Quote:


so what was this? and it was YOUR quote.

and as for super changes, it was you who asserted that the govt kept to their promise of no changes to superannuation. and yet they did. they halved the self-contribution limits as well as some other changes i dont remember. anyway you spin that it is a CHANGE ie a breach of an election promise. How do you possibly figure it as being anything else?

The great superannuation tax concession rort

Research Paper No. 61

February 2009


David Ingles

Introduction

Superannuation tax concessions will cost the budget $24.6 billion in 2008–09 (Treasury
2009), rivalling the $26.7 billion annual cost of the age pension and constituting a fifth of
income tax revenue ($130 billion per annum). Tax expenditures (see Definitions,
Appendix A), of which the super tax concession is by far the largest, are one of the fast-
growing areas of total government spending (see Figure 1).

[...]

1. What is the incidence of the concessions?

• The paper demonstrates that the tax concessions flow overwhelmingly towards
the well-off, with those earning less than $34,000 per annum receiving almost no
assistance and those earning over $180,000 per annum receiving the most.
Astonishingly, the top five percent of individuals account for 37 per cent of
concessional contributions.

• The current concessions provide almost no benefit to low-income earners,
including women working part-time, but an executive earning $300,000 per
annum with a million dollar retirement account can receive $37,000 of
concessions,2.5 times the value of the age pension, for every year of their
working life.


• Tax concessions for superannuation provide substantially greater benefits for men
than women and this disparity will continue under current arrangements.

• Allowable contributions are such that high-income earners could easily retire with
$5 million in assets, which would then allow them to draw down around $500,000
a year in retirement, all tax-free.

• The system has become so skewed that the annual cost of providing
superannuation tax concessions to high-income earners is much greater than the
cost of simply paying those same individuals the age pension. Providing tax
concessions for superannuation as a mechanism to help insulate the budget from
the cost of providing for an ageing population is not sensible.

2. Do the concessions provided to superannuation increase retirement income
adequacy?

• While the superannuation industry has succeeded in creating concern about the
adequacy of retirement incomes, current policy settings will ensure that by 2030
average Australian workers will achieve 85 per cent of their pre-retirement living
standard during retirement. Even the baby boomers, who will partly miss out, will
gain a substantial supplement to the age pension and almost all will achieve a
‘modest but adequate’ living standard.

• The paper finds that, while there is no doubt that tax concessions increase
retirement incomes, the benefits of these concessions are so skewed towards the
well-off that they undermine the redistributive nature of the Australian retirement
income system. As a consequence, a situation has been created whereby the
retirement income system will increasingly emphasise income maintenance after
retirement rather than income support for retirees on low incomes. There needs to
be a more appropriate balance between the two goals.

• The higher an individual’s pre-retirement income, the more support the tax system
provides to help boost post-retirement income. This shift in the objective of the
retirement income system away from providing a safety net and towards
maintaining living standards has occurred without any public debate as to whether
such a radical change in direction is appropriate or whether it should be so highly
taxpayer-supported.

[...]

The paper concludes that the current system of tax concessions is in need of fundamental
reform:

• it is too costly and the cost rises steeply with time

• the system redistributes billions of dollars to the well-off

• it distorts saving into superannuation with no guarantee that national saving is
increased as a result.

• it is complex, creates arbitrary categories of favoured and non-favoured
contributions and makes no economic sense.

It is time for change.

[...]

BTW Welcome back to the forums. your contributions have been missed - altho I disgree with close on everything you say! School holidays still being hell???

Personal choice and a desire to live above the pension is perhaps a lofty goal. Apparently not so for everyone!!

Andrei.Hicks wrote on Jan 19^th, 2011 at 12:23pm:


as long as you can afford it. otherwise it is a tough, uncompromising, crime-filled hovel.

longweekend58 wrote on Jan 19^th, 2011 at 2:08pm:



With the cost of living HALF that of Australia, you've got a damn sight more chance in San Diego than you do in Melbourne....

JC Denton wrote on Jan 19^th, 2011 at 3:55pm:

You live in a unique area, Imp, until I moved to a rural area I'd never met any indigenous person, many living in the cities would be the same.
BUT, what also surprised me was that these areas were set up by us "white folk" to keep the "blacks" out of town, so in a way we created the problem by ostracising them.