"I for one welcome our insect overlords" - The Politics Thread

[midfielder]

Truthful is

a] Brave
b] Insane
c] A dope
d] Taking the biggest gamble of his life that if he can bring the budget back to surplus everything will be forgiven
e] Thinks Blinky is so bad he can't beat him ...

D its over to you I have posted Fleetwood Mac's ... Tell me Lies ... wonders aloud how many pictures of Truthful can be made to this song... come on D show your skill...


Some of the words

Tell me lies
Tell me sweet little lies
(Tell me lies, tell me, tell me lies)
Oh, no, no you can't disguise
(You can't disguise, no you can't disguise)
Tell me lies
Tell me sweet little lies

Although I'm not making plans
I hope that you understand there's a reason why
Close your, close your, close your eyes

No more broken hearts
We're better off apart let's give it a try
Tell me, tell me, tell me lies

Tell me lies
Tell me sweet little lies
(Tell me lies, tell me, tell me lies)
Oh, no, no you can't disguise
(You can't disguise, no you can't disguise)
Tell me lies
Tell me sweet little lies

If I could turn the page
In time then I'd rearrange just a day or two
Close my, close my, close my eyes

But I couldn't find a way
So I'll settle for one day to belive in you
Tell me, tell me, tell me lies

Tell me lies
Tell me sweet little lies
(Tell me lies, tell me, tell me lies)
Oh, no, no you can't disguise
(You can't disguise, no you can't disguise)

 

[dibo]

They're out of their trees.

The existing PPL scheme costs about $1.5bn p/a. The government's PPL scheme costs $5.5bn/yr. Over the next decade the additional cost is greater than the cost to complete the roll out of the National Broadband Network.

They're concerned about the cost of the pension, but they've scrapped incentives for low income earners to contribute to super while giving high income earners superannuation tax concessions that will soon cost more than the age pension.

They bang on about workforce participation but their commission of audit recommended slashing minimum wages and steeper benefit taper rates, resulting in incentive-destroying 95% effective marginal tax rates.

They want a more efficient health system, but are imposing a disincentive to go to a GP *and* scrapping the Australian National Preventive Health Agency.

Twisted priorities.

The Guardian has a thing where you can choose what you'd do within the budget to bring the bottom line in.

http://www.theguardian.com/world/interactive/2014/may/09/budget-cuts-revenue-interactive

I got a $6.03bn surplus.
- Index pensions to CPI
- End concessional taxation of super earnings
- Keep the carbon price, scrap direct action
- Scrap the gold-plated PPL scheme
- Tax private trusts as capital gains
- Restore indexation of fuel tax
- Halve diesel fuel rebates

We don't have to f**k the country to fix the budget.

 

[MagpieMariner]

You surely don't think they're trying to fix the budget do you? It's all about what their big business masters can get out of the workers' pockets.

 

[Einstein]

We need to encourage more money into super not less.

 

[dibo]

We need to encourage more money into super not less.

The obvious question here is "why?"

The answer *should* be "to reduce reliance on the age pension". But then that raises other questions:

• Why did this government scrap the tax concessions on superannuation contributions from low-income earners?
• Why is this government supporting tax concessions for wealthy superannuants that cost almost as much as (and in the future will cost more than) the age pension?

It's a tax dodge for high income earners - if you're on >$180,000 at age 55 (as I hopefully will be), defer some of your consumption to put up to $25,000 into super and your income is only taxed at 15% rather than 47.5%. It's effectively a handout of $8,125 per year, and only high income earners can make the most of it.

What's more, there's bugger all to stop those same people taking their super as a lump sum, pissing it away and reverting back to a full or part pension anyway.

The Australia Institute described a scheme where we could scrap all tax breaks on super and redirect the money into providing a universal pension at a higher rate than at present. The cost to the budget is equivalent.

The idea is that people would still have an incentive to save - to get more than what they get on the pension and to maintain a lifestyle - but it won't be subsidised.

What's more, people will no longer have an incentive to divest themselves of assets *or* keep all their assets tied up in the family home in order to maintain their access to the pension.

I'm not sure I fully support that idea, but it seems to be a better idea than handing billions in tax breaks to high income earners at the same time as telling low income earners that they get no help *and* they won't be able to access the pension til they're 70 *and* that the pension will rise at a slower rate *and* stopping the increase in compulsory super contributions.

