussion around Super and Super concessions.”

Yeah sure why bring up people’s incentives in a discussion about tax policy… lmao

LMAO,
Yeah, imagine thinking that the Superannuation system was designed as a a way for people to provide a reasonable amount of savings for their retirement and to replace the taxpayer funded pension rather than a tax avoidance scheme for wealthy people.

Bahahaha.

Capital Retro6:04 pm 09 Mar 23

Learn to read and think for yourself JS instead of reading the Australia Institute manifesto. I said they pay a lot of tax “on the way” the same as everyone else does when accumulating.

devils_advocate7:18 pm 09 Mar 23

Lmao

Some people clearly don’t even realise that labour is inherently easier to tax than capital because it is less mobile

Or that imposing a punitive rate of income tax that discourages people from working, is no justification for imposing punitive taxes elsewhere

On the bright side I guess *those people* will never need to worry about this tax grab affecting them – not now, not in 30 years

lol

@Capital Retro
Well, CR, if the Australia Institute’s manifesto is:
All Australians should pay tax commensurate with their actual income – as opposed to paying tax on the “after using every tax ‘minimalisation’ scheme their tax avoidance expert accountants can think of” income
then I’m happy to be associated with their thinking.

It’s certainly better than being a SKY right-at-night parrot, like you, sitting on your perch squawking “leave them alone, they paid lots of tax … leave them alone, they paid lots of tax … leave them alone …”

Lots of tax in comparison to what, CR?

Compared to age pensioners, many of whom still pay tax, despite struggling with daily cost of living pressures? Definitely it’s lots compared to what they pay.

Compared to middle income earners, most of whom pay their taxes without using tax avoidance schemes? Hell yeah, it’s lots compared to them.

Compared to the marginal income tax rate the holders of the $3m + super holdings should have paid. Nope it’s a mere pitance.

As former Canberra MLA, Michael Moore opinined in another publication, “The superannuation system was not designed for wealth accumulation. Treasurer Jim Chalmers announced the intention to focus on those with more than $3 million in superannuation. Instead of asking them to pay tax at 32.5 per cent, 37 per cent or at 45 per cent – he still allowed a concessional rate of 30 per cent.”.

So, CR, keep on squawking – at least there’s the 0.5% (those 80,000 Australians, with mega super holdings, who are affected) listening to you. And who knows, if you squawk loud enough one of them might even give you a cracker.

Perhaps it’s time to include the family home valuation into the calculation for the assets test in accessing the aged pension. Surely people owning $3M home would not require aged care pension?

At present, the home is not taken into consideration when accessing the pension. Perhaps they should also consider that people who own a $3M home should not have to rely on the pension.

@MM “… people who own a $3M home should not have to rely on the pension.”
If you truly believe that, MM, then you are seriously unhinged. Even the least knowledgeable person, on matter relating to real estate, knows that the value of a house is irrelevant until it is actually sold. Are you suggesting the government should force people to sell their homes?

Just Saying,
Considering your other comments about subsidies and concessions, how can you possibly suggest that including the value of the family home in the assets test for the pension is not a good thing?

People with millions of dollars in assets should not be receiving direct welfare payments.

And no, they would not be forced to sell their homes, the government can simply offer the pension as a loan recoverable against their estate when they die.

Otherwise you literally have taxpayers subsidising the inheritances of asset rich retirees.

It’s the biggest rort going around in the welfare sector and entire industries of financial advisers are employed by helping older people to maximise pension payments through hiding their true wealth.

@chewy14 So in essence you are proposing an inheritance tax (which I believe is known as death duty) … but only on the family home?

@chewy14 Actually on reflection, you are proposing a HECS-style pension system … but only those who have no regular income and happen to own a home above a certain value are required to contribute … while it is unlikely that a retiree/s who own/s a $3m home would have no other assets or income thus “qualifying” for your “to be paid back pension”, it does appear to be targeting a specific type of citizen. Care to explain?

I should qualify “it does appear to be targeting a specific type of citizen” … it appears to be targetting a specific type of $3m home owning citizen

Just Saying,
Whilst the suggestion above mentions $3million, I would apply no limit.

It’s not an inheritance l tax, it’s a loan scheme for retirees.

A house of any value is an asset and should be included in the assets test. Obviously the assets test should also be raised whe this happens to reflect a reasonable amount of property.

At present, retirees know they can hide their wealth in the family home to receive increased pension payments. It’s a perverse incentive to over capitalise.

And yes, my proposed scheme would target a specific type of retiree. Those with sufficient wealth to not need subsidies from the taxpayer. Exactly Luke you’re proposing for Superannuation. From your other comments, it makes no sense that you would be against it.

@chewy14
“Exactly Luke (sic – I assume you mean “like”) you’re proposing for Superannuation. From your other comments, it makes no sense that you would be against it.”
Firstly, it is not me proposing anything – it is a stated initiative on superannuation of the government … I just happen to agree with it.
Secondly, you do understand the difference between income and an assrt don’yt you?
Please show me where I actually said anyone should pay tax (or any other govt. levy) on the value of an asset. My argument all along has been to pay tax on the income generated by that asset. Which is exactly what the govt. is proposing for superannuation – up the concessional tax on the income generated by super accumulation accounts with balances over $3mil.
You on the other hand want to penalise a home owner of a particular ilk, someone claiming an age pension, whose home happens to worth $3m – even though it generates absolutely zero income.
Let’s be clear. If they have other liquidable assets/income then I wholeheartedly agree with them being used to determine income support eligibility. However, no govt. of any flavour has ever proposed “attacking” the family home for a very good reason – it would be political suicide.
“can hide their wealth in the family home to receive increased pension payments. It’s a perverse incentive to over capitalise”
I for one can’t see why anyone would want to waste money over capitalising on the family home – I’d much rather use the money on an overseas holiday (equally non-taxable), but at the end of the day, what’s the issue? Even an over capitalised house doesn’t generate any income.
Perhaps you’d like to see CGT applied to the family home? … refer to political suicide comment above, again never going to happen.

