Labors Super changes

[Home Alone]

This is good for a laugh.

Barefoot reveals median super balance of average Aussie

What’s the Labor Government doing attacking the little nest eggs of ordinary Australians?

www.perthnow.com.au

"leave a tidy nest egg for her kids"

This is not the purpose of Superannuation tax concessions. And to have an excess balance, this is exactly what you are doing. No, it isn't a death tax by stealth (before anyone claims it is)

 

[peetoo]

Downsizer is intended to top up low balances on the sale of the primary residence. Not sure why we are concerned about people toppin up high balances.

Good point. The incentive is less incentive now though. As long as you have cashflow your capital wealth in the prime residence is untouched (for now)

And there are ordinary houses we are talking about, not mansions. Of course there has to be downsize incentives because you are taxed when you buy the home you are going to

That’s where these discussions leave me cold. Telling us we are borderline rich but a shack near work costs millions

 

[peetoo]

This is good for a laugh.

Barefoot reveals median super balance of average Aussie

What’s the Labor Government doing attacking the little nest eggs of ordinary Australians?

www.perthnow.com.au

Advice would be to increase the investment in low returning but more stable income streams, keep it around the 3 million.

Of course there is a couple of years before it happens. Give the kids some money now, tax free

 

[Halloween Jack]

This is good for a laugh.

Barefoot reveals median super balance of average Aussie

What’s the Labor Government doing attacking the little nest eggs of ordinary Australians?

www.perthnow.com.au

This is brilliant. But I reckon he should have pointed out that if her super is just over $3mil the extra tax will be a very minimal amount, and nothing to worry about

 

[Home Alone]

Advice would be to increase the investment in low returning but more stable income streams, keep it around the 3 million.

Of course there is a couple of years before it happens. Give the kids some money now, tax free

Note to self. Peetoo might not be the best person to seek financial advice from.

 

[Kwality]

PM’s own department finds analysis of super reforms ‘insufficient’

An independent office within the department has ordered a ‘post-implementation review’ of the $3 million superannuation cap within two years of its taking effect.

www.afr.com

'The Albanese government did not complete a mandatory assessment of consequences of its proposal to double the tax on earnings in superannuation funds with balances above $3 million, the Prime Minister’s own department has found.

Deeming the government’s work “insufficient” – the lowest rating available – the Office of Impact Analysis has ordered a “post-implementation review” of the policy within two years of the contentious change taking effect.'

A replay of the Shorten franking tax debacle - the same enthusiasts around a table wanting to tax the rich. Due diligence , whats that.

 

[peetoo]

Those people have the keenest accountants helping them get huge balances in the first place

Once implemented the savings might pay for a box of paintbrushes on the submarines

 

[Kwality]

Those people have the keenest accountants helping them get huge balances in the first place

Once implemented the savings might pay for a box of paintbrushes on the submarines

& the net effect of any change is an item in the due diligence checklist.

 

[SBD Gonzalez]

Coalition’s super changes will affect three times as many people as Labor’s plan, modelling shows

Jim Chalmers says figures based on Treasury projections reveals opposition’s ‘deception’

www.theguardian.com

 

[peetoo]

I’m no lib fan but they are right about indexing.

Better off investing more in principle residence, so long as your super covers cash flow.

Main residence not taxed on gains, no upper limitts on value, can be used as reverse mortgage if you live longer than expected
No tax on drawdowns, but of course you pay interest

Will a lib or lab treasurer come after that too in future? It might be hard politically

 

[Crankyhawk]

I’m no lib fan but they are right about indexing.

Better off investing more in principle residence, so long as your super covers cash flow.

Main residence not taxed on gains, no upper limitts on value, can be used as reverse mortgage if you live longer than expected
No tax on drawdowns, but of course you pay interest

Will a lib or lab treasurer come after that too in future? It might be hard politically

I think it was always true that you pay off the home mortgage first before putting extra into super

 

[nut]

I’m no lib fan but they are right about indexing.

Better off investing more in principle residence, so long as your super covers cash flow.

Main residence not taxed on gains, no upper limitts on value, can be used as reverse mortgage if you live longer than expected
No tax on drawdowns, but of course you pay interest

Will a lib or lab treasurer come after that too in future? It might be hard politically

There needs to be a clear definition on what Super is!!!
Is it for wealth creation? With tax breaks?
Or is it to take pressure off the pension??
It was set up so working people could have a comfortable retirement with out needing the pension, not for high earners to avoid tax.

 

[Kwality]

I’m no lib fan but they are right about indexing.

Better off investing more in principle residence, so long as your super covers cash flow.

Main residence not taxed on gains, no upper limitts on value, can be used as reverse mortgage if you live longer than expected
No tax on drawdowns, but of course you pay interest

Will a lib or lab treasurer come after that too in future? It might be hard politically

Reality is the wealthy wont exceed the $3m going forward.

Meanwhile what is happening of those up at the trough (Albo) with the defined benefit (super) scheme ?

 

[Crankyhawk]

Reality is the wealthy wont exceed the $3m going forward.

Meanwhile what is happening of those up at the trough (Albo) with the defined benefit (super) scheme ?

um, those on higher salaries will exceed the $3m just via base payments (it includes the earnings on the super)

 

[Kwality]

um, those on higher salaries will exceed the $3m just via base payments (it includes the earnings on the super)

Salary packaging ?

 

[peetoo]

There needs to be a clear definition on what Super is!!!
Is it for wealth creation? With tax breaks?
Or is it to take pressure off the pension??
It was set up so working people could have a comfortable retirement with out needing the pension, not for high earners to avoid tax.