 

[Einstein]

Your numbers are incorrect. Factually wrong.
If your over 55 at the moment your cap is $25,000 the most you could put in as a salary sacrifice contribution would be around $8350 depending on your employers SG %.
That would be taxed at 15% as all contributions are, so you would pay $1252.50 leaving you with an amount of $7097.50.
If you were to not salary sacrifice and be taxed on that amount $180,000 your tax on $180,000 would be $54547. With the salary sacrifice contribution your assessable income would be $171650 and your tax payable $51457 add the tax you paid on your salary sacrifice contribution to that and the total tax paid is $52709.50 and the difference between that and the total tax paid on $180,000 is only $1837.50. Of course the cap is being raised from July 1 to $35,000 but its is a far cry from the Howard era of being able to dump $100,000's in and be a self funded retire?? I am sick of the generalisation and complete lack of understanding of our taxation and superannuation systems. When you rock up to H&R block do you say to "accountant".."don't worry about deductions this year mate, let the government have my share!!" ??

 

[dibo]

It's super tax concessions, not pensions that are killing the budget
Date
April 21, 2014
Mark Kenny
Chief political correspondent

EXCLUSIVE

The age pension currently costs $39 billion and superannuation tax concessions will cost the budget around $35 billion in 2013-14. Photo: Nic Walker

• Peter Martin: Abbott's biggest broken promise

Australia's generous superannuation tax concession designed to make Australians provide for their own retirements should be scrapped because it disproportionately benefits the rich and will actually cost the budget more than the age pension in coming years anyway, according to new research.

With the government weighing up significant changes to the age pension in a bid to curb a projected blow-out, including raising the eligibility age to 70, The Australia Institute has crunched the numbers and concluded that revenue foregone through the low 15 per cent tax rate applied to super contributions, is fast becoming the fiscal drag.

And it says the two retirement income systems - the means-tested age pension, and the blanket subsidy for superannuation contributions - are working against each other with the former acting as a personal wealth disincentive, and the latter encouraging savings but dramatically skewing the benefits to the wealthiest.

Four in five retirees eventually get either full or part age pension, with the remaining one in five failing a combined asset and wealth test.

However, that cohort of wealthier retirees, currently enjoys a major advantage over other taxpayers because the flat 15 per cent rate on super contributions is much lower than the top marginal rate they would be liable for on all other income.

The study, to be formally released on Tuesday, found the rate of growth of super tax concessions is greater than that of the pension despite the ageing population, meaning the cost of the tax concession will soon overtake the pension to become ''the single largest area of government expenditure,'' by 2016-17.

'''The age pension currently costs $39 billion and superannuation tax concessions will cost the budget around $35 billion in 2013-14,'' the study found.

It notes that the Commonwealth bill for these concessions is projected to rise at a staggering 12 per cent annually to be $50.7 billion in 2016-17.

''The overwhelming majority of this assistance flows to high-income earners,'' the report finds.

''Low-income earners receive virtually no benefit. The combined cost of these two policies will be $74 billion in 2014 alone.''

To address the problem, the report's authors, David Ingles and Richard Denniss, have called for an end to the favourable taxation of superannuation and the introduction in its place of a ''universal age pension'', which would be non-means tested.

Individual superannuation would then be used to top-up retirement incomes but its accumulation would not receive preferential tax treatment.

Dr Denniss said the current arrangements were inconsistent, unfair, and ultimately unsustainable.

''We're not saying 'scrap super', people would still be putting 9 per cent of their income into super, and they'd still be free to put additional payments into their super, but they wouldn't be getting the massive tax concessions for doing so,'' he said.

He cited the example of someone on $200,000 who is forced to take 9 per cent of their income as employer super, and thus gets that income at a 15 per cent rate rather than paying tax in the top bracket.

''Under the current scheme, the more your earn, the bigger the benefit you get, and if you don't earn very much, you actually pay more tax,'' he said.

''If the cost of age pensions is ballooning, then tax concessions for super are the Hindenburg.

''You can get your super from age 55, well, we're now saying you can't get the pension until you're 70, if the purpose of super is to take pressure off the age pension, why are we letting people get their hands on it15 years earlier?''

The study comes as the Prime Minister is reported to have dismissed a plan to stiffen the pension assets test, favouring instead the gradual move to a 70-year-old eligibility threshold.

Read more: http://www.smh.com.au/federal-polit...-the-budget-20140421-zqx7p.html#ixzz31Yfp6umr

 

[Einstein]

You missed my factual accurate numbers... Employees are not forced to take 9%....it is the legislation, actually its 9.25% was this written by a blind one armed monkey? A person on $200,000 would be required to have 9.25% as Super Guarantee. That would equate to $18,500 of SG. So if the package was $181,500 + Super that would be a $200,000 package.

Some companies actually pay more than the required legislated amount.

I am actually not sure the gentleman that wrote this really has a clue!

