Category: Features

Labor dumps “final” super policy for increased tax grab

Labor said, more than a year ago, in their superannuation policy: “If elected, these are the final and only changes Labor will make to the tax treatment of superannuation.”

Last Sunday, just six days before the election, Labor changed its tune and revealed that it will tax superannuation more heavily if it is elected on Saturday.

Superannuation alliance group media release – 28 June 2016

Federal election 2016: Liberal Curtin members’ super revolt

The Australian
12.00am June 29 2016
Andrew Burrell – WA Chief Reporter Perth

The Curtin division of the Liberal Party — the wealthiest and most powerful in Western Australia — has passed a motion condemning the Turnbull government’s controversial changes to superannuation which will hit the retirement savings of many in the blue-ribbon electorate.

The motion means the issue will be debated at the Liberal Party’s state conference in August and will put pressure on Curtin MP and Liberal deputy leader Julie Bishop to defend the unpopular changes against claims by party members that they are unfair.

Liberal members in Curtin hope the motion will form part of a backlash against the moves that will ultimately force the Turnbull government to back down before the changes come into effect in July next year.

It is understood that Ms Bishop and other Liberal candidates are regularly receiving complaints on the campaign trail from traditional Liberal voters about the issue.

Some supporters are so angered by the measures — including a $1.6 million cap on accounts — they are refusing to donate to the Coalition’s re-election campaign.

Ms Bishop told The Australian yesterday that the superannuation changes had been raised at an “ideas night” for the Curtin division.

She said only 4 per cent of super account holders across Australia would be affected.

“I look forward to reassuring branch members that the Coalition’s proposed changes to superannuation will mean 96 per cent of Australians will be unaffected or better off as a result,” she said.

The Foreign Minister struggled to explain the detail of the plans when she appeared on Melbourne radio earlier this month.

The Institute of Public Affairs think tank has claimed the number of people affected would be far higher than 4 per cent of the population and has criticised the government for being unable to explain its policy.

Liberal members who attended the Curtin meeting this month said superannuation was nominated as the most important of three issues the division decided to take to the state conference.

They said the division included scores of members who were nearing retirement and now faced a changed financial landscape.

The Curtin division is the most influential in WA and boasts about 1000 members across Perth’s wealthy western suburbs, including Claremont, Cottesloe, Dalkeith, Nedlands, Peppermint Grove and Subiaco.

Under the super changes, the government will cap tax-free retirement accounts at $1.6m and introduce a $500,000 lifetime cap on non-concessional contributions as well as cutbacks to the Transition to Retirement Scheme.

Ms Bishop holds Curtin with a margin of 18.2 per cent, making it the state’s safest seat.

Australians “… spooked out of… their [superannuation] investment” – Scott Morrison


Treasurer Scott Morrison, 18 February 2016


One of our key drivers when contemplating potential superannuation reforms is stability and certainty, especially in the retirement phase. That is good for people who are looking 30 years down the track and saying is superannuation a good idea for me? If they are going to change the rules at the other end when you are going to be living off it then it is understandable that they might get spooked out of that as an appropriate channel for their investment. That is why I fear that the approach of taxing in that retirement phase penalises Australians who have put money into superannuation under the current rules – under the deal that they thought was there. It may not be technical retrospectivity but it certainly feels that way. It is effective retrospectivity, the tax technicians and superannuation tax technicians may say differently.


Source: :

Government Destroys Financial Adviser’s Trust in Superannuation

26 June 2016

I have been an ASIC-registered Financial Adviser for more than three decades. Over that time, I have provided my clients with retirement-planning advice. I have promoted the Government’s (both Liberal and Labor) carrot and stick message of (1), the increased long-term vulnerability of the aged-pension and, (2), tax concessions specifically structured to encourage self-funding superannuation retirement savings.

ASIC requires me to give my clients a Statement of Advice (“SoA”). It sets out the Government’s superannuation tax incentives. Those tax incentives underpin my SoA’s recommendations. They are crucial to the client’s decision. I am invariably asked “What happens if the Government changes things?”. UntiI now, I have always answered: “In my long-term experience, Governments have always ‘grandfathered-in’ protection for existing arrangements.”  

But Treasurer Scott Morrison, in his May 2016 Budget, changed all that.

Last year, before that Budget, he said to the Australian people:

“The Government has made it crystal clear that we have no interest in increasing taxes on superannuation either now or in the future.

… unlike Labor, we are not coming after people’s superannuation…”

Not only did the Government not do what the Treasurer promised, they did precisely what the Treasurer promised that the Government would not do.

The Government came after people’s superannuation and announced proposed increased taxes on superannuation.

Furthermore, the Treasurer added insult to injury. He announced those increased taxes without also announcing that Australians who had acted in good faith and saved for their retirement under the then existing rules, would have their superannuation savings protected by grandfathering.

What am I supposed to tell my clients now, when they ask me, as they will, “What happens if the Government changes things?

Am I now to say, “Well, I remember the Liberal Government’s May 2016 Budget. I wouldn’t put my savings into superannuation because you can’t trust the Government not to change the rules, and not protect your savings by grandfathering the existing rules”.

Jim Brownlee,

Authorised Financial Adviser Representative.