It works against the incentives to downsize main residence though, which was supposed to help the availability of family houses near schools. At the very least would encourage people to hang on to residence as long as possible, just get a handy person gardener in if it’s too big

In a decade or so, a 3mill house in large parts of capital cities will be bog average. We are talking about not super rich people, but wealthy enough to not need the age pension

This is why need to be careful what you define as “super rich”


Having said that, Chalmers got treasury modelling showing the coalitions 2016 restrictions affect more people over time. 30% to 10%. May be rubbery though

 

[Saint]

Those people have the keenest accountants helping them get huge balances in the first place

Once implemented the savings might pay for a box of paintbrushes on the submarines

Ultra-Rich people saying: "We're just going to find another loop-hole to avoid paying taxes." is not a reason not to close the current loop-hole. It's probably a pittance to them, the additional tax they'll pay once they restructure, but it's probably a few thousand $$ per person, and then you close the next loop-hole (franking credit refunds anyone?).

Then some numbskull will come and say there's too much red tape, slash legislation and open up all the loop-holes again.

 

[peetoo]

Ultra-Rich people saying: "We're just going to find another loop-hole to avoid paying taxes." is not a reason not to close the current loop-hole. It's probably a pittance to them, the additional tax they'll pay once they restructure, but it's probably a few thousand $$ per person, and then you close the next loop-hole (franking credit refunds anyone?).

Then some numbskull will come and say there's too much red tape, slash legislation and open up all the loop-holes again.

The loophole was already closed, current younger folk cannot amass those amounts in pension funds

 

[nut]

It works against the incentives to downsize main residence though, which was supposed to help the availability of family houses near schools. At the very least would encourage people to hang on to residence as long as possible, just get a handy person gardener in if it’s too big

In a decade or so, a 3mill house in large parts of capital cities will be bog average. We are talking about not super rich people, but wealthy enough to not need the age pension

This is why need to be careful what you define as “super rich”


Having said that, Chalmers got treasury modelling showing the coalitions 2016 restrictions affect more people over time. 30% to 10%. May be rubbery though

There are no plans to tax the family home … at 55 years old you can downsize and sell and put a max of 300k in your super.

Average wage is currently 70k a year. Pension is 30k?

3 million making a modest 5% is $150,000 year with out drawing down on your super…
I think the 3mill cap will be find for another 20-30 years.

And Soon there will be little tax advantages in putting extra in super anyway, when the stage 4 tax cuts kick in

 

[peetoo]

There are no plans to tax the family home … at 55 years old you can downsize and sell and put a max of 300k in your super.

Average wage is currently 70k a year. Pension is 30k?

3 million making a modest 5% is $150,000 year with out drawing down on your super…
I think the 3mill cap will be find for another 20-30 years.

And Soon there will be little tax advantages in putting extra in super anyway, when the stage 4 tax cuts kick in

300k each for a couple is on top of the 400k you can do in any one year. 700k each. But of course right now it’d only take you over the 3mill if it was already 2.3 mill, Which would mean you weren’t cash strapped

But as far as treasury raids go - and both sides have been tempted, the principal residence seems the safe bet.

You can also draw down on the equity while on aged pension

 

[nut]

300k each for a couple is on top of the 400k you can do in any one year. 700k each. But of course right now it’d only take you over the 3mill if it was already 2.3 mill, Which would mean you weren’t cash strapped

But as far as treasury raids go - and both sides have been tempted, the principal residence seems the safe bet.

You can also draw down on the equity while on aged pension

So super is being realigned to its original purpose … which wasn’t to create wealth through tax exemptions.
You can still put more in your super … just pay 30% tax on it.
I’m not sure why the changes are even being discussed?

 

[dockerfemme]

So super is being realigned to its original purpose … which wasn’t to create wealth through tax exemptions.
You can still put more in your super … just pay 30% tax on it.
I’m not sure why the changes are even being discussed?

I think if the method of calculation for the 30% was exactly the same as the 15%, it would not be discussed. However, the method of calculation is different and has some potential for considerable unfairness, imho. For example, if the share market goes up you pay tax on that unrealised profit. If the share market then goes down, you get a tax credit which you may never be able to use. Taxing of unrealised capital gains has never been done in Australia before and I have not seen any example of it occurring in the world.

It may be a modest change, in that it affects few people at this point, but it is not a modest change conceptually, it is a groundbreaking approach.

On top of this, there has been only lip service paid to trimming the pensions of politicians like Albo on defined benefit schemes that are far, far more generous than the situation reflected by $3 million in super. One rule for thee, one rule for me.

 

[Kwality]

Ultra-Rich people saying: "We're just going to find another loop-hole to avoid paying taxes." is not a reason not to close the current loop-hole. It's probably a pittance to them, the additional tax they'll pay once they restructure, but it's probably a few thousand $$ per person, and then you close the next loop-hole (franking credit refunds anyone?).

Then some numbskull will come and say there's too much red tape, slash legislation and open up all the loop-holes again.

Isnt the point the amount of the savings to the budget that gets trotted out ?

Closing the loophole is fair & good.
In this case the aim was to get more $s into Super & it has. Now we need to act against the unforeseen issue of wealth transfer.

Couldnt agree more with a properly researched franking credits legislation.

 

[Kwality]

So super is being realigned to its original purpose … which wasn’t to create wealth through tax exemptions.
You can still put more in your super … just pay 30% tax on it.
I’m not sure why the changes are even being discussed?

Because of what was promised.

Albo & the good doctor have recovered as best they can to address the broken promise - the question now is whether they can move on the phase 3 tax cuts as another broken promise?

 

[Home Alone]

Reality is the wealthy wont exceed the $3m going forward.

Meanwhile what is happening of those up at the trough (Albo) with the defined benefit (super) scheme ?

Yes. Those that are currently above the threshold will probably remain in super. Those that are in direct control of their funds investments and will eventually exceed the cap, will move to trust and other schemes of asset protection.