 

[dibo]

Given you're all over the numbers and clearly have some understanding of this, what do you make of this:

'''The age pension currently costs $39 billion and superannuation tax concessions will cost the budget around $35 billion in 2013-14,'' the study found.

It notes that the Commonwealth bill for these concessions is projected to rise at a staggering 12 per cent annually to be $50.7 billion in 2016-17.

''The overwhelming majority of this assistance flows to high-income earners,'' the report finds.

''Low-income earners receive virtually no benefit. The combined cost of these two policies will be $74 billion in 2014 alone.''

Does that sound like a good structure to you?

 

[Einstein]

So the large figures are a gross misrepresentation when a thorough understanding of their argument is examined. If the "35 Million" includes the 15% tax concession for SG contributions then the figures are wrong, as they state later in the article that ''We're not saying 'scrap super', people would still be putting 9 per cent of their income into super, and they'd still be free to put additional payments into their super, but they wouldn't be getting the massive tax concessions for doing so,'' he said. So what we would be seeing is even less money being saved in Super in a heavily taxed environment with NO incentive to be a self funded retiree.

 

[Einstein]

Our Superannuation is rated the 3rd best in the world, it is a benchmark. If SG is scrapped our employers will not pay us in kind! If you think they will your delusional!
One of the first thing that Employers do when they are going down the tubes is stop paying Super............

 

[Einstein]

Given you're all over the numbers and clearly have some understanding of this, what do you make of this:



Does that sound like a good structure to you?

Socialist agenda, that is what that sounds like!

 

[dibo]

Socialist agenda, that is what that sounds like!

I suppose you won't want to hear from noted socialist and friend of the workers John Hewson:

http://www.swinburne.edu.au/media-c...r-distortions-before-raising-pension-age.html

End super distortions before raising pension age

Date posted: Thu 24 Apr 2014


In an opinion piece published in The Australian Financial Review former federal opposition leader John Hewson and Swinburne lecturer in economics Jeremy Nguyen argue that superannuation tax concessions should be better targeted and subject to the same scrutiny as pension spending.


It's a story we've seen before, and we already know the likely ending: first come reports that government is "actively considering" an unpopular choice, then public outrage runs its course; then the threatened option comes to pass.

Current rumours have the government considering an increase of the retirement age to 70, slashing the pension, and tightening eligibility criteria on the basis of a yet-to-be released report by the Commission of Audit.

We've heard a lot about the rising cost of spending on age pension – people are living longer; this is already being managed by a slowly-staged increase in pension age to 67 by 2023.

While there is room to better target the pension through tighter means-testing, spending on age pension is not where the budget is being blown. There are other ways to cut back.

Last week, I made the point to the Senate Committee into the Commission of Audit that while Australia has one of the lowest tax and expense-to-GDP ratios among OECD countries, the IMF reports that we have the highest tax-concession expenditure (as a share of GDP) of the countries considered.

Assistance enshrined in our tax system is worth about $120 billion this year alone and grows to $150 billion by 2016-17.

If the Commission of Audit doesn't look at this, its recommendations may be half-baked and indeed may make the government's political task harder than it needs to be. There will likely be easier savings from cutting wasteful tax expenditures than from cutting valuable social programs.

There is certainly more than one way to balance a budget, and we must wonder: do we really need to deny people a pension until they turn 70? (Have you spent the day with a sixtysomething year-old builder or road worker, sales assistant or nurse, and seen how they live, day to day?)

It's worth reconsidering concessions granted for super: they're as costly as the age pension ($44.8 billion compared to $44.9 billion in age pension), but are growing more rapidly.

If the ultimate goal of superannuation tax concessions is to support people in retirement by providing incentives to save, concessions must be better targeted and subject to the same scrutiny as pension spending. High-earner skew

Treasury estimates that from the combined support of superannuation tax concessions and the age pension, most people (about 80 per cent) receive around $270,000 support over their lifetime. In contrast, the top 1 per cent of male income earners receives about $520,000 support over their lifetime, because of significant tax concessions to high-income earners.

Surely, we don't believe that the top 1 per cent require that much incentive to adequately save for their retirement.

These tax concessions not only skew heavily towards high-income earners: low-income earners are actually penalised for saving (you read that right: penalised). Individuals earning less than $20,500 are taxed more heavily on superannuation contributions and earnings (15 per cent), than on their own income (0 per cent). High-income earners have around two-thirds of their tax rate slashed in super.

For example, a person who earns $250,000 only gives up $62.50, after tax, to boost their superannuation savings by $100. Contrast this with a person earning $20,000, who gives up about $118 after tax to boost savings by $100. This person would have to pay more tax on super, including their employer contributions, than on their wage.