JustSaying,
You have read the other comments here and the Government’s fact sheet that they are proposing to tax unrealised capital gains with this scheme right?

That the $3million limit before facing the higher taxation will be based on the value of assets held in Super rather than the income generated from those assets right?

“You on the other hand want to penalise a home owner of a particular ilk, someone claiming an age pension, whose home happens to worth $3m – even though it generates absolutely zero income.”

Hilarious.

Imagine thinking that it’s some sort of penalty to not give multi millionaires a welfare payment paid for by other, often far poorer taxpayers.

No one would pay anything whilst they were alive, there’s no penalty, they would simply be offered a pension loan recoverable against their estate. They cant take the asset with them when they die, so whats the issue? Why should the taxpayer be funding the inheritances given to the children of wealthy retirees?

“I for one can’t see why anyone would want to waste money over capitalising on the family home –”

You’re surely not this obtuse. Financial advisers specifically give this type of advice so people can maximise their pension payments. I’ve given that advice myself many times because its so easy to do and the financial returns of doing it are so high. It’s not remotely a “waste” when done smartly.

“Perhaps you’d like to see CGT applied to the family home?”

My suggestion does not change any taxes so i’m not sure where you’re going with this suggestion. My scheme changes the eligibility criteria for a welfare payment.

Although I do agree it’s unlikely to happen because of the politics. Far too many self interested people squeal when you threaten to take away their rorts.

Very strange that you are against expecting objectively wealthy people to fund their own retirements.

I should also say that one of the other significant downsides to not including the value of the family home in the pension assets test is that it provides a significant disincentive for retirees to downsize and move into more more suitable accommodation as they age. This is because of the impact it has on pension payments when they free up capital.

Bob the impala4:14 pm 11 Mar 23

Reading 3rd party information, it appears that unrealised capital gains on values above $3M will be taxed in Super. That has implications for other tax options.

As with all reform these days, all that seems achievable is nonsense tinkering around the edges, rather than a comprehensive approach to improving the overall quality of the system.

I have no issue with winding back of overly generous concessions within the superannuation system – it should not be a vehicle for effectively tax minimisation at the point when someone has vastly more than they actually need in the system to fund a more than comfortable retirement.

But instead of constantly tinkering at the edges, it would be nice for comprehensive taxation reform to be undertaken. We need a simplified taxation system, ideally with lower tax rates, but combined with the removal of a swathe of ridiculous deductions and distortions that do little bar allow a range of people and entities to effectively pay very little tax.

Do it once – do it properly. But that would require a grown up discussion wouldn’t it? Something neither side of politics is capable of, and absolutely hamstrung by a media desperate to turn any reform into a mud slinging exercise of the most gigantic proportions.

“As with all reform these days, all that seems achievable is nonsense tinkering around the edges, rather than a comprehensive approach to improving the overall quality of the system.”
Spot on, JS9 … unfortunately the modern approach by governments (of all flavours) is to get re-elected in 3 years, and as such, none of them have the “courage” to undertake such an overhaul. Plus the opposition of the day would opt for wedging of the electorate rather than bipartisanship.

Billy Monfries9:05 am 08 Mar 23

Class warfare. An overspending and lost government seeking to punish people who work hard, take career risks, and set themselves up with savings. The Labor-Greens take on this is to punish people who are already the lowest impact on society, in order to drip feed their waste and handouts to people who simply do not want to apply themselves. A helping hand is for those in need, a handout is for the self victimised.

Seriously, Bill Monfries? Your absurd ‘class warfare’ stance, in defence of those receiving ridiculously generous tax concessions on their extraordinarily excessive super holdings, is over the top in its incredulity. Nevertheless you managed to outdo yourself with your “… helping hand is for those in need …” comment.
So these poor destitute individuals with super account balances over $3 million (including one with an eye watering $544 million balance) are in need of a helping hand? Whereas those who are facing hard times and are forced to rely on Centrelink assistance are ‘self victimised … who don’t want to apply themselves.’
Definitely ‘class warfare’ – but it’s on your part. You wouldn’t happen to be one of 0.5% of Australians affected by the proposed change to super concessions would you?

Billy Monfries6:50 pm 08 Mar 23

All your response translates to is; ‘I despise wealthy people, despite the fact that they have overwhelmingly worked very hard to become financially independent. I would have thought North Korea may be a better place of residence for you? No I’m not affected, in fact I make less than 6 figures. What is evident is your desire to interfere into the lives of others. Shouldn’t you on your crusade look at the billions wasted, particularly by politicians of your persuasion? Perhaps you could relocate to Alice Springs rather than North Korea? That way you can enjoy the riches of the black hole welfare system.

@Bill Monfries
Hmmmm where does one start to address such a nonsensical blithering rant? I guess it’s just a matter of accepting that some are just so entrenched in their political idealism they can’t recognise good government fiscal policy.
Why did you target Alice Springs, specifically, as providing “… the riches of the black hole welfare system.”? Is it because Alice Springs has a high proportion of indigenous people?

I welcome these changes as a step in the right direction. More must be done to shift the heavy tax burden on middle Australia on to those who should be footing the bill. Thanks to Howard we have a regressive tax system where the poor subsidies the rich. This feudalism has created this unter generational inequity. I’m one of the beneficiaries of this rotten system yet even I think it’s gone too far. More balance please!

