Category: Save Our Super Articles

Bill Shorten: Press Club Q and A – Canberra – 24 August 2016

SUBJECT/S: Superannuation…

JOURNALIST: Hi Mr Shorten, Phil Coorey from the Fin Review. Thanks for your speech. Just on super, and just at the end of your speech where you announced – you offered Scott Morrison a way through on a couple of things and so forth. I’ll just take you back, when you were Minister in charge of this area you proposed some changes to super and at the same time you said that should be it and we should leave super from here onwards in the hands of some independent guardians, and then a couple of years ago Mr Bowen, your Shadow Treasurer, was here, he announced a couple of changes that you took to the election, and then again you proposed not touching super, only every five years and having it overseen independently. Now we’ve got the Government still trying to finalise its policy, you’re offering more changes to try to get them through. Are we kidding ourselves to think that superannuation is just not going to become a punching bag between now and whenever the economy gets back on a strong footing, we don’t need to see it as a source of revenue?

SHORTEN: We certainly think that superannuation policy going forward should be a lot more transparent and a lot more generational in decision making. That’s why we like the idea of a Reserve Bank-style of policy making in superannuation which would report to the Parliament its proposed policies and its changes. But there’s no doubt that the system of tax concessions is not sustainable in its current form, and initially when we said that I think the Liberals sort of rubbished us. But then to my surprise they came up with some almost Chavez-like measures last Budget. Only four months ago, doesn’t time fly?

There’s no way Phil, I could have predicted that this Government would embrace the principle of retrospectivity. The last time I think we saw that was in bottom of the harbour tax schemes. The truth of the matter is that they’ve made such a hash of superannuation. And don’t take my word for it. Just take it from every backbencher who briefs you off the record, and some on the record. This retrospectivity has cast the whole system into confusion. Now, I get that a standard response might be to say ‘well the people affected by retrospectivity are relatively very well off’. The problem is it destabilises the whole system. Retrospectivity undermines everyone’s confidence in superannuation. So Phil, I couldn’t have predicted that the Liberal Party of Howard would then turn into the sort of retrospective law makers of Turnbull and Morrison, and really, you know and I know and certainly I occasionally read the editorials in your paper – the David Rowe cartoon is always good – you know, they, your paper is fulminating against retrospectivity. So something’s got to give here. We’ve got to fix this.

They have got themselves into a dreadful hash. What I find amazing is that the Liberal solution is, you know, do they tackle retrospectivity which they – they don’t want to admit they’re wrong, but then they’re proposing that you should have a million dollars. Then you’ve got Scott Morrison saying he couldn’t in all conscience tell his kids he’d agree to have $1 million in terms of – with the favourable treatment. I agree with him on that. But in all conscience, we can’t tell people that they’ve invested under one set of laws, can we, and the goal posts get changed between and people have invested in good faith? So, this is a mess of the Government’s making. We’ll help fix up their retrospectivity and we’ve also proposed sensible ways to make sure that our superannuation tax concession scheme is sustainable.

 

JOURNALIST: Mr Shorten, just on your super position that you articulated today, is that it? I just wanted to clarify is this your final position on super? Will you then vote against what the Government puts to Parliament unless they change some change?

SHORTEN: We hope that the Government actually sits down and talks to us about this, full stop. It should be it. I can’t predict what this Government is going to produce, though. If we had had a sporting bet about the Government going down the path of retrospective legislation, could I have got any takers for it? You couldn’t get odds on it. You will probably get better odds for Giles getting elected in the Northern Territory. That is the fact of the matter. So I can’t predict what is in the minds of the Government. But what I say to them is this, superannuants, not just the people affected, but everyone, are sick and tired of the system being mucked about with. But this retrospectivity issue is very destabilising, it is not a matter about the amount of money, there is a principal going on there. We’ve come up with a solution and we have improved the Budget bottom line too. And we say to the Government and this is the thrust of today’s speech, on the things that we fair about like Medicare, well we are going to fight every day. But where we can get cooperation or negotiation we will do that too. And I think on superannuation, just like on the banking royal commission and if they could actually back down on their cuts to Medicare and if they could just, just get themselves off the hook they’re on in terms of this plebiscite. I think they would get a lift in respect of the public. It may not be in our short-term interest but it’s in the nations long-term interest and that is who I am.

We remind Scott Morrison of his broken “tax-free super” promises

4 May 2019 – Due to an inadvertent transposition, the quotes in this document do not match the proper source. We have corrected the document. The update can be found here:

We remind Scott Morrison of his broken “tax-free super” promises – Updated 4 May 2019

Email dated 16 July 2016 from Save Our Super to Treasurer Scott Morrison in lead up to the Liberal Federal Parliamentary Party meeting to be held on Monday 18 July 2016:

Dear Mr Morrison,

I write to you in your capacity as the Treasurer in the second Turnbull L/NP Coalition Government.

This email relates to the superannuation issue. Therefore, if possible, would you please read it before the Liberal Federal Parliamentary Party meeting to be held in Parliament House, Canberra next Monday 18 July 2016. It may go a long way to explain the anger and dismay felt by many Liberal Party/National Party members and conservative supporters of the L/NP Coalition. I am one of many.

I am a Melbourne QC. I live in Kelly O’Dwyer’s electorate of Higgins in Victoria.

Also, I am the founder of Save Our Super; see: https://saveoursuper.org.au . A brief biography of my background can be found on that website under “Our People”.

Save Our Super is an organisation I formed as a consequence of the Government’s current superannuation policies. Those policies were announced by you on 3 May 2016, when you delivered Budget 2016 on behalf of the first Turnbull L/NP Coalition Government.

It is no understatement to say that those policies were sprung on the Australian public without notice or any real consultation. They were not “evidence-based” public policies by any reasonable use of that term.

Moreover, they were, and remain, in direct contradiction to that which you had told the Australian public on many occasions prior to you delivering Budget 2016.

You made at least 12 “tax-free superannuation” promises in May-June 2015, and in your Address on 18 February 2016 to the Self-Managed Superannuation Funds National Conference in Adelaide. You gave that Address less than three months before you delivered Budget 2016 on behalf of the L/NP Coalition Government.

We have posted them on Save Our Super’s website; (see under the tab “Scott Morrison’s tax-free super” for the source; and see under the category  “Quotes” for the full Address and source).

I have set them out below for your convenience.

You are the one most likely to be accepted by the Governor-General as the Treasurer in the second L/NP Coalition Turnbull Government in about a week’s time.

