Gillard's super plan is far too rich

We could not save Via the superannuation system and get a tax deduction. Our income was classed as none self exersion (Gillard's super plan is far too rich, February 4).
So we saved outside the super system. At 55 we paid our capital gains taxes and transferred our funds into a SMSF and went into pension mode. This was the first time that we got any genuine tax relief on our savings and yet we still help the Government finances by supporting ourselves.
Most of our lives we have done without to put ourselves in a reasonable position in retirement. I think it is time that Politicians and public servants are treated exactly the same as the rest of us, only then will they understand how mucked up, time consuming, and costly it is to run a SMSF and how much daily risk we expose ourselves to in a market that our politicions manipulate as a result of their often failed policies.

My super money is mine. Not only have I been taxed on the way in and on earnings, for some time I also had to pay the stupid contributions levy (Gillard's super plan is far too rich, February 4). I was made redundant a decade ago and more than a year later was hit by the ATO for the contributions levy that had taken them all that time to calculate. I had been unemployed for nine months at the time. This stupid government has now limited me to a maximum contribution of only $25k per annum so I can't even address my modest super balance as my kids grow up. The good news is that if I die (irrespective of the cause)my family would get $1.5m from the life policy in my super fund that I've continued to pay for over twenty years. Or will that be taxed too as middle class welfare under this proposal?

Robert, You are to soft on the pollies and senior public servants. I think if you look at all the changes to Super over the past few years the parties that are least effected are those very people who determine what is rich conveniently ignoring themselves (Gillard's super plan is far too rich, February 4).
Surely for them to have some integrity in these matters they should be reducing their 15% plus gifts from the taxapayer to the "new" 12% . A levelling of the playing field??

What does it matter what their policies are. Abbot the bulldog lost the unlosable election last time. Julia will come through. She'll be there for another four years no matter how on the nose she is (Gillard's super plan is far too rich, February 4).

The ageing wave is coming, it will stretch future budgets, as the dependency ratio declines (Gillard's super plan is far too rich, February 4). If there is less Super there will be more claims on benefits. That said the guy with $2 million in super who eats out twice a week with his wife in 2020 or beyond will be creating jobs and income, the guy who seeing all the "fiddling" with super and invested the minimum and gets part pension and preferred to spend more of his income in the working years, creates little employment and receives tax money. This is not rocket science, we are an ageing population we need more self funded people in retirement and we need more people to stay on in work.

On superannuation (Gillard's super plan is far too rich, February 4):
1. Don't mix up parliamentary pensions with public servant pensions.
2. Treat superannuation not as an investment but as deferred income. Contributions and growth in the funds should be tax-free. Come retirement, the funds should be transferred from a superannuation to a pension fund, paid out - with a special retirement index - over one's retirement with residuals remaining in the fund to benefit those who live past their life expectancy.
The capital must be spent and should be zero when life expectancy is reached.
Superannuation must not be used as a tax-effective investment to benefit one's estates or one's extraordinary expenses,such as paying out a mortgage. It must also be compulsory for ALL, from pauper to billionaire. We live in one society and have to make our contributions to that society as we can expect that society to carry us in times of adversity.
What is happening now is that poor and rich alike exploit those in the middle who have no way of participating in the exploitation process.

Dont take my money you all scream. Instead of complaining about this, it is a terrible idea or poorly aimed at best, why dont you offer solutions (Gillard's super plan is far too rich, February 4). Why are the rich in this, and most wealthy 1st world countries, paying less and less tax as a % of total tax take yet earning more and more money?
It cant go on.

@Jon Stanford and others,
The only way of fair taxing is a DEBITS TAX. Devise a figure and everyone pays it. Spend the money and pay the tax (Gillard's super plan is far too rich, February 4).
You could do away with the whole taxation dept. The tax laws would be one paragraph long. x cents will be paid on the $ on every purchase, there will be no exceptions, the banks will credit treasury instantaneously thereby giving the government instant access to funds.
Problem solved.

I think the last comment Robert makes is the most salient: he is working at 72. I think the concept of working for 40-odd years then retiring for 20 or more is obsolete. Our public purse won't suffice; our super balances are too small (Gillard's super plan is far too rich, February 4). What needs to change is the definition of 'retirement', at a time where life expectancy is climbing above 85yo. Two decades is a long time to live on savings, assuming you retire at 65. Yes, let's get the super system right. But let's also create an economy and culture where older people can continue working in some capacity - for their own comfort and the good of the economy.