Hmm…creeping Communism from a lefty govt…who would have thorught….its another ealth tax by another name.

Then it will be 2 million, then 1 million….\

And the weirds in the W*F say “you will own nothing and be happy”…..yep, because thier lapdog govts have stolen it from you…….

Here is my prediction – given that our Super appears to have been set up as a “honey pot” to be raided – back in the 1930s, the US Govt forced everyone to put thier gold in Fort Knox. Then stole it – people never got it back. Look it up, historic fact.

Now……Australians forced to put all thier money in super…..a big fat honey pot to fund the next war…or other calamity…..

One never knows with govts, expecially ones who would coerce people to take an untested medical procedure under the threat of being unemployed.

Trust – what trust. Its gone. The day they showed thier true colours during covid , was the day they lost the public trust forever.

Can you trust any govt – no.

Smart people know this.

And Mods, even if you dont publich this – you what I’m saying is true. FYI, WW3 has already started. If you dont own gold and silver, it may be too late….the dollar will collapse.

Capital Retro7:05 am 06 Mar 23

You can’t eat gold and silver. Whisky is a much better wealth store.

@stevew77
“Can you trust any govt – no.” You forgot to add “… because they’ve been overtaken by a master race of aliens who have been progressively infiltrating the human race since {I’ll leave it to you to enter the date}.”

Capital Retro3:50 pm 06 Mar 23

I see you have already hit the wealth sore whiskey, JS.

Tom Worthington1:58 pm 05 Mar 23

Might as well cap tax exemptions and benefits on the family home at $3M as well. So if you applied for the aged pension, the first $3M of the value of your home would not count as an asset, but anything over that would.

Tom, who says your house is worth $3m if you bought it 30 years ago for considerably less?

The elephant in the room is that the NDIS is the sole program putting the biggest hole in current and future budgets. No amount of taxing the rich is ever going to fix that. We need to seriously consider scaling it back or privately fund it (i.e. charge a higher Medicare levy on those with higher BMI or increased risk factors such as smoking, drinking addictions, etc.) as these will be the people most reliant on it in the future.

Capital Retro7:48 pm 05 Mar 23

And who gave us the (unfunded) NDIS?

@Sam Oak
You really are an interesting paradox, Sam. You profess to have Christian values – especially on pro-choice matters, yet you display completely non-Christian values when it comes to schemes for the less fortunate such as NDIS … oh and you want the government to partially fund any donations you make to charity.
I’m reminded of Luke 10: 25-37 … I think you would be perfectly cast as the priest or Levite.

JS, the Bible also teaches us not to waste our talents. Ironic that the servant bestowed the fewest talents was the one that squandered it in the parable.

Yes, Sam Oak, a canny, talented individual such as yourself, would have invoiced the victim for time spent in tending to his injuries and for the oil and wine used to cleanse, and the bandages used to bind, his wounds. Then you would have claimed a tax concession from the government for your “charitable” expenditure in providing accommodation to the man at the inn so he could recover.
What gall, of the man on his way to Jericho, to accept assistance from a lowly untalented Samaritan rather than wait for aid from a supremely superior talent such as yourself.

Capital Retro9:24 am 08 Mar 23

Who gave us the NDIS, JS?

Labor instituted the NDIS and the Coalition maintained it for 10 years, Capital Retro. Do you actually have a point to make?

Capital Retro9:21 pm 09 Mar 23

It was unfunded and still is. Full of rorts. Definitely a Labor scheme.

@Capital Retro
Yes a Labor scheme, which the conservatives had 10 years of government to fix and they did nothing … perhaps they didn’t think it was that bad?

I’m beginning to think that Treasury “modelling” is undertaken by a work experience kid and an excel spreadsheet

This article comes across as a very biased rant spruiking yet another Labor attack on our savings in super, savings that we were encouraged to lock up and grow for our own future needs. Curiously the rant ignores an unprecedented change in taxation. The taxation of unrealised capital gains is the shock. Many investors currently use their SMSF to hold growth assets with realised capital gains bumped far into the future, when the asset is eventually sold. But to propose taxing unrealised capital gains, being the assessed current value of the assets, shares or property, held in super is wrong because it potentially means having to sell assets to cover tax and remove assets from super supposed to cover our future retirement needs. Imagine too if the Labor plan to tax unrealised capital gains
in super was extended more broadly to assets held outside of super. That is why it should be opposed by all.

Yes absolutely Acton. And I will point out that there are elements in the taxation system that already current tax unrealised capital gains. For example land taxes and rates in the ACT are a fixed percentage based on a 5 year average of an arbitrary valuation of one’s unimproved land value regardless of how long you’ve owned it. That’s ridiculous!

Acton,
Where are you getting that the proposed changes will result in taxing unrealised capital gains?

Have you got a link, all I’ve seen is that the proposal will double the current generous treatment even for capital gains, so those with over $3million would end up paying a *whopping* 20% tax on their capital gains when realised?

Oh the humanity.

Capital Retro7:35 am 06 Mar 23

Good grief! It’s a work creation scheme for the financial accounting industry.

All this to soak a few hundred people? Typical Labor – they lose sight of the big picture all the time.

Interesting Acton,
I think they would be better off just putting a hard $3million dollar cap on Super if these are the rules that they actually go with.

Because under those rules, they are just further complicating the system and will force people to remove assets from SMSFs, (which is probably deliberate).

lol the consultancy fee probably cost the government more than the money they could recoup on earnings from $3mil balances.