These numbers are enough to surprise anyone: the low-income earner has to pay nearly twice as much to boost their super savings by the same amount. This from a system designed to encourage sufficient saving for retirement?

As a result of this poorly targeted tax concession, 36.1 per cent of the benefits go to the top 10 per cent of income earners, whereas the bottom 10 per cent don't receive any assistance at all, but are instead penalised. The Henry Review recommended this tax concession be reformed. Low-income earners, who are less likely to have adequate savings for retirement, should be the target of incentives to save.

The review also recommended removing the current exemption for earnings in the retirement stage.

We don't understand how anyone can argue, in good faith, that there are insufficient funds to support pension for low and modest-income workers who have worked all their productive lives, yet, in the case of a retiree with $10 million in super, suddenly there are sufficient funds for a tax break of $280,000 on their earnings, each year. Indeed, an appropriate reform of age pension should increase support for the most needy, while being targeted more effectively.

If we need to find savings in this space, we cannot afford to ignore super tax concessions. Increasing the age pension age to 70 would unfairly hurt vulnerable people in occupations with low incomes and short-working lives, while the wealthy would still be able to draw down on a significant form of government support from the age of 60.

Increasing the age pension age to 70 may have to come to pass one day, but why would we do that before we have already exhausted the other sound options.

 

[Einstein]

I am not sure why you keep posting opinion pieces, when all I did was point out your numbers are factually incorrect.

 

[dibo]

I'm posting these things because I'm trying to let people read through information and make up their mind whether or not super tax concessions are a good thing.

My point is that there shouldn't be a tax concession. It costs billions in forgone revenue and the benefits accrue vastly more to the wealthy than average people. I can't see a justification for them being there at all.

You may quibble over numbers here and there, but you're not taking on this simple argument that is being put by me, by the SMH, by the Australia Institute and by John Hewson...

 

[Einstein]

I would argue that a self funded model would decrease the need for people to be on the pension and as SG has only been compulsory for 20 odd years the need for pension should decrease over time. Hence why the ALP legislated the increase in SG and the ALP introduced Super.

 

[dibo]

You might also find this interesting, from treasury. It's a distributional analysis of superannuation tax concessions.

Table 3 shows the top 30% get 63% of the benefit.

Figure 3 (showing how the highest income earners get far more support from the government than anyone else) is particularly instructive - would you like to argue that that is a just and proper system?

http://www.treasury.gov.au/Policy-T...alysis-of-superannuation-taxation-concessions

DISTRIBUTIONAL ANALYSIS OF SUPERANNUATION TAXATION CONCESSIONS
A paper to the Superannuation Roundtable


This paper presents Treasury analysis on the distribution of superannuation taxation concessions as presented to the Superannuation roundtable of 23 April 2012. The analysis does not include May 2012 Budget measure which reduced concessions on contributions for very high income earners.

Superannuation is taxed concessionally
While personal income is generally taxed at individuals' marginal tax rates, superannuation is taxed concessionally to support and encourage individuals to save for retirement:

• Contributions phase – contributions are taxed at a flat rate of 15 per cent in the fund. This will generally be concessional compared with higher individual marginal tax rates – see Table 1.
• Accumulation phase – investment earnings are taxed at a flat 15 per cent (can be 10 per cent for capital gains) which will be concessional compared with higher individual marginal rates.
• Retirement phase – investment earnings (including capital gains) can be tax exempt – taxed at 0 per cent – if they are from assets supporting superannuation pensions. Superannuation payments to individual members will generally be tax free where members are 60 or over.

Table 1: Comparison of superannuation taxation and personal income taxation 2012-13



Value of tax concessions
The 2011 Tax Expenditure Statement estimates tax concessions on superannuation at approximately $32 billion in 2012-13. This is the second largest tax expenditure. Concessions on contributions are estimated at $16.5 billion and on superannuation earnings at $15.5 billion.

Distribution of tax concessions
The following two tables analyse the distribution of superannuation tax concessions.

The first table uses actual 2009-10 data to estimate concessions on contributions and earnings.

The second table is estimates of the concessions on contributions in 2012-13.

The share of concessions increases as you move up the income scale.

• It is estimated that in 2012-13 the top 5 per cent of contributors will receive 20.3 per cent of contribution concessions. The top 1 per cent will receive 5.3 per cent of contribution concessions. (Refer Table 3)
• Higher income earners also receive more of the earnings tax concessions. (Refer Table 2)

Table 2: Actual distribution of superannuation tax concessions 2009-10

Table 3: Forecast distribution of contributions concessions 2012-13

Change in distribution of contribution concessions since 2007
Figure 1 shows the change in distribution of concessions since 2007:

• An increase in concessions for low income earners from the low income superannuation contribution.
• Concessions for higher income earners decreased after the reduction in the contribution caps.