Berwick, Victoria

Save Our Super Disclosure:

The author of the above letter, Jim Brownlee, is a long-standing and close friend of Jack Hammond’s – the founder of Save Our Super. From 1965 to 1974 they were partners/shareholders and directors of Brownlee Hammond & Associates Pty Ltd, Insurance Brokers. Since then, Jack Hammond has no financial or any other interest in any business associated with Jim Brownlee. They remain good friends. Jim Brownlee requested Jack Hammond to review and publish the above letter. The final form of the letter was authorised by Jim Brownlee.

Brexit means the Government must pause and re-think on superannuation

logoasalogoaialogosisfa logosoacropped-SaveOurSuper_Horiz.jpg

26 June 2016

The economic shock waves from Brexit mean the Government must pause and re-think its superannuation tax plans if it is elected next Saturday.

The retirement savings of Australians are now vulnerable to the buffeting they will receive as the global economy adjusts to Brexit. Superannuation fund investment strategies and expected returns on fund assets are now much more uncertain. The share market will be more volatile, interest rates may stay lower for longer and investment values will be affected by variations in exchange rates and trade flows.

In these circumstances, new taxes and new limits on superannuation savings will diminish the capacity of superannuation funds to deliver dependable and adequate returns to their members in line with their investment strategy and anticipated retirement income.

The superannuation funds to which most Australians entrust their retirement savings are not protected against economic turbulence, whether they are self-managed or run by professional fund managers. They are exposed to investment risk, including the loss of capital, and longevity risk.

In contrast, the defined benefits funds that politicians and public servants enjoy are guaranteed for life by government at the cost of taxpayers and are immune from adverse economic conditions.

In the current circumstances, it would be unfair and unwise for the Government to proceed with its superannuation tax plans. Politicians should not expose the retirement savings of others to risks they do not bear themselves. They should not be imposing new structural changes on superannuation when the investment climate is so uncertain.

If elected, the Coalition should immediately put its superannuation tax plans on hold until the consequences of Brexit become clearer. This is consistent with the Prime Minister’s message at his campaign launch today that in the wake of Brexit Australia needs stability in economic policy.

If elected, the Government should also review the unfair impact of its superannuation changes on people who have invested in superannuation under the rules and now find their retirement savings are to be taxed. The Government should ‘grandfather’ the rules that applied prior to the Budget on 3 May.

The Government should also review the numbers that underpin its policy. We have shown through analysis by Dr Ron Bewley, former Professor of Econometrics and Head of the School of Economics at the University of NSW, that the numbers on which the Government justifies its policy do not add up.

A fund of $1.6m is not enough to last all of retirement for all people – to do that it would need to be twice as large, $3.2 million. Nor will a fund of $1.6m deliver four times the age pension, nor an income equivalent to $100,000 from a defined benefit fund as the Government has claimed. Dr Bewley’s analyses can be found here –

The numbers on which the Government justifies its superannuation changes do not stack up and should be independently audited.

As well as hitting the pause button on its superannuation tax policy, the Government should engage in genuine consultation with superannuation investor groups. So far it has fallen short of proper consultation.

The Tax White Paper process was cut off at the knees even before an options paper was released; there was no consultation on the significant structural changes to superannuation in the Budget; and consultation on the objective of superannuation was merely expedient. The thoughtful submissions by many superannuation groups have not yet even been published on the Treasury website.

There has been no answer from the Government on the many basic questions being asked about how the superannuation tax changes will affect them.

There is widespread dismay among Australians who have retired, and among those approaching retirement, that the Government’s superannuation changes will disrupt their retirement plans and diminish the income they expected to rely on in retirement.

Many people have told us they will now have to defer their retirement and work longer.

Many have found that the back-dated non-concessional contributions cap, in particular, has wrecked their retirement savings plans.

Abrupt changes to superannuation break the implicit contract between government and the people: in return for requiring people to lock-up part of their income for the whole of their working lives, the government provides incentives to encourage savings and should ensure that the rules of the game are not changed midstream to adversely affect people who have made savings in good faith.

If younger people are to have confidence in superannuation, they need to be assured that the savings they make now under the current rules should still be intact in decades hence and not diminished by government policy changes in the meantime.

Changes to the superannuation rules should always be prospective with prior savings and caps ‘grandfathered’ to honour the policies under which the savings were made.

Retirement savings are such an important element in the economic and social fabric of Australia that the rules should not be changed by one political party or the other, but should only be made after thorough review, proper consultation and with bipartisan agreement.


Duncan Fairweather

Executive Director

SMSF Owners’ Alliance

0412 256 200

Australians’ Trust In Superannuation Betrayed And Undermined

People caught by the Federal Government’s proposed super changes feel that the Government has betrayed their trust.

Jack Hammond QC – Save Our Super

Australians’ Trust In Superannuation Betrayed And Undermined

Certain of the proposed changes are manifestly unfair, unreasonable and undermine trust in government if they are not grandfathered.

Jack Hammond QC – Save Our Super

Australians’ Trust In Superannuation Betrayed And Undermined

It’s not so much the money involved but the bad precedent those superannuation changes establish.

Jack Hammond QC – Save Our Super

Australians’ Trust In Superannuation Betrayed And Undermined

If the government wants to change the rules they need to make these people exempt. You shouldn’t be penalised for acting in accordance with the rules.

Jack Hammond QC – Save Our Super

Australians’ Trust In Superannuation Betrayed And Undermined

It’s unfair and unreasonable to Australians who now or will rely on superannuation for their retirement income to make new rules which significantly affects them by penalising their actions taken in good faith, encouraged by the government, under the then existing rules.

Jack Hammond QC – Save Our Super

Load more