HiddenDragon8:20 pm 04 Mar 23

“The Treasurer, who also had wanted the Stage 3 tax cuts up for debate before being shut down by Prime Minister Anthony Albanese….”

We’ll know it’s getting serious when Chalmers starts muttering to his media fan club about the Manchu Court.

In the meantime, it is very entertaining to see the latte socialist twits in the Teal seats, and other gentrified electorates which have gone Labor or Green, discover so early in the term of this government that there are limits to having your cake and eating it too.

Somewhat closer to home, a similar rude awakening may be in store for Canberra when the expenditure (not just the “tax expenditure”) side of the federal Budget ledger comes under the microscope.

What is damning is that 20% of taxpayers account for more than 60% of all tax revenue collected by the government and half of those submitting a tax return don’t earn enough to pay any tax. Let that sink in! If you include children and those that don’t need to submit a return that is more than HALF the population that doesn’t contribute to society.

And while the rest of us do all the heavy lifting paying for essential services such as public health, education, infrastructure and the like for HALF of Australians who contribute nothing at all the government is increasingly blaming us for being greedy. And retrospectively mind you as we were smart enough to make use of the tax system to minimise our huge burden which is a reasonable thing to do. All while any reasonable attempt to claw back money from welfare cheats overpaid through non-disclosure of their circumstances a la Robodebt is immediately condemned for harrassing our poor non-contributing members of society!

You actually think that the only way to contribute to society is by paying high taxes because you earn so much? Do you realise that many of those who don’t earn enough to pay much in tax are volunteers and give a whole lot of their time, work and effort to society at no charge?

Many of the carers for the sick, elderly and disabled are family or friends who do it for love and are not paid for their work despite the long hours, the emotional exhaustion and lack of holidays or rest breaks themselves.

Contributing a small amount of your income is much easier, so it might be smart to get off your self-made pedestal and consider all of the ways that people contribute to society. It’s not just about money, which you seem not to have worked out yet. Perhaps you will mature and become wiser.

@Sam Oak “… while the rest of us do all the heavy lifting … ”
Just because your “welfare cheque” is written by ATO, via your tax minimalisation (read = avoidance) schemes and not Centrelink, Sam, it doesn’t mean you aren’t in the same boat as those legally claiming welfare. You say you are a heavy lifter – I say BS … you look at every avenue available to avoid doing heavy lifting – i.e. paying tax at the same rate as ordinary everyday PAYG Australians.
As for Robodebt being a “… reasonable attempt to claw back money from welfare cheats”? Well as usual you never let the truth get in the way of your outrageous conservative rant. It was declared illegal by the Federal Court of Australia, resulting in a settlement worth at least A$1.8 billion.
Save the sanctimonious outrage for those who are gullible enough to think you are philanthropically contributing to society.

Bob the impala3:54 pm 04 Mar 23

I commend Sam Oak for noticing the concept of progressive taxation, although the claimed guilt of children as non-taxpayers, included among supposed non-contributors, is something only a therapist might understand.

I see your solution Sam Oak. All those not paying net tax should cease work at once. If there is no contribution to society, there will be no impact.

Capital Retro4:52 pm 04 Mar 23

That half of Australians that contribute no taxes all vote Labor. It’s a key socialist principle to get people to be reliant on government and it makes it easy for the government to control them.

Meanwhile , all the politicians are showered with tax minimized concessions, especially in retirement.

Anyone going to defend that?

devils_advocate5:23 pm 04 Mar 23

“If you include children and those that don’t need to submit a return that is more than HALF the population that doesn’t contribute to society.”

Lmao

Yes by all means let’s return the children to the coal mines and have the elderly and infirm enrolled into hard labour

/s

@psycho, we all know you like to pontificate your left wing manifesto but that is absurdly ignorant of my or any taxpayer’s personal situation. Imagine a society where there are just carers and the infirm, do you think such a society is sustainable? The carers are working oh so hard but the economy is not producing anything. Who is growing food, building homes, running essential services?

I have two young children and elderly parents which take up a lot of my time to look after but I ALSO work full time. And you know what? You don’t hear me complaining about it. I’m not denying that the unpaid volunteers do a good job but there are others like me doing their unpaid domestic duties as well as contributing to the economy through gainful employment. If you think I just sit around comfortably all day as a cash cow earning passive income with a portion of it siphoned off to pay the pensions, jobseeker and NDIS for others you are wildly delusional.

JS, you don’t seem to understand the concept of a tax “return”. If a cashier gives you change it’s because you overpaid for the good or service and not because they are handing you a “welfare cheque”. I’m in a complex tax situation where I own my own business, own investment properties and shares and also have a SMSF. There are different taxation rates I have to consider such as the corporate tax rate, my income tax bracket, any profit or losses on my investments, taxes on superannuation contributions as well as any CGT events in any given financial year. Unless I had rocks in my head why would anyone in my position pay any more tax than they have to? And why am I seen to be somehow gaming the system?

As to your second point, so you think there are no welfare cheats in this country? You think it is fair that someone can lie about their domestic situation to get more money from the government than what has been agreed while I on the other hand, whilst being completely truthful about my tax situation, can’t make reasonable attempts to reduce my tax bill based on the agreed rules?

@Capital Retro
“That half of Australians that contribute no taxes all vote Labor.” Really? Where are your facts to support this, CR?
I don’t have any facts to dispute your claim, but I would suggest that a lot of the ‘sovereign citizens’ and other muppets who travelled, and still travel, to Canberra, to protest against COVID action and government in general, pay no taxes … and I doubt that they vote Labor.

