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Super Savings Under Threat?

It’s become abundantly and alarmingly clear that the Federal Government is coming for us with new taxes on real estate and superannuation.

Headed by Federal Treasurer Jim Chalmers, the Government clearly has plans for more and higher taxes on real estate, with not even the family home safe from the intrusion of capital gains tax.

Asked repeatedly by various media representatives to rule out dumping a tax on the family home, Federal Treasurer Jim Chalmers repeatedly refused to do so.

This is scary, scary stuff.

Prime Minister Anthony Albanese was forced to intervene, attempting damage control by assuring us that they have no plans to inflict a capital gains tax on the sale of the family home.

But clearly this is in the mind of the Federal Treasurer at least, who is looking for new taxation revenue to repair the budget.

We already know that Federal Labor wants to scrap negative gearing benefits and increase capital gains tax on investment properties.

It’s not currently their policy, officially, because it cost them a previous Federal election when it WAS their policy – but we know they would love to do it if they could.

Now, all this started with the Federal Government announcing higher taxes on superannuation.

This is outrageous on so many levels, it’s difficult to know where to begin.

Outrage No.1, it’s a broken election promise – a blatant breach of an understanding made during the Federal Election campaign in May 2022.

Albanese clearly stated, a number of times, during the election campaign that they would not increase taxes on our superannuation savings – and within nine months of taking office he has broken that election promise.

It’s always quite stunning to observe the nonchalant way politicians of all colours break their understandings to the nation’s citizens.

In my view, it should be treated as a breach of contract, with legal ramifications.

Outrage No.2, this is a classic “thin end of the wedge” situation.

The Federal Government says it’s only going to lift taxes on people with superannuation balances above $3 million.

But having achieve that, who will they target next?

We know from a long and bitter history, that once a tax is brought in, we never get rid of it. Taxes only get bigger.

Land tax was implemented in the 19th Century and early in the 20th Century as a means to break up large tracts of under-utilised land.

It was brought in for a specific purpose, which has long since been served – but more than 100 years later we still have it.

And recently we saw the Queensland State Government trying to bend the rules to massively increase land taxes on anyone who owns property in Queensland – unsuccessfully, as it turned out, but the attempt was unnerving for many property owners.

When the GST was introduced in 1999 by the Liberal Government under John Howard, we were promised that it would eliminate the insidious tax on home ownership known as stamp duty or transfer duty.

They lied – we got the GST which adds to the cost of almost everything in Australia, but we still have stamp duty.

When the superannuation guarantee levy was inflicted as an additional tax on businesses in 1992, the rate was 3%. It’s now 10.5% and destined to go higher.

So, with this new tax on superannuation, when the Federal Government says it will only affect the relatively small number of people with over $3 million in super, we CANNOT believe them.

Be afraid, be very afraid.

Outrage No.3, the most obscenely generous superannuation benefits in Australian society, with massive cost to the public purse, are the super benefits that the politicians receive.

Anthony Albanese and Jim Chalmers are seeking to depict Australians with big super savings as greedy rich people ripping off the tax system, but they are themselves the worst offenders – and you can bet your house they won’t be touching their own super benefits in this process.

Average politicians who retire typically receive $100,000 per year in super benefits for the rest of their lives.

Albanese, when he retires from politics, or is voted out, will receive up to $400,000 per year in super benefits, paid for by our taxes, for the rest of his life.

If he lives for 30 years after retiring, or being kicked out of office, he will therefore receive $12 million in superannuation benefits – paid for by you and me.

Now, THAT is outrageous.

But wait, there’s more.

Outrage No.4, is the damage this does to people’s faith in the superannuation system.

Australia wants everyone to invest in super to provide for their retirement. That’s why it’s tax advantaged.

The more money that people have in super, the less likely they are to need the age pension, which is increasingly a massive burden on the Federal Budget, because of our aging population.

But politicians keep tinkering with the system. They just can’t help themselves – they want to tax everything, to the max, and they forget why investments like superannuation are relatively lightly taxed.

So this new measure by the Federal Government is another nail in the coffin of the public’s faith in superannuation.

Personally, I have relatively little in superannuation savings. I’ve deliberately not made it a priority because politicians keep changing the rules – as the Federal Government has done with this new taxation measure.

They keep moving the goal posts – and each time they do, they destroy confidence in the system.

And that, ultimately, will cost the Federal Budget more than this nasty tax measure will save.

And finally, Outrage No.5 – what’s next?

We know the Federal Government won’t stop with this, if we let them get away with it.

It’s the first step in a series of measures.

People with smaller superannuation balances will be targeted in the future.

Other tax benefits, like negative gearing, will be targeted also.

And, yes, even the family home is being considered by Federal Treasurer Jim Chalmers as a source of taxation revenue.

If you’re not afraid, you haven’t been paying attention.


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