Figure 1: Change in distribution of contribution concessions since 2007

Level of support provided by age pension and superannuation combined
Figure 2 adds age pension support to the support provided by taxation concessions:

• Age pension support is highest for lower income earners and superannuation tax concession support is higher for higher income earners.
• Total combined support starts to increase clearly for the top 10 per cent of income earners;
• The top 1 per cent of income earners receive the most combined support.

Figure 2: Distribution of "total government support"
(both superannuation tax concessions and Age Pension)

The membership of the Superannuation Roundtable were:

The Hon. Bill Shorten MP (Chair), Hazel Bateman, John Brogden, Everald Compton, Richard Denniss, Paul Gerrans, Dr Cassandra Goldie, Melinda Howes, Ged Kearney, Mark Rantall, Fiona Reynolds, Andrea Slattery, Peter Strong, Pauline Vamos, David Whitely, Cate Wood.

 

[Einstein]

http://www.smh.com.au/business/supe...-huge-blowout-on-pensions-20140509-380z3.html

I see some sense in this.

 

[Einstein]

I would agree with your argument to some extent if everyone paid the same marginal tax rate, the top 30% already contribute significantly to the tax system. The contributions are capped therefore discriminating against those that earn more in your system. How is that fair?

And Bill Shorten chairing a roundtable about Superannuation?? That is a joke, he is merely a union puppet for the affiliated Industry Super funds, time will reveal all with his dealings on that matter.

Decent panel though
I have met many of them

The Superannuation Roundtable will consist of:
The Hon. Bill Shorten MP (Chair) Minister for Employment and Workplace Relations Minister for Financial Services and Superannuation
Hazel Bateman School of Risk and Actuarial, University of New South Wales
John Brogden Chief Executive Officer, Financial Services Council
Everald Compton Chairman, Advisory Panel on the Economic Potential of Senior Australians
Richard Denniss Executive Director, The Australia Institute
Paul Gerrans Business School, University of Western Australia
Dr Cassandra Goldie Chief Executive Officer, Australian Council of Social Service
Melinda Howes Chief Executive Officer, Institute of Actuaries Australia
Ged Kearney President, Australian Council of Trade Unions
Mark Rantall Chief Executive Officer, Financial Planning Association of Australia
Fiona Reynolds Chief Executive Officer, Australian Institute of Superannuation Trustees
Andrea Slattery Chief Executive Officer, SMSF Professionals’ Association of Australia
Peter Strong Executive Director, Council of Small Business of Australia
Pauline Vamos Chief Executive, Association of Superannuation Funds of Australia
David Whitely Chief Executive, Industry Super Network
Cate Wood Australian Association of Women in Super
Representative of the Joint Accounting Bodies

 

[dibo]

I would argue that a self funded model would decrease the need for people to be on the pension and as SG has only been compulsory for 20 odd years the need for pension should decrease over time. Hence why the ALP legislated the increase in SG and the ALP introduced Super.

That's fine, but why do we need the tax concessions? Do you think the well off need a reason to save? The only reason I can think of to defend this is that it's somehow a really good idea to leave tax loopholes for the well off to dodge income tax.

Funnily enough, if all we did was close the superannuation tax rort, we'd be able to afford other things like perhaps reform of benefit payments and taper rates to boost work incentives (the CIS published a really interesting paper on negative income taxes years ago). That way we remove disincentives for people to transfer from welfare to work (like effective marginal tax rates of >70%) and boost the participation rate.

More workers = more taxpayers = more people able to fund our future health and pension costs.

I would agree with your argument to some extent if everyone paid the same marginal tax rate, the top 30% already contribute significantly to the tax system. The contributions are capped therefore discriminating against those that earn more in your system. How is that fair?

We have a progressive tax system, and tax concessions on super that are regressive (the higher your income, the bigger the proportional benefit). That's not fair. I'd ditch the cap on contributions at the same time as I'd ditch the tax concessions, but I suspect that there won't be as much clamouring to contribute if it weren't so 'tax effective' (i.e. a rort).

And Bill Shorten chairing a roundtable about Superannuation?? That is a joke, he is merely a union puppet for the affiliated Industry Super funds, time will reveal all with his dealings on that matter.

I suppose we should only have people like the Financial Services Council and other partisan members of the North Sydney Forum advising us, to ensure we do away with things like requirements that financial advisers disclose their commissions and act in the best interests of their clients...