@Sam Oak
“If a cashier gives you change it’s because you overpaid for the good or service”
A ridiculous analogy, but I’ll play your game, Sam. You paid the full agreed price – you didn’t say to that cashier ‘Oh by the way, you owe me more change than the price you’ve charged because I’ve found a loop hole.” or are you also always trying to find ways to pay less than the asking price on everything you buy? (PS Discounts are applied/negotiated before the sale – not after).

“And why am I seen to be somehow gaming the system?”
You put yourself in the ‘heavy lifting category’ yet you freely admit that you are always finding ways to avoid paying tax … the heavy lifters are those almost 37% of middle income earners ($90k – $180k) who go to work, get their salary and pay their tax according to their income. You on the other hand are milking the system for all you can get. Which I accept is legal – but don’t put yourself in the same category as those, who while they may be doing it tough ($90k is hardly a princely salary nowadays), just pay their due.

I agree that there are welfare cheats and dole bludgers – just as there are tax cheats. Unlike you I believe the majority of welfare recipients do so in good faith. Just because they are unable to get a job doesn’t automatically make them a cheat.

You probably do play by the rules – given the size of the national debt, some of us would like to see those rules changed to close the many loop holes open to tax avoiders.

Sam Oak, you’re demonstrating your own ignorance I’m afraid. Time to catch up with the modern world and face reality. Left wing and right wing are no longer descriptive of anything useful. The world is much more complex today than your simplistic arguments suggest.

Additionally, labelling me as left wing demonstrates your complete ignorance of me and my views, but then you’re making incorrect assumptions based on personal belief rather than facts.

Your name-calling and accusations demonstrate your lack of evidence for your point and poor skills in both logic and communication. Not smart.

I commend you on looking after your family and working full time. Some people are not lucky enough to have the opportunity to do either, often for reasons beyond their control. Compassion for them rather than attacks on their ‘lack of contribution’ would be more humane.

“A ridiculous analogy, but I’ll play your game, Sam. You paid the full agreed price… are you also always trying to find ways to pay less than the asking price on everything you buy? (PS Discounts are applied/negotiated before the sale – not after).”
That’s absurd. So if I donate to charity I’ve agreed to forgo the full amount and therefore I’m not allowed to claim a deduction to reduce my taxable income?

@Sam Oak “So if I donate to charity I’ve agreed to forgo the full amount and therefore I’m not allowed to claim a deduction to reduce my taxable income?”
Absolutely you shouldn’t be able to claim a deduction. So you pat yourself on the back for making a charitable donation … and then you expect the government to give you a hand out for making that donation?

“you expect the government to give you a hand out for making that donation?” Absolutely I do. Because it was agreed beforehand that I could. If I wasn’t allowed to do that I’d donate exactly 37% less or whatever my marginal tax rate is. The difference between the rich and poor is that one doesn’t live beyond their means and throw away money willy nilly. They know exactly how much they can spend/invest/donate based on the agreed rules.

Capital Retro1:31 pm 06 Mar 23

Are you calling First Nations people muppets, JS?

Capital Retro3:51 pm 06 Mar 23

….and drink whiskey?

I don’t look at a person’s heritage, CR, I look at their actions. So if someone is blocking Federation Mall and abusing people going about their normal day then I call them a muppet. Why? Does a person’s heritage affect how you view them?

Why do you think that only people that supposedly pay a lot of tax do the heavy lifting in society? Workers earning close to or at minimum wage do their fair part of the lifting, yet get paid a tiny fraction of what their CEO, management and board members make. How can society operate without shelf stackers, waitering staff, childcare workers, farm workers and so on, ensuring that everyone else in society can make careers or have so much capital invested that they can live on passive income? These workers won’t be able to save up for a decent syper or be able to afford a decent private healthcare.
Taxing the very rich is unfortunately a plaster on the wound. Ideally the difference between the maximum and mininum salaries should be reduced orders of magnitude. Does a CEO of a large business really contribute multiple life times of work of an average worker in a year? Their salary indicates that they apparently do…
In the mean time, increasing taxes to reasonable rates for people who store a significant amount of wealth in super allows for some redistribution and equity in society.

devils_advocate1:04 pm 04 Mar 23

For those not in the know, Treasury “modelling” assumes no change in behaviour. It “models” taxes as if the labour/capital stays put and just the tax rate changes.

When in fact we all know taxes distort behaviours (often in quantifiable ways).

Would have thought a net capital importer like Australia would be careful stiffing the big end of town when we are talking dedicated investment funds but anyway let’s see how this plays out, cotton.

Exactly devils advocate, people don’t seem to have heard of the Laffer Curve. Mess around with the taxation rates and you will see the money flowing offshore into tax havens and then let’s see how those reliant on government handouts will fare.

So Sam, you’d be happy to pay tax based on the Laffer Curve then?
In 2017, Jacob Lundberg of the Uppsala University estimated Laffer curves for 27 OECD countries, with top income-tax rates maximising tax revenue ranging from 60% to 76%.

Provide a link to the research paper. I’m not interested in someone’s honours thesis. I don’t believe that you can draw valid conclusions equalising tax systems across 27 countries. All I know is if 3/4 of my income went straight to the government I’d quit my job and live like a bum like the rest of the woke crowd.

@Sam Oak
Gladly, Sam – http://www.lisdatacenter.org/wps/liswps/711.pdf … oh and here’s a link to Dr Lundberg’s website – which outlines his very impressive qualifications as an economist specializing in taxation.