We believe you should be reminded of your broken promises, at least for the purpose of the forthcoming Liberal Federal Parliamentary Party meeting to be held in Parliament House, Canberra next Monday 18 July 2016.

Scott Morrison’s 12 tax-free superannuation promises : May to June 2015

3AW – 19 June 2015

MINISTER MORRISON: Well we do want to encourage everyone … to be saving for their retirement and particularly when you are drawing down on that when you are retired we don’t want to tax you like Chris Bowen does.

2GB – 25 May 2015

My own view is that the superannuation system, for example, meant I don’t want to tax people more when they’re basically investing for their own future… That’s why I think Chris Bowen’s idea, …of …taxing superannuation incomes, is a bad idea, I don’t support it…

Question Time – 25 May 2015

And when they get into their retirement, we are going to make sure that their hard-earned savings in their superannuation will not be the subject of the tax slug that those opposite want to impose, … Those opposite see it as a tax nest—a tax nest for those to plunder.

The shadow minister earlier referred to ‘trousering’. The ‘trouser bandit’ sits over there because he, together with the shadow Treasurer, wants to come after the hard-earned superannuation savings…

What we will do for them is: we will not tax them like the ‘trouser bandit’ opposite.

3AW – 18 May 2015

It’s the Labor Party who wants to tax superannuation, not the Liberal Party, particularly the incomes of superannuants and I think that’s a fairly stark contrast that’s emerging.

Doorstop – 8 May 2015

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…

Press Conference – 7 May 2015

MINISTER MORRISON: What we are not going to do is we are not going to tax those savings, like Bill Shorten wants to do. That is the difference, we will not tax your super, Bill Shorten will.

MINISTER MORRISON: Yes, and there are other taxation arrangements that apply to superannuation already and we are not going to increase those taxes as the Labor Party does and nothing we have done with the Greens has in any way changed the Government’s position on not taxing your super. We will not tax your super.

ABC AM – 5 May 2015

…what is not fair is if you save for your retirement and you create yourself a superannuation nest egg and the Government then comes along and taxes that income; which is what Labor are proposing to do.

ABC RN – 5 May 2015

We don’t think that people who have done that should be punished with higher taxes, Bill Shorten does, and so does Chris Bowen and I think that’s a stark difference between the Government and the Opposition on these issues.

3AW – 1 May 2015

The Government does not support Labor’s proposal to tax superannuants more on the income they have generated for their retirement.”

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.”

In light of the above, how can the public trust anything you say in future, let alone superannuants and those who advise others regarding superannuation?

As to the latter, see Jim Brownlee’s letter set out below; (see under “Letters to Save Our Super”, and Save Our Super’s Disclosure).

“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”

Please let me know your view of the Government’s current superannuation policies and the outcome of the meeting next Monday, 18 July 2016. I intend to publish this email and any replies I receive on Save Our Super’s website.

If you wish to raise with me any aspects of the Government’s current superannuation policies, or any suggested changes to those policies, I am only too happy to discuss them with you.

Please feel free to contact me on 0400 — — or by email on jack.hammond@saveoursuper.org.au

Regards,

Jack Hammond QC

https://saveoursuper.org.au

jack.hammond@saveoursuper.org.au

Kelly O’Dwyer: Who you stand up for on super depends on where you sit in Parliament!

(21 Mar 2013)  House of Representatives Hansard
Ms O’DWYER (Higgins) (10:40) [whilst in Opposition to the Gillard Labor Government]:

I rise today to speak on the Superannuation Legislation Amendment (Reform of Self Managed Superannuation Funds Supervisory Levy Arrangements) Bill 2013. We have heard a number of speeches in this place as to the import of this bill, but let me recount that the bill amends the Superannuation (Self Managed Superannuation Funds) Supervisory Levy Imposition Act 1991 to increase the maximum levy payable by a trustee of a self-managed superannuation fund for an income year from $191 to $259 from the 2013-14 financial year. It brings forward the liability to pay the levy during the income year instead of the current requirement to pay some months after the year ends, when the SMSF lodges its returns.

Whilst the government made the announcement in the Mid-Year Economic and Fiscal Outlook last year that it would increase the levy from around $191 to $259, the implementation and timing is such that these changes will in fact result in a total levy being paid in the 2012-13 year of $321 and a total levy in the 2014-15 year of $388. We on this side understand that levies do need to be recovered on a cost-recovery basis. We respect that attitude, we respect that that is a responsible way to manage the budget and, in that statement, we do not oppose this bill.

However, it has been clear from the evidence presented to the Parliamentary Joint Committee on Corporations and Financial Services that there is a suggestion that the amounts and levies being charged on self-managed super funds are over and above what would be considered cost recovery.

Evidence was presented to the committee by the Self-Managed Superannuation Professionals’ Association of Australia that there was no justification provided, no evidence presented, by the government that this was in fact cost recovery. They said in evidence to the Parliamentary Joint Committee on Corporations and Financial Services:

As we alluded to previously, the increased costs have been around changes from the Stronger Super package. We have seen those in the 2011-12 budget papers and again in the 2012-13 papers, but, in contrast, in the recent 2012-13 MYEFO papers, there was no justification or reasons given accompanying the increase in the levy.

This was indeed curious, and members asked questions of the ATO. They asked questions regarding the increase and the bring-forward provisions of the bill. The ATO were asked the specific question:

Who proposed this increase in the levy? Was it the tax office or the government?

The ATO’s response was:

I think it is best to take that one on notice. My recollection—but my memory sometimes fails—is that on this occasion the discussion was probably initiated by Treasury, but I may be mistaken.

We are not convinced that this cost increase was one that did not come directly from the government. In fact, the government has a very strong track record of ripping money out of the superannuation sector. Over five years it has ripped more than $8 billion out of the superannuation sector.

I wanted to talk in the time available today about the changes that the government has made to superannuation and how it is having a very direct and significant impact on those people who are doing the right thing—trying to save for their future and be self-reliant. It is critical that people have confidence in our superannuation system and, when people invest their hard earned money, they need certainty—certainty around how that money will be taxed going in and how it will be taxed coming out. They need certainty around the contributions that they can make. They need to know that there will not be continued fiddles with the superannuation system.

