superannuation – bobmcgee

Super and Cyprus …

Let’s eat the rich …

Well let’s at least get seriously jealous and really hurt them …

After all it’s good that we let them employ people, pay lots of tax and spend money, we let them off having to live on the age pension, we don’t make them live on New Start. Cool.

Let’s raid their super … big problem, one thing that the hysterical class warriors, from Rob Oakeshott to Wayne Swan via Fairfax’s Peter Martin, seem not to realise is that for people with squillions super offers a chance to reduce tax by a paltry amount. Here’s Peter Martin …

THINK about an executive on $1 million a year. Not quite one of Joel Fitzgibbon’s “battlers”, but someone several rungs above. His or her company pays a legislated $90,000 a year into a super fund of their choice, the payment is taxed at just 15 per cent. So instead of paying $41,850 in tax, the executive pays just $13,500. The gift from the tax system is $28,350.

What a terribly wicked rich person, well no what a complete load of bollocks, once the numbers are corrected it reads …

… a legislated maximum of $17,190 per year into a super fund of his or her choice; … The gift from the tax system is $5415.

The fact is payments into super are capped therefore the capacity to lower tax is also capped at a fairly low figure. The way to raise money from super is to forget the very rich, just hit all those who’ve been diligent in saving for their retirement. Those who gambled away their income have made their contribution.

But, notice too, the reference to a gift. I have worked hard, I have provided employment to others, we have paid our taxes and contributed to our retirement funds.

SOMEONE on $300k pays about $113k a year income (little or no govt benefits) tax yet someone on $50k a year pays about $7700 income tax (plus govt benefits). The person on $300k pays 14 times more tax for six times the wage than the person on $50k. (Terry … )

If you are going to call that amount of your earnings that the taxman allows you to keep a gift the Cyprus solution starts to look reasonable.

The Squandermonkeys …

… and their accomplice.

But first the monkeys. The lie from Wayne Swan …

At the centre of our challenges we face in this year’s Budget is the huge hit to government revenues we’ve taken since the global financial crisis.

The truth can be seen at Catallaxyfiles …

Do visit that link, there are some more graphs and some of the comments are spot on. It will show you that it ain’t the income that’s the problem, it’s the expenditure. But if you are going to sustain the expenditure you have to raise the money somehow. Your superannuation looks nice. The Cypriot solution, it’s obvious.

Enter Rob Oakeshott, he thinks it’s a great idea. Remember that he will leave the Parliament (hopefully very soon and with a large boot up his arse) with a nice big super safety net, provided under a completely different scheme to ours.

I have worked hard and saved sensibly for my retirement, reforms by Keating and Costello helped, the frequent changes to the rules did not. The only way we will ever see a good superannuation system is when the pollies are under the same rules as the rest of us.

Meantime, get your hands off my super, you thieving bitch.

Oh Super …

Wayne the Wonder Swan needs to deliver a surplus. The reasons that he recited the other day seemed to be no different from the reasons recited for throwing money around like a madman just a few years ago.

Labour delivered a surplus once … 1988 as Wayne well remembers …

Nothing will stand in the way of this one, nothing …

even if enthusiasm for saving for your retirement takes a hammering. See Sally Patten & Jennifer Hewett.

“This is the most destructive thing I have seen in a long time,” said Association of Superannuation Funds of Australia chief Pauline Vamos, who fears that changes to the contributions or earnings taxes will lower the level of voluntary injections into super or, worse, encourage workers to become contractors as the 9 per cent super guarantee does not apply to the self-employed.

Financial Services Council chief executive John Brogden added his concerns. “This is neither in the interests of saving Australians nor in the national interest,” he said.

“Any savings for the budget through reducing concessions in superannuation would be far outweighed by costs borne in future budgets.

“Such changes would trade small, short-term gains for this budget for massive, long-term costs for future budgets and future generations.”

The day we get a stable and favorable super scheme will be the day that the politicians have to make do with the same rules as the rest of us.