Death & taxes
Many of the articles suggest death will result in nil tax (Gillard's super plan is far too rich, February 4).
Not so, depending on who the final payment fom the superfund is made to.
A $1M pension paid to adult kids could be taxed at up to $160K.
No wonder individuals withdraw lump sums prior to death!!

What some of the commentary miss is that among the grearest beneficiaries of taxpayer largesse are those retirees who live in expensive homes and have say $700,000 in superannuation assets and are permitted substantial Centre-Link benefits (Gillard's super plan is far too rich, February 4). My understanding is that when both tax concessions and welfare benefits are included studies have demonstrated that government assistance is quite evenly distributed.The Treasury tables deliberately leaked to the press are quite incomplete.

The message is clear to those of us still in our 40's. (Gillard's super plan is far too rich, February 4.)
See the world and blow every cent we have in our 50's, take out a large life insurance policy with our kids as beneficiaries, and drive off a cliff the day before our 67th birthday.

Grant Mason YES, agree with you 100%. "Pollies should be the same as everyone else", but they won't take money away from themselves (Gillard's super plan is far too rich, February 4). In fact Mark Latham tried and John Howard watered it down so only new members lost out. I don't know if this is still the situation. Maybe someone knows?

it's a pity there was no forsight when the system was being set up. Tax free going in, treated as normal income when withdrawn (Gillard's super plan is far too rich, February 4).
Result, fair distribution of incentives, no health care cards for 100k per year retirees, would discourage lump sum withdrawels etc. I understand it would involve deferment of tax perhaps something like a boom could have been used to fund it instead of electoral pork barrelling (both sides).
Ah well probably to late now.

Perhaps with the pollies super we might do a net present value on the stream of their pension and apply the tax to this (Gillard's super plan is far too rich, February 4). A pension does not have a total account value like a super account. So we tax the on NPV of their pension. And we must add other pension funds and super accounts to this.

Well hail the Socialists again, we have saved all our life for our retirement, sacrificed, family life as my husband worked away, lived in places most pollies would not even venture into (Gillard's super plan is far too rich, February 4). Paid all our taxes and hoped to enjoy our hard earned money, but no we have to prop up the worst government this country has ever seen and that includes Whitlam and that is saying something. Gillard and her "my working class family friend" (wayne you know who) should have no extra benefits than the rest of the population and that equates to the pack of FAT CAT Public Servants living off the Taxpayers as well So we now have to fund an even stupidier scheme the "Gonski" Education reforms. The only reforms the Education system in this Country needs are the back to the future, "discipline, re-hire the Truant 0fficers, fine the parents for no show kids, and hand the power back to the Principals, retain the teachers who at times are dumber than the kids, and contain the Left Wing Teachers Union. Then start teaching the basics and add on the frills later. This reform will cost peanuts, and produce major results. Need we go on about this total failure of Labour Governments both State and Federal, love to splash the cash, with no stated aim in sight except some ideology clap trap. So when the funds run out look for the easiest mark to make up the difference the oldies, you SUPER RICH RETIREES. Well at least we have the Ballot Box.

The first thing the government should tackle is the criterion for access to the Commonwealth Seniors Health Card (Gillard's super plan is far too rich, February 4). A self-funded retiree providing for himself and his wife by direct investment has all forms of income counted. The cut-off for eligibility for the Card is $80,000 for a couple, $60,000 for a single. But the income retirees draw from a superannuation fund is not counted. Consequently a couple can earn up to $80,000 in addition to whatever they draw from their superannuation fund. The Card also provides a telephone supplement and a cash grant every six months. But the greatest benefit is the concession for PBS and Medicare refunds, since health costs rise steeply with age. Many retirees in this fortunate position can live a luxurious life, thanks to the Exchequer, or rather, the contributions of their less fortunate fellow citizens.