This government has in fact made more than 23 fiddles with the superannuation system. That is almost four changes every year, and that is the very opposite of certainty. Some of those changes include: the reduction of the rate at which the government superannuation co-contribution is paid from 1 July 2009 and 30 June 2014; a limit on concessional contributions, reduced from $50,000 per annum to $25,000 per annum; matching the rate for government superannuation co-contributions to be reduced from $1 to 50c, with the maximum benefit also to be reduced from $1,000 to $500; the maximum incomes threshold also proposed to fall from $61,920 to $46,920; and the indexation of concessional contribution caps proposed to be paused for one year in 2013-14 at $25,000 for individuals under the age of 50 and $50,000 for individuals aged 50 and over. That is not to mention, of course, the penalties that have been applied to those people who many have inadvertently breached the ever-moving caps that the government seems to change at every opportunity.

There are significant penalties that go towards ensuring that those people will not see the benefit of the hard earned money they have contributed to their superannuation savings to ensure that they can live the life that they would like to live in retirement. How does the provision to introduce another levy on self-managed super funds incentivise investment in our superannuation system? How does this provide more certainty? The answer is that it does not, and we have already heard from the Prime Minister that she intends to make yet further changes to superannuation. In her Press Club address earlier in the year she flagged that there will be more changes in the budget around the tax arrangements to do with superannuation.

I hear the very deep and real concerns from constituents, who raise this matter with me in a very heartfelt way and who are desperate to know what faces them in retirement. Let me read into Hansard the letter that I received from Glen. He says this:

I am writing—desperately—about the noise on taxation of Superannuation/ Pensions. My wife and I are just recently retired. I am 67 and have worked to the end. We had planned for retirement—foregoing much else to fund our superannuation. And we are totally self-funded. This was long term planning and was done deliberately not to be a burden on the Government and to enjoy some financial freedom. Although the amount we have accumulated in Super may look large, it is frightening to watch how long it is going to have to last while supporting our planned lifestyle. To be candid, the current ‘noise’ is terrifying us.—

And this noise is of course coming from the government.

We had planned everything a long time ago based on Peter Costello’s initiatives and have taken advantage of every new government adjustment while relying on the promises. We are asking you — maybe that should be pleading — to lend you weight to preventing changes for those of us who are now self-funded in retirement without any possibility of re-entering the workforce.

Let me read from what Angela sent me:

As I am facing retirement myself in the not too distant future I am deeply concerned about the proposal to tax the income of self-funded retirees in the name of addressing structural problems within the budget. The only structural problem that I can identify is the reckless and wasteful spending that has occurred over the last six years. Like many self-funded retirees, I have worked, saved and salary sacrificed in order to build-up enough superannuation to ensure that I could enjoy a reasonably comfortable retirement for as long as possible. With the exception of a small minority of wealthy people most self-funded retirees are not ‘wealthy’ and should not be the subject of an unfair tax impost. Apart from the activities of this government, inflation and rises in the cost of living pose the greatest threat to the financial security of self-funded retirees who are living on a fixed income. Many of them run out of money after a short period of time and qualify for a pension. For example, 10 years ago $500,000 was considered adequate for a couple to retire on. Today, financial advisers are recommending that a couple would require at least $1 million in superannuation in order to retire comfortably. It has been estimated that $1 million in superannuation will deliver an annual income of approximately $55,000-$65,000. This might seem to be a reasonable income today however in ten years time an annual income of $55,000-$65,000 may be insufficient. To give you an example, when I started working 40 years ago, I earned the grand total of $35.00 per week. Today, $35.00 might buy you a weekly zone 1 train ticket, if you are lucky.
I am concerned that self-funded retirees are viewed as a soft target by this government and their hard-earned superannuation savings are considered to be a honey-pot ripe for the picking. Any adverse changes will make superannuation an unattractive investment option for working people with the result that fewer people will be motivated to work and save towards independence in retirement. That defeats the purpose of having a superannuation scheme in the first place.

I say to Angela: I could not have put it any better myself. Finally, let me tell you what Daryl has said:

Why is it that in this country we continue to penalise hard work, sacrifice and the occasional success?
…   …   …
I am in my late 50s and therefore approaching retirement age. I have planned for my retirement, sacrificed and worked hard to save for my retirement so I will not have to rely on government handouts. I am therefore increasingly concerned that the incumbent government … continues to covet superannuation with growing evidence that superannuation and superannuation savings could be targeted as soon as the May budget. This is of immense concern for those who have planned carefully, been thrifty and worked damn hard to build a reasonable fund balance. In some respects, one must question whether it was all worth it, or whether sacrifice, responsible savings and thrift should have given way to a more extravagant lifestyle in years past.

We on this side have given an undertaking not to muck around with superannuation, as this government continues to do. We understand the importance of certainty when people are sacrificing and saving for their retirement. We understand the importance of good and responsible economic management so that the government does not have to put its hand in the pockets of the retirement savings of Australians. It is quite, quite wrong. That is why we will stand up for all Australians who want to work hard, create opportunities for their families and be rewarded for their efforts. They should not be penalised.

This government has an awful lot to learn, and, come 14 September, the voices of those people who have been penalised will be heard.

IPA: SUPERANNUATION TAX HIKES SHOULD BE REPLACED BY SPENDING CUTS

IPA Media Release Logo

Institute of Public Affairs | Australia’s leading free market think tank

12 July 2016 (sic)

IPA: SUPERANNUATION TAX HIKES SHOULD BE REPLACED BY SPENDING CUTS

The Turnbull government should cut government spending or delay the introduction of its proposed company tax cuts instead of increasing taxes on superannuation says Dr Mikayla Novak, Senior Research Fellow at free market think tank the Institute of Public Affairs.
Dr Novak was responding to media reports that the Turnbull government was considering modifying its controversial superannuation tax increases.

“The superannuation tax increases are projected to raise a net total of $2.9 billion over the next four years.

There are many alternative ways of financing this amount, including:

  1. Means-testing the child-care rebate and tightening eligibility for Family Tax Benefit Part B
  2. Reducing expenditure across all government departments by one-fifth of one percent
  3. Delaying the company tax cut by 3 years and reducing corporate welfare spending”

 

2016-17 $m 2017-18 $m 2018-19 $m 2019-20 $m Total $m
Middle-class welfare reforms
Means-test Child Care Rebate 250 250 250 250 1,000
Tighten eligibility for FTB B 500 500 500 500 2,000
Reduce cost of government by 0.2% 723 739 776 804 3,042
Other measures
Delay company tax cut by 3 years 400 500 800 1,700
Reduce corporate welfare spending 427 317 237 208 1,189

Some of these proposals were outlined in Dr Novak’s research paper ‘Making Welfare Sustainable-Targeting welfare to those who need it most’  published in November last year.

