Superannuation

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How to maximise your super

In this article, I will run through the different ways of getting money into Superannuation while you are working and in accumulation phase. Then I will show you some examples so you can really see the benefits. Boosting your super is an excellent way to save for your retirement in a tax-effective way. What I

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Labor must not lift compulsory super to 15%

The superannuation guarantee (SG) is slated to incrementally rise to 12% by mid-2025. However, Financial Services Minister Stephen Jones has indicated that the federal government will look at increasing the super guarantee to 15%; although he says this will not be on the policy agenda for its first term in office: “We’ll look at the

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It’s time to reform superannuation taxes

Mercer Pacific president David Bryant has suggested that people with large superannuation balances should be paying a higher tax on their earnings. At present all earnings are taxed at a flat rate of 15%, regardless of the account balance. Bryant, who is the chairman of the Financial Services Council, contends that the current superannuation system

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Industry super fund assets balloon past $1 trillion

The Australian Prudential Regulatory Authority (APRA) has released its Quarterly superannuation performance statistics highlights for the March quarter. This report shows that total superannuation assets rose by 9.7% in the year to March, to $3.44 trillion: Part of the increase in superannuation assets was caused by rising contributions, which totalled $141.6 – an increase of

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Coalition’s super-housing plan would increase inequality

On Sunday, the Morrison Government announced that if reelected, it would allow first home buyers to borrow up to 40% of superannuation to purchase their first home, capped at up to $50,000 (see yesterday’s article). Under the policy, first home buyers would need to have $125,000 in their superannuation account in order to withdraw the

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Morrison feeds more first home buyers to property meat grinder

Over recent months we witnessed the Coalition and Labor launch a raft of new “housing affordability” policies – from home loan guarantees to shared equity schemes – aimed at driving more first-time buyers into the housing market and propping up housing values. Yesterday, a desperate Scott Morrison announced that if re-elected, the Coalition would allow

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Superannuation tax rorts supercharged by Coalition

Last week’s federal budget extended by 12 months a measure introduced during the height of the pandemic allowing wealthy retirees to maintain their superannuation nest eggs without needing to sell-down their assets. This “emergency” measure was introduced in March 2020 when the world’s stock markets were in free-fall, and reduced minimum drawdown rates by 50%.

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Superannuation is a rich man’s tax rort that drives inequality

Business journalist John Beveridge has penned a ripping article lambasting the great Australian superannuation “rort”, which continues to lavish tax breaks on wealthy Australians, with the system resembling more of a tax planning scheme than a genuine retirement pillar: The “rort”, which at this stage is entirely legal, is to build up superannuation funds to

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Wealthy retirees feast on another budget superannuation rort

Tuesday’s federal budget extended its minimum pension drawdown requirement for a further 12 months, enabling affluent retirees to keep their superannuation balances without needing to sell their assets. This policy was introduced in March 2020 as an emergency COVID measure when the Australian stock market was in freefall, reducing minimum drawdown rates by 50%. The

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‘Experts’ back allowing first home buyers to raid their super

Allowing first-home buyers to use their superannuation as collateral was one of the 16 recommendations of a parliamentary inquiry into housing affordability and supply. Several ‘experts’ have thrown their support behind the recommendations: The proposal to use super as security was a “great idea” since it turned superannuation from an obstacle to buying a house

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Consumer groups lash superannuation fear factory

Australia’s superannuation industry loves to scare the public into believing they will retire poor and will have to work until they die. Running this line helps the industry gain policy favour, such as lifting the compulsory superannuation guarantee, which boosts the amount of funds under management and fee revenue. Super Consumers Australia (SCA), which is

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Labor not interested in making superannuation fairer

A few weeks back, Fund manager Mercer called for superannuation balances to be capped at $5 million, a stance already favoured by the likes of Super Consumers Australia and the Australian Institute of Superannuation Trustees: Mercer senior partner David Knox said the distribution of superannuation concessions needed to change. “We know that the biggest beneficiaries of

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International Women’s Day highlights superannuation inequity

International Women’s Day has prompted calls from the Australian Institute of Superannuation Trustees (AIST) for the Federal Government to ‘close the retirement gap’ by extending superannuation to paid parental leave: AIST CEO Eva Scheerlinck said women were disadvantaged most by the fact that parental leave was the only paid leave that did not include superannuation,

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Like Groundhog Day, super rorts are back in spotlight

For years I’ve argued that superannuation is more a tax minimisation scheme for the rich than a genuine retirement system. Yet despite the system’s fundamental flaws, the federal government has increased the share of income that Australians are required to contribute into superannuation, damaging the Budget’s long-term sustainability, increasing inequality, and fattening the wallets of

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Push grows to cap super balances at $5m

Fund manager Mercer has voiced its support for the idea that superannuation balances should be capped at $5 million, a stance already favoured by the likes of Super Consumers Australia and the Australian Institute of Superannuation Trustees. Mercer’s David Knox says the people that benefit the most from super tax concessions are those that need

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A universal pension would solve labour shortages

National Seniors Australia (NSA) chief Ian Henschke claims that Australia’s rigid aged pension system discourages older Australians from working, thereby contributes to labour shortages: “These labour shortages could be filled by pensioners and those about to reach pension age if we only encouraged them and didn’t penalise them for working beyond one day a week,”

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Superannuation tax breaks top $40b

The Australian Treasury has released its Tax Benchmarks and Variations Statement 2020-22, which reveals that the budgetary cost of superannuation concessions has ballooned past $40 billion: The cost of superannuation concessions over the forward estimates are shown below: Treasury’s Intergenerational Report showed that the cost of superannuation concessions will over take the cost of providing the aged

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A universal pension would lift labour force participation

National Seniors Australia (NSA) claims that Australia’s aged pension system discourages older Australians from working, thereby contributes to labour shortages: National Seniors chief advocate Ian Henschke said something was wrong in Australia’s pension system design when only 14.2 per cent of Australians aged 65 and over were in the workforce compared to one in four

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Morrison Government commits to 12% super

Superannuation Minister Jane Hume yesterday gave industry an iron clad guarantee that the scheduled increase in the superannuation guarantee (SG) to 12% would go ahead as legislated: Asked whether she would provide an ironclad commitment that the government would not freeze future increases in the super guarantee, Ms Hume reiterated that the increases were already

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Falling homeownership a threat to retirement system

With home ownership rates falling, especially among younger and poorer cohorts, CoreLogic’s head of Australian research, Eliza Owen, has raised concern that the retirement system is unprepared for a future where a large proportion of Australians rent: “[If you consider] policies that preserved high values of homes in order to secure Australian wealth, you have to

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Hospitality wage thieves steal super too

As we know, the hospitality industry has been lobbying the federal government hard for access to foreign workers under the guise of skills shortages. This comes despite the hospitality industry being notorious for systemic wage theft and exploitation of migrant workers. ABS data also shows that the Accommodation & Food Services industry (i.e. hospitality &