Oooops … premature submission … here’s the link to Dr Lundberg’s page, Sam – http://www.jacoblundberg.se/p/about-me.html

For some reason, Sam, the moderator rejected my follow-up post with link to Dr Lundberg’s website … here it is: http://www.jacoblundberg.se/p/about-me.html

JS, let’s pretend for a second the guy you are referencing is remotely credible (I’d never heard of him and would rather believe modelling from the Fed Reserve, RBA or the Treasury). The critical flaw in his analysis is that he assumes a closed economy (you can either choose to work or not with no other options). However in reality if you chose to tax anyone anywhere near those rates, they’d move to a tax haven country which is my argument.

Already Australia is suffering from brain drain with any homegrown entrepreneurs preferring to move to the US or the UK than starting a business here. However we’ve become a haven for dole bludgers and welfare recipients. Why else would so many refugees be risking life and limb to enter the country? Migrants are making up their qualifications to get on the skilled migration list. All of them will go straight onto the dole as soon as they step off the boat or plane. All without being able to string together a coherent sentence in English.

“… homegrown entrepreneurs preferring to move to the US or the UK than starting a business here.” Let me guess, Sam, you haven’t moved there because the tax concessions are nowhere near as attractive as in Australia?

You do have to laugh when people talk about restoring a “fairer” tax system with an assumption that what they believe is “fair” is objective and universal.

At least the first point of call with the tax system is recognising that the vast majority of tax is paid by wealthier and higher income people.

Is that “fair”?

And is the breakdown of taxation based on Labor and Capital similarly “fair”?

Whilst there is plenty of reasonable scope to cut back on a number of taxation concessions, there is similarly reasonable scope to cut back on the bloated and increasing expenditure. Expenditure that is often based on purely political reasons rather than solid policy backing.

And despite the authors wish to deride the stage 3 tax cuts, how is it “fair” to tax an ever increasing amount of people’s income by the stealth tax of bracket creep? Its not in any way generous to give taxpayers back their own money that should never have been taken in the first place.

Bring in indexation of the brackets and then we might be able to talk. But we all know that no political party will be suggesting that and we all know exactly why.

A fairer superannuation system does not include politicians

Capital Retro4:53 pm 04 Mar 23

There are some treated more fairer than others.

GrumpyGrandpa10:05 pm 03 Mar 23

Up front, can I say that I don’t have any real objections to the changes to Super, other than the Government’s perceived lack of credibility.

When you go to an election the Australian people should be able to trust what politicians promise.

For the article’s author to state that “Former Labor leader Bill Shorten fell foul of the Murdoch megaphone at the previous election when his sensible but too-detailed reform program….” Well, whether Shorten’s programs were sensible I think is pretty doubtful. To me Shorten’s policies appeared chaotic and made on the run. EG, Shorten’s flip-flop changes to Imputation Credits. Originally, his policy was that only taxpayers could claim the credits. Then when centrelink pensioners complained, they were exempted, but he still intended to cut the credits from self-funded pensioners; hardly equitable.

Australians knew what Shorten intended to deliver and voted against his policies.

To suggest, that Shorten would have been better to hide his policy detail or deceive Australians, is deplorable.

Albo has hidden the detail of “The Voice”! I won’t be supporting it. Tell me the details Albo.

Telling truth and letting Australians make an informed decision; isn’t that a fair expectation?

Bob the impala9:28 am 04 Mar 23

Telling truth, informing Australians, not deceive Australians, a fair expectation.
See: Stuart Robert.

Still, what’s the matter with unlawful raising of debts with reversed onus of proof, a few suicides, compared with the importance of preserving inheritance streams among the wealthiest?

GrumpyGrandpa6:55 pm 09 Mar 23

Bob the impala,

From your comments I feel that you might believe that I praise all things LNP. Let me clarify that for you.

Robodebt was one of the most inexcusable, ill-considered, idiotic schemes that a government of any persuasion has introduced. That said, and without defending it, the LNP government of the day didn’t control the Senate, so support was required from the cross benches for Robodebt to even exist.

GrumpyGrandpa6:58 pm 09 Mar 23

Bob the impala,

I’m not an LNP stooge.

Robodebt was disgraceful. And without defending it at all, the government of the day didn’t control the Senate, so this rubbish was also endorsed by the cross benches.

Capital Retro9:17 pm 03 Mar 23

What isn’t being reported is that these increases in tax only affect funds in the accumulation stage. Clearly the “expert commentators” are only focused on a perceived class distinction.

Funds in pension mode, no matter what the balance, are not taxed. There are no special concessions that are extended only to SMSFs either including the tax free “downsizing contribution”.

Bob the impala9:41 am 04 Mar 23

A fine piece of equivocation, Capital Retro.

The maximum balance available for pension mode (tax free) is $1.7M today, soon to be $1.9M.

Income on the fund proportion from the tax-free cap to $3M will continue to be taxed at 15%. Income on the proportion above $3M will be taxed at 30%. This is the proposal, and well reported.

How is your class war going?

Philip Creagh2:28 pm 03 Mar 23

If Labor had gone to the 2022 election stating that they would increase the tax on super funds with more than $3million that would have been a wise move.

However some voters would have voted for Labor after their pre-election promises that they would NOT change super rules if they were voted into Government. In the first term I believe you have to wear your pre-election promises (Labor or Coalition). Clearly Labor did not.

The amount Labor will save is small, compared to the virtue signalling that appears to have sucked in the media, Greens and Pocock.

@Philip Creagh Welcome to politics a la John Howard – he of the “core/non-core policy” persuasion. So you actually think those at the very, very high end of town, with over $3 million in super holdings, voted Labor after hearing that they wouldn’t touch super. They have held their promise for 99.5% of superannuation holders. In so doing, they have also closed a $1 billion loop hole for those whose super portfolio, based on a relatively conservative return over the last 10 years, is earning income of over $240,000 p.a. Definitely falls into the non-core promise for me and I can live with that.