“Company tax cuts should not be paid for by increasing taxes on retirement income.”

“The superannuation changes announced in the 2016 Budget do more to damage confidence in the
retirement income system than they are worth in dollar value.”

“The government is right to be concerned about its credit rating, but the most important step in the path to budget repair is to get control of spending, ” Dr Novak said.

For media and comment:
Mikayla Novak, Senior Research Fellow, Institute of Public Affairs, mnovak@ipa.org.au or 0448 276 376.

We remind Malcolm Turnbull and all Lib/NP politicians of Scott Morrison’s broken “tax-free super” promises

Email dated 15 July 2016 from Save Our Super to Prime Minister Malcolm Turnbull and all the Liberal/National Party politicians in lead up to the Liberal Federal Parliamentary Party meeting to be held on Monday 18 July 2016:

Dear Mr Turnbull,

I write to you in your capacity as a Senator/Member, or a Senator-elect/Member-elect, of the Liberal/National Party Federal Parliamentary Coalition in the second Turnbull L/NP Coalition Government.

I apologise for not sending you an individually composed letter, but time and the nature of the issue compels a more generic type of communication. However, I trust you will give it your personal and individual consideration and a personal and individual response.

This email relates to the superannuation issue. Therefore, if possible, would you please read it before the Liberal Federal Parliamentary Party meeting to be held in Parliament House, Canberra next Monday 18 July 2016. It may go a long way to explain the anger and dismay felt by many Liberal Party/National Party members and conservative supporters of the L/NP Coalition. I am one of many.

I am a Melbourne QC. I live in Kelly O’Dwyer’s electorate of Higgins in Victoria.

Also, I am the founder of Save Our Super; see: https://saveoursuper.org.au . A brief biography of my background can be found on that website under “Our People”.

Save Our Super is an organisation I formed as a consequence of the Government’s current superannuation policies. Those policies were announced by Treasurer Scott Morrison on 3 May 2016, when he delivered Budget 2016 on behalf of the first Turnbull L/NP Coalition Government.

It is no understatement to say that those policies were sprung on the Australian public without notice or any real consultation. They were not “evidence-based” public policies by any reasonable use of that term.

Moreover, they were, and remain, in direct contradiction to that which Scott Morrison had told the Australian public on many occasions prior to him delivering Budget 2016.

Scott Morrison made at least 12 “tax-free superannuation” promises in May-June 2015, and in his Address on 18 February 2016 to the Self-Managed Superannuation Funds National Conference in Adelaide. He gave that Address  less than three months before he delivered Budget 2016 on behalf of the L/NP Coalition Government.

We have posted them on Save Our Super’s website; (see under the tab “Scott Morrison’s tax-free super” for the source; and see under the category  “Quotes” for the full Address and source).

I have set them out below for your convenience.

As you know, Scott Morrison is the current caretaker Treasurer. His is the one most likely to be accepted by the Governor-General as the Treasurer in the second L/NP Coalition Turnbull Government in about a week’s time.

We believe you should be made aware of his broken promises, at least for the purpose of the forthcoming Liberal Federal Parliamentary Party meeting to be held in Parliament House, Canberra next Monday 18 July 2016.

Scott Morrison’s 12 tax-free superannuation promises : May to June 2015

3AW – 19 June 2015

MINISTER MORRISON: Well we do want to encourage everyone … to be saving for their retirement and particularly when you are drawing down on that when you are retired we don’t want to tax you like Chris Bowen does.

2GB – 25 May 2015

My own view is that the superannuation system, for example, meant I don’t want to tax people more when they’re basically investing for their own future… That’s why I think Chris Bowen’s idea, …of …taxing superannuation incomes, is a bad idea, I don’t support it…

Question Time – 25 May 2015

And when they get into their retirement, we are going to make sure that their hard-earned savings in their superannuation will not be the subject of the tax slug that those opposite want to impose, … Those opposite see it as a tax nest—a tax nest for those to plunder.

The shadow minister earlier referred to ‘trousering’. The ‘trouser bandit’ sits over there because he, together with the shadow Treasurer, wants to come after the hard-earned superannuation savings…

What we will do for them is: we will not tax them like the ‘trouser bandit’ opposite.

3AW – 18 May 2015

It’s the Labor Party who wants to tax superannuation, not the Liberal Party, particularly the incomes of superannuants and I think that’s a fairly stark contrast that’s emerging.

Doorstop – 8 May 2015

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…

Press Conference – 7 May 2015

MINISTER MORRISON: What we are not going to do is we are not going to tax those savings, like Bill Shorten wants to do. That is the difference, we will not tax your super, Bill Shorten will.

MINISTER MORRISON: Yes, and there are other taxation arrangements that apply to superannuation already and we are not going to increase those taxes as the Labor Party does and nothing we have done with the Greens has in any way changed the Government’s position on not taxing your super. We will not tax your super.

ABC AM – 5 May 2015

…what is not fair is if you save for your retirement and you create yourself a superannuation nest egg and the Government then comes along and taxes that income; which is what Labor are proposing to do.

ABC RN – 5 May 2015

We don’t think that people who have done that should be punished with higher taxes, Bill Shorten does, and so does Chris Bowen and I think that’s a stark difference between the Government and the Opposition on these issues.

3AW – 1 May 2015

The Government does not support Labor’s proposal to tax superannuants more on the income they have generated for their retirement.”

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.”

In light of the above, how can the public trust anything Scott Morrison says in future, let alone superannuants and those who advise others regarding superannuation?

As to the latter, see Jim Brownlee’s letter set out below; (see under “Letters to Save Our Super”, and Save Our Super’s Disclosure).

“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”

Please let me know your view of the Government’s current superannuation policies and the outcome of the meeting next Monday, 18 July 2016. I intend to publish this email and any replies I receive on Save Our Super’s website.

If you wish to raise with me any aspects of the Government’s current superannuation policies, or any suggested changes to those policies, I am only too happy to discuss them with you.

Please feel free to contact me on 0400 — — or by email on jack.hammond@saveoursuper.org.au

Regards,

Jack Hammond QC

https://saveoursuper.org.au

jack.hammond@saveoursuper.org.au

Fairer superannuation tax increases through grandfathering

Subject: Fairer Superannuation tax increases through grandfathering

Date: 17 July 2016

To: scott.morrison.mp@aph.gov.au

Cc: higgins@aph.gov.au, barnaby.joyce.mp@aph.gov.au,
senator.canavan@aph.gov.au

Dear Treasurer
Fairer Superannuation tax increases through grandfathering

Congratulations on your recent re-election.