Tinkering/tampering with the current Super system,already the play thing of Federal politicians over the years is no longer in the interests of the retirees or those awaiting retirement as it breeds anxiety /uncertainty. Leave this alone and if anything encourage people to save for their retirement and not be simply a plunderable treasure chest for any Government (Gillard's super plan is far too rich, February 4).
The obvious answer is to raise the GST to at least 12.5-15%, abolish the par excellance, nonsense tax avoidance scheme of negative gearing in its present form to the US model of deductability up to the interest paid level and have a good look at the manner of taxing that other avoidance scheme of the "family trust".
This requires political integrity and guts and a real sense of duty to the constituency at large not just the few.
I do not see this eventuating any time soon with a desperate government trying to do too much with too little and an opposition with the only intent of destroying the government and gaining personal power.
Their self seeking simply indicates that they are fully paid up members of todays human race!

The government needs to remove the mindset that retired people must only live off their superannuation investment return (Gillard's super plan is far too rich, February 4). What is wrong with drawing down the capital as well? That is what it is there for. What is the point of going to the grave with all one's superannuation intact?

How dare the government take more from Superannuation. After all it represents salary or wage sacrifice that belongs wholely and solely to the person who earned it (Gillard's super plan is far too rich, February 4). This Labor Government brought in the "superannuation surcharge rules" (so called) to force workers to save for their retirement, and not spend all of their weekly/yearly earnings as they received their dollars. Government should keep their sticky fingers out of it as we can spend or use our own money far more wisely than they can or will imo.

I believe Robert (Gillard Super Plan is far too rich, February 4) and many of the Contributors are missing the point. Hawke/Keating set up the Superannuation Scheme to fund ordinary workers in their retirement so that they did not need to draw the Pension or other Government Benefits. Thanks to Howard Government with another one of their more wasteful decisions( see IMF Report) decided to not only tax contributions going in at 15%, an effective tax deduction of 30% if marginal rate is 45%, a loss to revenue currently running at $43 billion when added to the 15% tax paid whilst in Superannuation phase less of course any Franking Credits, they made payouts after 60 totally tax free. What to may do with that pay of mortgage, take overseas holidays, etc then come back and put out their hands for the pension, part or otherwise and Healthcare Cards. So please save us the spin. It is something this Nation cannot afford if it really wants to look after those in genuine need and fund areas that it needs to fund to remain competitive in the future in a rapidly changing world that we sure as hell don't control. Our current Tax collections are the third lowest in the OECD and so is our spending, see OECD Statistics. We cannot have European quality of life on Hong Kong Tax Rates no matter how many Public Servants you sack or Government Assets you sell.

Hi John Finnerty; the main reason our overall tax take is low by OECD standards is the extremely low net tax paid by the majority of the population (Gillard's super plan is far too rich, February 5). Most family people on incomes up to $90,000 pay no net tax when the various forms of welfare are taken in to account.
Contrary to popular belief, the relatively small proportion of high income earners contribute the majority of the overall income tax take. They are also not entitled to government welfare payments. They pay more for health insurance, superannuation (contributions tax) and electricity. They also contribute more in state government taxes, primarily through stamp duties but also in consumption-based levies, but they draw less on the public system by paying (in after tax dollars) for Private Schools and Private Health Care.

Robert - excellent article, but ...
Per your example if you earn 3.8% on your CBA savings of $1m then you do NOT have an income of $38,000 in perpetuity as you suggest. You must allow the capital to appreciate by inflation (assume 3% LT). If you don't then in year 10 of retirement you'll still receive $38,000, but it will only be worth $28,275 in "today's" dollars.
Therefore (as usual) Labor's proposal is even meaner than it seems (Gillard's super plan is far too rich, February 5).
Savings of $1m only delivers $8,000 of spendable income each year if you want to protect your purchasing power from inflation. Of course, you can deplete your capital, but then you're betting that you die before it's depleted.
This adjustment for inflation is very important - please ensure it is not ignored in the public debate on this important issue.

Robert,
Well spoken in your article (Gillard's super plan is far too rich, February 4).
In my view we need a vigorous and aggressive campaign against Federal public servants and politicians defined benefits pensions which are far too generous.
Mike Hannell

The Australian government provides every person of pension age and residental qualification the safety net of the basic pension, so why should the government grant the high income people so many tax concessions, which cost the government now the same as the age pension; around $30 billion. (Gillard's super plan is far too rich, February 4)
Scrap the means test of the basic pension and scrap all tax concessions for super. If anyone wants a higher standard of living in retirement, they should save towards it with after tax income.