Sent: 28-03-2012 13:48:03
In this issue:
Return to full article list
HomeFree weekly newsletterSelf Managed Super Fund ArticlesContact usLogin
Super Under Attack
In The Weekend Australian, George Megalogenis wrote the following:
A super scheme that no longer cannibalises other savings is, on face value, a welcome advance. But it raises an interesting question for fiscal policy. Why should either side persist with the existing tax break for compulsory contributions, especially when it is skewed to higher-income earners?Both sides could get to surplus in 2012-13 if they removed, or pared back, the concession. If they were really brave they could even use some of the budget savings to fund real tax reform.
Megalogenis points out that after a long period households are actually saving but for many years after the introduction of compulsory super, people stopped saving.
I'm not sure people stopped saving solely because of the Super Guarantee. I think Don Stammer is onto something when he said that in the 1990s and early part of this century some people supercharged their assets by borrowing because interest rates declined and they could afford to borrow a lot more.
My fellow Australian columnist Megalogenis is no fool. He writes articles about the tax and social welfare system that contain some really complex data analysis. His last two books have been launched by ALP and Coalition Prime Ministers - yes, he's respected across the political spectrum which is quite rare.
I'm unconvinced that the super industry has made the case that the SG should be increased to 12%. Certainly the argument about its merits is much hotter than the debate about the original compulsory super legislation.
As I've said before it's a scandal that lower income earners are forced to save in vehicle that is not tax effective for them. I don't believe the tax paid by higher income earners on their super should be used to solve this problem - higher income earners pay most income tax. I don't have a solution. But I hope the super industry gets its collective head together and gives the Government a solution. Surely there are enough people in super who want to find a solution?
Version 6.0 of my SMSF book is now available.
You can see all the changes that have been made between Version 5.1 and 6.0 (the latest edition).
You can look at the contents page at the following link: http://www.atcbiz.com.au/r.php?r=0mjd6ne
For details of the changes made from version 5 to version 6 visit: http://www.atcbiz.com.au/r.php?r=d5xcpch
As you'll see from the list there have been many changes.
Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link: http://www.atcbiz.com.au/r.php?r=5a4agqb
This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.