I write in advance of the Party Room discussion of superannuation tax increases announced in the May Budget to register my suggestions on a path forward for the Government.

I suggest that the Budget measures be grandfathered.

The budget Superannuation measures will continue to cost the government support

By all accounts, including exit and other polls and the electorate experience of Liberal candidates reporting lack of volunteer party workers and financial contributions, the Government’s package of superannuation measures was a significant vote loser for the Liberals. I fear this is not a transient irritation. Super savers and self-funded retirees see the Budget measures as a breach of faith, a devaluation of the living standards they have saved for, and a precedent for future attacks on superannuation savings by governments unable to discipline their own spending and live within their own budgets. This fear was confirmed by Labor’s tripling its initial super tax hikes late in the election campaign behind the cover provided by the Government’s measures, while reducing clarity about how the revenue would be raised.

Savers and self-funded retirees now face protracted uncertainty (to at least July 2017 if not beyond) while politicians wheel and deal with savers’ future
living standards.

Both ungrandfathered super tax increases and new super tax concessions should be halted.

I urge you propose in the Party Room re-examination of all the Budget measures on superannuation: both the tax increases and the new concessions that extend superannuation concessions into novel, unnecessary and un-rewarded terrain.

You might have noticed the complete lack of voter thanks for these new concessions that dissipate some $3 billion of the nearly $6 billion of revenue that the Government estimates to be raised from voters existing superannuation accounts over the period 2016-17 to 2019-20.

Those new concessions serve only to destroy the Government’s own strategic argument for faster return to budget surplus.

Destruction of trust in superannuation: a wider problem than retrospectivity.

Media reports suggest backbench criticism of the super measures focuses on the retrospectivity of the new lifetime cap of $500,000 backdated to 1 July 2007. While that measure is of course wrong and unjustly changes the legal status of valid past contributions to count them against a new restriction, by far the worse and wider problem for the Government is its casual and apparently still not understood destruction of savers’ and retirees’ trust in superannuation, and the devaluation of their lifetime savings.

Superannuation is a unique savings product. Savers put money into super with the unique restriction that they cannot access it for some 40 years or more until their preservation age; it then has to last them another 30 years or more of retirement.

Given these unique characteristics, super saving has long been understood as a compact between savers and governments covering the tax and regulatory treatment of super in the contribution phase, the accumulation phase and the pension phase. That lengthy horizon requires savers to trust government and for government to respect savers in the time and consultation given to tax increases at any point in the system – contribution, accumulation or pension phase.

That sensitivity has been shown by previous governments which grandfathered adverse super changes, but destroyed by the current Government.

The groups targeted by the Government measures have few or no options to adjust to the Government’s change in the rules of the game. To add insult to injury, these changes are proposed in the “age of zero returns”, when many superannuation fund balances are showing negative or negligible growth.

The super tax increases should be reconsidered using Justice Asprey’s guidelines.

As long ago as 1975, Justice Asprey’s Report on the tax system offered timeless good sense on how to increase super tax to ensure the increases are fair and only apply prospectively (see Attachment A).

I suggest you should argue to the Party Room that the Government should redesign the Budget measures to ensure they are fully grandfathered, such as were the large tax increases and tax shifts in 1983 and 1988, or the 2009 lowering of the limit on concessional contributions from $50,000 to $25,000 (see Attachment B).

Such grandfathered measures would completely disarm criticisms of retrospectivity and breach of trust, and would be beyond legitimate Labor criticism (not least since they copy earlier Labor means for fairly introducing super tax increases). If, nonetheless, Labor were to block the revised increases, there would be
ample support for the redesigned measures available from thoughtful crossbenchers.

Only such a step can show the Government has listened to its critics, and now truly understands the sense of violation of trust that all superannuation savers now feel. (It is striking that exit polls show that superannuation tax increases concerned both Liberal and Labor voters, and young voters.

They understand that, with the Government abandoning its earlier assurances (such as in your own address of 18 February 2016 rightly criticizing “effective retrospectivity”) and joining the left’s attack on superannuation, there is now no defence against further ungrandfathered attacks on the lifetime savings and living standards of those who once trusted the previous superannuation tax regime as a safe framework for their savings.

Reject false estimates of the cost of superannuation concessions

The Government has been sold a pup in the attack on allegedly costly superannuation tax concessions. It is frequently claimed the superannuation tax concessions cost some $30 billion a year. These tax expenditure estimates are conceptually totally wrong, as clearly shown by Ken Henry’s review Australia’s Future Tax System (Attachment C).

Proper gross tax expenditure estimates are probably around one-fifth of that amount, with the net cost (after allowing for lower uptake of the age pension)  lower still, and perhaps even negative.[i]

Claims that radical cuts to tax expenditures on superannuation are necessary for ‘sustainability’ fail in part because of the vast overstatement of the cost of the present concessions. But if a build-up of cost in future is the concern, the introduction of the revised Budget increases with grandfathering would constitute a valid structural improvement in the budget. Instead, what the Government is proposing is an unfair tax grab at the cost of those who have taken laws of the Government and its predecessors as the framework for their attempts to provide for their own retirement.

I have also addressed similar correspondence to many of your Parliamentary colleagues, and would of course also have addressed it to the Prime Minister, but his entry on the Liberal Party web site does not include an email address, and his preferred interactions by Twitter and Facebook do not appear suitable for serious discussion.

Yours sincerely,
Terrence O’Brien

 

ATTACHMENT A
Asprey Taxation Review Committee Full Report 31 January 1975
Chapter 21: Income Taxation in Relation to Superannuation and Life Insurance
21.9. Finally, and most importantly, it must be borne in mind that the matters with which the Committee is here dealing involve long-term commitments entered into by taxpayers on the basis of the existing taxation structure. It would be unfair to such persons if a significantly different taxation structure were to be introduced without adequate and reasonable transitional arrangements. ………

21.61. …..Many people, particularly those nearing retirement, have made their plans for the future on the assumption that the amounts they receive on retirement would continue to be taxed on the present basis. The legitimate expectations of such people deserve the utmost consideration. To change suddenly to a harsher basis of taxing such receipts would generate justifiable complaints that the legislation was retrospective in nature, since the amounts concerned would normally have accrued over a considerable period—possibly over the entire working life of the person concerned. …..

