Politicians just can’t keep their hands off our superannuation

- March 3, 2023 2 MIN READ
Hands off our superannuation

Well, politicians just can’t keep their hands off our superannuation, can they? They encourage us to invest for our retirement, so they don’t need to pay us the aged pension and then constantly change the rules.

I sort of agree with the Federal Treasurer that the person with $544 million doesn’t need all of us normal taxpayers funding the tax concessions they receive on their superannuation. And I suppose the same could be said for the 27 people with more than $100 million in their super, or the 100 with more than $50 million, or even the 11,000 with more than $5 million. I even think the proposed $3 million is a reasonable threshold.

The new $3m rule

Under the proposal, the increase in the tax is on balances above the $3 million threshold – the first $3 million of every superannuation balance will stay at the concessional 15 per cent rate.

Remember, all our taxes fund tax concessions. It doesn’t seem right that 40 per cent of all superannuation concessions flow to the top 10 per cent of income earners. It doesn’t seem fair.

What I don’t like is politicians constantly changing the rules. The way they think of it as a honey pot.

It’s our money not theirs.

Politicians have to comply

I’ll be interested to see whether these new rules apply to the 482 former politicians and their spouses who are earning above $100,000 a year for life (or took a similarly attractive lump sum) because of the incredibly lucrative superannuation scheme for those elected prior to 2004. Taxpayers would save $350m if the government abolished perks giving these retired politicians six-figure pensions under this scheme.

Because he was first elected in 1996, Prime Minister Anthony Albanese qualifies for this old scheme which will pay him a $426,000 a year pension indexed for life when he eventually leaves parliament.

I spoke with Treasurer Jim Chalmers on Wednesday and he told me that the Prime Minister and those former politicians, and even public servants, on those extremely generous Defined Benefits Schemes would have to comply with the changes as well.

Jim Chalmers the reformer

I know Jim Chalmers wants to be a reformist Treasurer in the mould of Paul Keating. I don’t have a problem with that as long as he is upfront with his plans. here are a lot of tax concessions which are being rorted and we need to stop the rorts because we all eventually end up funding them. They have to be fair.

It begs the question that if the Federal Government is looking to reduce the $50 billion a year in tax concessions for superannuation, what will they target next?

Next target?

The various capital gains tax (CGT) exemptions total $71.7 billion a year. This includes $48 billion on CGT exemptions for the family home, and another $23.7 billion in revenue foregone on CGT discounts for individuals, such as property investors and trusts. And then there’s the $6 billion in negative gearing tax concessions.

What will the next target be after super?

The question becomes… can we trust our politicians to be completely honest with us? History says the answer is a definite “no”.

Get Kochie’s weekly newsletter delivered straight to your inbox! Follow Your Money & Your Life on FacebookTwitter and Instagram.

Read this next:

How much super should you have by now? (Bet it’s more than you think!)