Just Saying,
The policy is reasonable but you can’t possibly suggest that it’s reasonable for politicians to lie before an election about their policy platforms?

And that if the changed position only affects a small minority of people that’s its OK.

chewy14
I’m not suggesting anything.
I’m just stating that the tradition of politicians “lying” before an election was entrenched by Howard with his “core and non-core promises” defence. The fact that this (IMHO) fiscally responsible “lie” only affects a small minority of people is a bonus.

Definitely fiscally responsible, and definitely not a lie. The measure will only be introduced by the ALP if they win the next election i.e. they are taking their proposal to the next election. Their promise not to introduce changes to superannuation at the last election has not been broken.

Before the election Chalmers said there’d be no major changes to superannuation. This is not a major change. Albanese said that he didn’t have any intention of targeting superannuation for changes. That was almost a year ago and before the massive debt accrued by the LNP was known.

It was also before we all became aware of the many things that had been underfunded, starved of funds or cut off from funding completely, resulting in low levels of government services in so very many areas. Things need to be fixed and that requires funds from somewhere given the massive costs of financing the LNP debt. So much for them being responsible economic managers.

This minor change to superannuation does not affect what capital is already saved, just the future earnings on a portion of it, only that portion above $3million. No-one is going to be harmed by this, whilst currently employees earning low incomes are funding this tax concession for the wealthy. How is that right?

Justsaying,
The idea that politicians lying before elections started or was entrenched by Howard is laughable.

You said you “can live with it”, so you are definitely saying you’re OK with the behaviour.

Pretty hypocritical if you ask me.

Griffith and Psycho,

That’s some mighty spin you’ve got going there.

I get it, you’re OK with politicians lying to the electorate as long as you support the policy changes. There’s no harm in owning your position and being honest with it.

How is it spin Chewy ? Are the proposed changes being implemented before the next election ? Answer: No. So what promise has been broken ?

@chewy14
As I said, Howard was the first leader to actually come out and admit he lied before the election with his ‘famous’ core and non-core policies retort … it’s entrenched because it’s now used by all politicians in one form or another to justify back flipping.
I can live with it because sometimes there are good and sound reasons for politicians to change their previous held position … maybe the error is that they could have thought it through before making such an all encompassing statement. Such as John Howard’s claim he would never introduce a GST, but knowing all the while it was a very good tax reform initiative – and the rest as they say is history.
How does that make me a hypocrite.

Griffite,
They are voting on the laws in this parliament, which is a function of how people voted at the last election, not the next one.

No one can know what policy debates will dominate the next election, we don’t vote on single issues. The fact that they won’t come into force before the next election is irrelevant.

It is pure spin to claim it isn’t a broken promise.

JustSaying,
You know that Howard never admitted to lying, he did exactly what other politicians have done since we’ve had politicians, he attempted to rationalise the policy changes with his “core and non core” promises” line. The same type of spin the ALP are now using on these changes.

I too am OK with politicians changing their mind when conditions require it, but nothing has fundamentally changed here, the ALP are just going for a cheap money grab.

@chewy14
I’m still waiting for an explanation on how I was being hypocritical above – but nevertheless who’s the hypocrite?
chewy14 – 11:28 am 04 Mar 23: “The policy is reasonable …”
chewy14 – 8:32 pm 05 Mar 23: “… the ALP are just going for a cheap money grab.”
Hmmm – no doubt you’ll have you own spin on how these too comments are not contradictory.

I’m only saying Howard lied, because it was you who introduced the terminology when you inferred I had suggested it was “… reasonable for politicians to lie before an election about their policy platforms.” I had stated that for me the Labor change of heart on super was merely a non-core policy change. Even you admitted that was OK “… when conditions require it.” – I believe this is a good case of conditions requiring it.

JustSaying,
I’m happy to say you are not a hypocrite if you are now saying that you are OK with politicians, including Howard changing their policies post election on issues like this, which you seemed to have confirmed. From your first comment, it seemed that you were saying it was bad when Howard did it but was now OK.

I think they are both bad BTW.

“chewy14 – 11:28 am 04 Mar 23: “The policy is reasonable …”
chewy14 – 8:32 pm 05 Mar 23: “… the ALP are just going for a cheap money grab.””

How is it hypocritical?

I think policies to cap superannuation benefits are reasonable but the motivation from the ALP to make these changes to their policy platform now 1 year after saying they wouldn’t make changes is mainly around a cheap money grab. As opposed to a thoughtful and deliberate reform of the system. Both can equally be true. Good policy often has ulterior motivation.

“Even you admitted that was OK “… when conditions require it.” – I believe this is a good case of conditions requiring it.”

This is the point though, absolutely nothing has changed in the last year that would require this action. There’s no immediate need, no major information or data that has changed since the ALP formed their policy platform. What do you think has changed that needs immediate action and couldn’t be taken to the next election as a new policy?

@chewy14
I owe you an apology – I credited you with the ability to read.

I never said “… it was bad when Howard did it …” I merely stated a fact – Howard is ‘of the “core/non-core policy” persuasion’. If you choose to read something else into it that’s on you not me.

You accept that capping superannuation benefits are reasonable, but when Labor flags the introduction of such a cap you question the motivation and say it’s a ‘cheap money grab’. I’d hardly call a $1 billion tightening of the concessions cheap. Partial reform of the generous tax concessions on offer is better than no reform.