21.64. There is nonetheless a limit to the extent to which concern over such retrospectivity can be allowed to influence recommendations for a fundamental change in the tax structure. Pushed to its extreme such an argument leads to a legislative straitjacket where it is impossible to make changes to any revenue law for fear of disadvantaging those who have made their plans on the basis of the existing legislation. …..

21.81. …. [I]t is necessary to distinguish legitimate expectations from mere hopes. A person who is one day from retirement obviously has a legitimate expectation that his retiring allowance or superannuation benefit which may have accrued over forty years or more will be accorded the present treatment. On the other hand, it is unrealistic and unnecessary to give much weight to the expectations of the twenty-year-old as to the tax treatment of his ultimate retirement benefits.

21.82. In theory the approach might be that only amounts which can be regarded as accruing after the date of the legislation should be subject to the new treatment. This would prevent radically different treatment of the man who retires one day after that date and the man who retires one day before. It would also largely remove any complaints about retroactivity in the new legislation.
ATTACHMENT B
Examples of grandfathering superannuation tax increases to ensure fairness

When the Hawke Government began addressing super tax design issues, it was clearly influence by the Asprey principles summarized above. Two cases which particularly illustrate the interdependence between taxation of the three phases of superannuation are worth sketching in more detail.

In May 1983, the Hawke Government announced higher taxation of lump-sum superannuation payments. Previously, only 5% of such funds were added to the retiree’s assessable income, and taxed at the retiree’s highest marginal income tax rate. Even at the then highest marginal tax rate of 60%, this was highly concessional: (0.05*0.60 = 0.03) – a 3% tax rate.

The Government proposed to impose a tax rate of 30% on the whole of the lump sum, but the change was grandfathered to ensure there was “no element of retrospectivity”.[ii] The Government announced a delayed implementation date of 30 June 1983. For a lump sum received before 1 July 1983, it continued to be the case that only 5% was assessable, as under the old arrangements. For lump sums received after 1 July 1983, only that portion saved after the implementation date attracted the higher taxation arrangements (modified during consultations to include a tax rate of 15% of the lump sum below a certain threshold and 30% above that threshold). Of the remaining portion saved before the implementation date, only 5% was added to assessable income and taxed under the old rule.[iii]

Paul Keating has reflected on the reforms of that era:

That change preserved the concessionality of the system to 1983 while changing the tax treatment of superannuation post-1983. This meant that those people who, for a large part of their working lives had enjoyed the concessionality of the superannuation provisions, would have those accumulations protected under a ‘grandfathering’ concession —that is, with no retrospectivity—while income after 1983 would be taxed on a less concessional but sustainable longterm basis.[iv]

In 1988, a 15% tax was imposed on employer contributions and deductible contributions (the contributions phase), and the earnings of super funds (the accumulation phase) were also taxed at 15%. This in effect brought forward from the retirement phase the revenue to government from the super saving stream. Without other adjustment, that would have reduced the amount that super balances would grow to by retirement, and would have reduced the after-tax lump sum a retiree could receive. So at the same time, the higher lump sum benefit tax imposed in 1983 was lowered.

Once again, to avoid the imposition of a new tax on a retrospective basis, the taxation treatment of the pre-1983 component of retirement benefits and amounts accumulated between 1 July 1983 and 30 June 1988 was grandfathered. Treasury has rightly noted, however, ‘Grandfathering of this nature (which was also a feature of the 1983 amendments to the taxation of superannuation) has added to the complexity of superannuation taxation arrangements.’ [v]

More recently, the 2009 lowering of the limit on concessional contributions from $50,000 to $25,000 was coupled with transitional measures to protect those already over 50 years of age. The 2009-10 Budget papers noted, ‘Grandfathering’ arrangements were applied to certain members with defined benefit interests as at 12 May 2009 whose notional taxed contributions would otherwise exceed the reduced cap. Similar arrangements were applied when the concessional contributions cap was first introduced. [vi]

Similarly, regulatory changes that affected savers’ planning for retirement late in their working careers have been phased in to spare those closest to retirement, and give advance notice to those further from retirement to make adjustments to their economic affairs. An example was the 1997-98 Budget confirmation of phased increases in the preservation age from 55 to 60 by 2025.[vii]

A further illustration of recent relevance from the intersection of superannuation and the aged pension is the grandfathering of existing account-based superannuation pensions outside the aged pension income test, rather than deeming them as income counted against the test from 1 January 2015 as part of the revisions to that test.[viii]
ATTACHMENT C

How to cost superannuation tax concessions?

Under a comprehensive income tax benchmark the concession to superannuation is the difference between the tax paid if the superannuation contribution and the earnings were taxed as income at the individual’s personal tax rate (plus the Medicare levy) and the tax paid in the fund (generally 15 per cent). Under this benchmark the superannuation concessions have an estimated cost to revenue of over $26 billion in 2007-08 (Australian Treasury 2007).

An alternative way to calculate the value of the tax concession is to use an expenditure tax benchmark. The two types of expenditure tax benchmarks are: a pre-paid expenditure tax based on direct taxation of labour income with an exemption for saving; and a post-paid expenditure tax based on the taxation of a direct measure of expenditure on goods and services.

Under the pre-paid expenditure tax benchmark, the value of the concession is the difference between the tax paid if the superannuation contribution were taxed as income at the individual’s personal tax rate (plus the Medicare levy) and the tax paid in the fund, less the tax paid on earnings in the fund. Benefits are tax exempt under this benchmark, which is consistent with the tax exemption of superannuation benefits in Australia’s retirement income system. Under this benchmark, the superannuation tax concessions would have an estimated aggregate cost to revenue of $4.6 billion in 2007-08.

Under the post-paid expenditure tax benchmark, both contributions and earnings would be tax-exempt but benefits would be fully taxable when paid. Under this benchmark the tax concession is expected to be less than under the prepaid expenditure tax benchmark, as individuals will generally have a lower tax rate on their retirement income than their income while working.

N.B. These estimates are not necessarily indicative of the cost of the superannuation concessions over the long term. The tax concessions help to reduce budgetary expenses in future years, particularly Age Pension payments, through the effect of the means tests.

Source: Australia’s Future Tax System: Retirement Income
Consultation Paper, Box 3.1, 10 December 2008

[i] Australia’s Future Tax System: Retirement Income Consultation Paper, Box 3.1, 10 December 2008.

[ii] Paul Keating, Taxation arrangements for lump sum retirement and kindred benefits, Press Release No 27, 30 May 1983.

[iii] Ken Henry et al, Australia’s Future Tax System – Retirement Income Consultation Paper , Appendix B: A History of Superannuation, Canberra, December 2008.

[iv] Paul Keating, The Story of Modern Superannuation, above.

[v] The Treasury, Towards higher retirement incomes for Australians: a history of the Australian retirement income system since Federation, Economic Roundup Centenary Edition, Canberra 2001.

[vi] Australian Government, Budget 2009-10, Budget Paper No 2, part 1, Revenue Measures, Canberra 12 May 2009.

[vii] Trish Power, Accessing super: Preservation age now 56 years (since July 2015), MLC Super Guide, 5 July 2015.

[viii] Liam Shorte, Age pension changes: keeping your super grandfathered, Intelligent Investor, 26 August 2014.

An Open Letter from Eugenia Mitrakas to Malcolm Turnbull

Budget Superannuation Proposals

malcolmturnbull

Australian Prime Minister Malcolm Turnbull. PHOTO: AAP/LUKAS COCH

22 Jun 2016

EUGENIA MITRAKAS

Dear Mr Turnbull,

I am a Greek born solicitor in private practice in South Melbourne. I migrated to Australia as a young child with my family in the mid 1950s. I attended all the local primary schools. I have lived and practiced in the South Melbourne/Albert Park area for most of my life. I currently live in Albert Park. I have been in private practice (since 1972) running a small legal business for all my working life employing from time to time 2-5 persons.

I have worked extremely hard for more than four decades and I carefully planned for my retirement. I have, to date, used Superannuation as the main vehicle to fund my retirement. My family was brought up on a hard working ethic and having a government funded retirement benefits or pension in my family was looked upon as an indication of failure in your chosen profession and in small business.

I worked in the family businesses (running boarding houses and running the family fish and chips shops in my younger years during my student years and for a few years, as a young lawyer. I was brought up to believe that any hard work, no matter how menial was honourable and where hard work was considered an asset and, that one is always rewarded by their hard work. I continued to work in my parents’ fish and chips shop for the first few years of running my legal practice. My parents instilled in me a pride in hard work so long as it was honest work. This modest work moulded and helped in building my hard work ethic.

I have worried a lot in recent years about the fate of my county of birth, Greece and the desperate and sad financial position that Greece and the Greek people are faced with.

I have been a proud Australian and considered myself lucky to have had the opportunity to grow up in Australia and have an excellent education. I have indeed been very grateful for the many opportunities that Australia has given me, and in return, I have endeavoured to give back to the general community in Australia in order to repay my “debt” to Australia and to the community at large for giving me this great opportunity. At the same time, I have retained my Greek identity and pride in my Greek background, history and culture. I have an immense passion for the Glory of Classical Greece and its contribution to law health and justice of the modern day. I am a product of a multicultural Australia. I married an Australian who became a multicultural Greek. He read widely on modern and classical Greece and on the glory of Greece. He was the “Australian Skippy”. I brought up two Australian step children who are also proud of their Greek connections. This is a success story in Australia’s multicultural policies.

I do not have any sense of entitlement and have worked extremely hard to reach and achieve my goals. Australia is a country that rewards people who are prepared to work hard to achieve their goals, no matter how ambitious or modest.

I have at all times planned for my retirement and have used Superannuation as a vehicle in achieving this. I do not want to, nor do I expect the Australian people or the Australian government to fund my retirement.

I am currently on a transition to retirement. I have been very interested in the current debate about the changes to the policies about our superannuation.
I have, in the last few years, preached to my friends and relatives in Greece about their attitude and views to their retirement and to their sense of entitlement, which I believe has been a major contributing factor to the current financial crisis in Greece. I informed them of our policies and how our government planned to eliminate old age pensions and promote a community of self­ funded retirees.

I am, accordingly very disappointed with the proposed changes and the effect that these will have on hard working responsible Australians. I invested funds after tax into my self-managed super funds (SMSF) to fund my retirement and ensure that I was able to maintain my same lifestyle in retirement. I have worked in the family businesses since the age of nine and deserve to be able to enjoy my retirement. I came from a very humble background, encountered all the known and well documented prejudices but through hard work and determination, I was able to overcome them.

The proposals that were announced in the Budget Papers in May of 2016 are, in my view, very unfair to people who, like me, have worked hard to fund their own retirement.

In recent weeks, I have been forced to review my plans to retire and have taken active steps to continue working for an additional 5-10 years to enable me to fund my retirement goal.

The persons who will be caught by the new proposals are innocent hard working members of the community who have worked very hard to grow assets in super strictly within the confines of the law. They should not be penalised for saving in accordance with such laws. These people were actively encouraged by the government to plan and fund their retirement in order to reduce the welfare burden of the government in the future. They have done so with the encouragement and support of the law of past and present governments, both Labour and Liberal/National Parties.

If the government persists with their proposals to change the policies relating to our super, then there must be a grandfathering clause to ensure that persons who have worked hard to fund their retirement in accordance with the law, are not unjustly penalised.

I have followed closely the debate in the media about the new proposals of the Liberal National government. I have read the article which appeared in The Australian Newspaper on 8 June 2016 on page 7, outlining an interview with Mr Jack Hammond QC who has spoken against these proposals.

I fully agree and support the Proposals of Save Our Super that are set out on their web-site: www.saveoursuper.org.au which calls for bipartisan superannuation policies from Australian major political parties. They call for the following actions; which will grandfather the following Budget 2016 superannuation proposals:
– the introduction of a transfer balance cap of $1.6 million on amounts into the tax­ free retirement (pension) phase from 1 July 2017.
– after commencement, if individuals already in retirement as at 1 July 2017 retain balances in excess of the $1.6 million cap and do not transfer the excess out of the retirement phase account, a similar tax treatment that applies to excess non­-concessional contributions will be applied to that excess at the top marginal rate of tax (ie: 49 per cent for the 2014 to 2016 income years);
– establishment from 3 May 2016 of a life-time non-concessional contributions cap of $500,000 on all non-concessional contributions made since 1 July 2007.
– after commencement, if individuals make contributions that cause them to exceed their life-time non-concessional contributions cap do not withdraw their excess after notification by the Australian Tax Office, the tax treatment that applies to excess non-concessional contributions will be applied to that excess at the top marginal rate (ie: 49 per cent for the 2014 to 2016 income years);
– introduction of commensurate measures to defined benefit arrangements;
– removal of the tax exemption on earnings which support Transition to Retirement Income (pension) streams; which will grandfather the following

Opposition’s superannuation policies;
– reduction of the tax-free concession available to people with annual superannuation (pension) incomes from earnings of more than $75,000. From 1 July 2017, future earnings on assets supporting (pension) income streams will be tax-free up to $75,000 a year for each individual. Earnings above the $75,000 threshold will be taxed at 15 per cent. Note: under the proposal, capital gains are to be grandfathered;
– similar concessions reduced for defined benefit superannuation schemes by removal of the 10 per cent tax offset for defined benefit income above $75,000; which will protect all Australians against any legislation which changes the rules of the game for existing superannuation savings and actions taken in reliance on those rules and savings, by including appropriate grandfather clauses.