“What do you think has changed that needs immediate action and couldn’t be taken to the next election as a new policy?” I’m actually disappointed that Labor has flagged that any legislated changes will not kick in until 2025/26. Given the size of the national debt that the Conservatives have racked up, I’d like to see action to reduce it sooner rather than later. In a way, Labor is taking it to the next election … plenty of time for the conservatives to repeal the legislation to protect the interests of their high end of town mates, IF they are successful at the next election.

JS,
“You accept that capping superannuation benefits are reasonable, but when Labor flags the introduction of such a cap you question the motivation and say it’s a ‘cheap money grab’.”

Of course I do. It was literally flagged as a thought bubble on what changes could be made, then a “conversation”, then a defined ALP policy that they want to legislate in this parliament. All within a week.

It clearly wasn’t a well thought out and consulted on policy reform and the obvious motivation is both immediate political benefit and quick revenue.

“Given the size of the national debt that the Conservatives have racked up, I’d like to see action to reduce it sooner rather than later.”

All of our major political parties are responsible for the state of our government finances. Expenditure has massively increased under all governments in recent decades with structural deficits locked in and reasonable spending cuts and taxation reforms opposed constantly. Mainly for cheap political points.

But also strange that you attack me for not reading then don’t answer the straightforward question asked of you.

“What do you think has changed that needs immediate action and couldn’t be taken to the next election as a new policy?”

What conditions have changed? The fiscal position was known before the election and has actually improved since the election due to global factors.

And saying that the changes won’t come in until after the next election is just spin. This parliament exists on the mandate given at the last election, it’s a broken promise as you yourself already admitted. You know, when you compared them to Howard?

I get it, you like the policy so you don’t mind how it comes in. I disagree and would prefer to hold our politicians to a higher standard.

Because it’s only a matter of time until other politicians are in power and suggesting new post election policy changes that you don’t agree with.

@chewy14
“Because it’s only a matter of time until other politicians are in power and suggesting new post election policy changes that you don’t agree with.”
In the meantime I’ll take great joy in the Labor party forging ahead with legislation that you don’t like … especially when it is a sound policy that you just can’t admit is good because it’s from Labor.

JustSaying,
Nice deflection to avoid answering the question again. It’s obvious why.

I’ve already said i support placing further restrictions on taxpayer concessions for Superannuation, although there is still detail to be worked through on the mechanisms and areas like indexation of limits.

And if they took it to the election, I would support it, the same way I supported the ALP policy changes around negative gearing and franking credits that they took to the 2019 election. Your point fails totally.

As above,
“I get it, you like the policy so you don’t mind how it comes in. I disagree and would prefer to hold our politicians to a higher standard.”

Tax reform is long overdue – TRUE
a constituency of rent seekers has been built – TRUE
those who will be affected are using an overly generous super system as a tax shelter and wealth generator – TRUE
Australia is reaping a terrible harvest from policies that have favoured the well-off and entrenched inequity – TRUE

Well said Ian, one of your best.

Capital Retro6:15 am 04 Mar 23

Why have you omitted to state that the greatest rort of all is the old Parliamentary defined benefit (non-contributory) pension scheme which PM Albanese stands to collect $10 million of taxpayers’ money from?

“……well-off and entrenched inequity” and also exempted from Chalmers tax grab.

Absolutely TRUE.

Capital Retro,
How is the defined benefits scheme a “rort”?

Also noting that hundreds of thousands of public servants are in the same schemes, so it isn’t specifically around politicians of all parties who were on those schemes prior to them being closed in 2005.

Those employees signed up to jobs with specific pension provisions that were not hidden in the slightest. Sure they were generous but that’s not remotely close to equalling a “rort”.

@CapitalRetro
While I do not deny that the old MP and public service ‘defined benefit’ schemes were very generous, there’s a major factual error in your comment.
You say the scheme was non-contributory – well check out “Part IV – Contributions” of the “Parliamentary Contributory Superannuation Act 1948” (https://www.legislation.gov.au/Details/C2020C00052).
… and as Chewy14 said – it’s not a rort if that was the (only) super scheme available at the time.

I wouldn’t label the defined benefits system a rort either even though I’ve never been a public servant but this just highlights the massive double standard of the left. You can’t call one set of rules fair yet label capital gains or negative gearing a “rort”. You just got exposed as hypocrites who only support policies that favour your own personal situation. LOL

Sam Oak,
I’ve never been a public servant or in a defined benefits scheme either. I receive no personal benefit from the existence of those schemes.

But your analogy isn’t really apt.

Public Servants and politicians in those schemes signed up to the “only” retirement scheme available to them. It was part of their employment package, when they signed up to their job. It was clearly too generous long term which is why those schemes were closed.

Whereas the examples of CGT reduction and negative gearing you provide are policies that were actively lobbied for, exploited and now aggressively protected by people who want to minimise their tax, rather than for solid policy reasons.

I don’t blame people for operating within the current rules, but that doesn’t mean we shouldn’t look to change those rules where they don’t make sense.

Capital Retro3:47 pm 06 Mar 23

You are correct chewy; I should have said “exclusive to the PS” rort.

devils_advocate8:29 am 03 Mar 23

The tax policy debate in this country is so cucked that anything below confiscation of 47% of a person’s labour is viewed as a “concession”

But we have to be fair and also increase taxes on defined benefit pensions from 1 July 2025 as well or Canberrans will look a bit hypocritical. The equivalent for a defined benefit pension is that anyone receiving a yearly defined benefit pension greater than $187,500 (using the “rule of 16” or $3m/16 brought in in 2017 to estimate the assets backing defined benefit funds) should pay tax at 30% on any amount above $187,500, rather than 15% (which currently applies to amounts paid above about $118k a year)

Capital Retro10:02 am 05 Mar 23

Their franked dividends would take care of that.

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