I am fully cognisant that the government has to “balance the budget” in order to reduce our ever growing debt, but we should not punish innocent persons along the way.

Penalising hard working and responsible members of our community is an unfair way of trying to ‘balance our books’ and encourages people to live on welfare. These persons who have accumulated assets in super are also running a small business and employ a small number of employees. This policy, if implemented, will have a detrimental effect on small business.

I have sent a copy of this letter to the press for publication.

Please let me have your response on or before 27 June 2016 to assist me and my family in making our decision on how to vote at the General Election on 2 July 2016.

Yours faithfully,
Eugenia Mitrakas BA. LLB. OAM”

Scott Morrison’s 12 tax-free superannuation promises : May to June 2015

4 May 2019 – Due to an inadvertent transposition, the quotes in this document do not match the proper source. We have corrected the document. The update can be found here:

Scott Morrison’s 12 tax-free superannuation promises : May to June 2015 – Updated 4 May 2019

3AW – 19 June 2015

MINISTER MORRISON: Well we do want to encourage everyone … to be saving for their retirement and particularly when you are drawing down on that when you are retired we don’t want to tax you like Chris Bowen does.

2GB – 25 May 2015

My own view is that the superannuation system, for example, meant I don’t want to tax people more when they’re basically investing for their own future… That’s why I think Chris Bowen’s idea, …of …taxing superannuation incomes, is a bad idea, I don’t support it…

Question Time – 25 May 2015

And when they get into their retirement, we are going to make sure that their hard-earned savings in their superannuation will not be the subject of the tax slug that those opposite want to impose, … Those opposite see it as a tax nest—a tax nest for those to plunder.

The shadow minister earlier referred to ‘trousering’. The ‘trouser bandit’ sits over there because he, together with the shadow Treasurer, wants to come after the hard-earned superannuation savings…

What we will do for them is: we will not tax them like the ‘trouser bandit’ opposite.

3AW – 18 May 2015

It’s the Labor Party who wants to tax superannuation, not the Liberal Party, particularly the incomes of superannuants and I think that’s a fairly stark contrast that’s emerging.

Doorstop – 8 May 2015

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…

Press Conference – 7 May 2015

MINISTER MORRISON: What we are not going to do is we are not going to tax those savings, like Bill Shorten wants to do. That is the difference, we will not tax your super, Bill Shorten will.

MINISTER MORRISON: Yes, and there are other taxation arraignments that apply to superannuation already and we are not going to increase those taxes as the Labor Party does and nothing we have done with the Greens has in any way changed the Government’s position on not taxing your super. We will not tax your super.

ABC AM – 5 May 2015

what is not fair is if you save for your retirement and you create yourself a superannuation nest egg and the Government then comes along and taxes that income; which is what Labor are proposing to do.

ABC RN – 5 May 2015

We don’t think that people who have done that should be punished with higher taxes, Bill Shorten does, and so does Chris Bowen and I think that’s a stark difference between the Government and the Opposition on these issues.

3AW – 1 May 2015

The Government does not support Labor’s proposal to tax superannuants more on the income they have generated for their retirement.

Source:

Prepared and edited by Save Our Super from:

Labor media release:

CHRIS BOWEN MP

JIM CHALMERS MP

WEDNESDAY, 20 APRIL 2016

Why I formed Save Our Super

Initially, I viewed, through the narrow prism of my own self-interest, some of the Government’s and Opposition’s proposed changes to the superannuation system. I, and many people like me, will shortly retire and rely, in our retirement almost entirely, if not exclusively, on our superannuation savings built up over many years.

However, my self-interest was quickly overwhelmed by a deep feeling of anger and dismay at what I saw as a breach of trust by the Government.

Over many years, we did what the Government wanted and encouraged us to do with our superannuation savings. We accepted and complied with the superannuation rules which the Government made. We put our savings into superannuation in preference to many other choices which were open to us.

Now the Government, without any notice or consultation with us, proposes to penalise us for the decisions we made at their behest.

On any view, that is manifestly unfair and unreasonable.  

I discovered that I was not alone in that feeling. It caused me to form Save Our Super in May 2016. I’ve since discovered that the feeling I felt is uniformly felt by others affected by the proposed Government changes.

It has cost me time, money and lack of sleep to establish Save Our Super. I could have simply shrugged my shoulders and accepted the proposed changes. I could have simply sought good professional advice, paid for it and then gone quietly into retirement, enjoying my other interests and more time with our children and grandchildren. However, the Government’s breach of trust was too important to ignore.

Millions of working Australians are effectively compelled by the Compulsory Superannuation Scheme to put their hard-earned savings into the Government-mandated superannuation system.

They trust, as they must, that every Government of the day will treat them reasonably and fairly when changes are to be made to the Australian superannuation system.

They trust, as they must, that when the Government says, as Scott Morrison said in May 2015, “[t]he 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…” that those promises will be kept and honoured. That their compulsory superannuation savings, whatever the amount, will be respected, and not be subject to the possibility of being depleted by deliberate government action.  

But they, unlike me and some others like me, unfortunately do not have the knowledge, skills, time, contacts, influence, and resources to do anything about it if a government breaches their trust.

We do.

I, and some people like me, want to ensure that some of the proposed superannuation changes are grandfathered, if those changes significantly affect Australians who, encouraged by  government, have relied on, and acted on the then rules of the day. Australians should not be penalised for having so acted, when a government wants to change the rules later.

That is our modest goal. But that goal, if achieved, will create a precedent which will benefit millions of working Australians, now and in the future. Not only me and people like me.

 

Jack Hammond QC

Melbourne, 13 June 2016

Save Our Super

Save Our Super is an apolitical community-based group which makes the public aware of the implications of the Coalition’s superannuation legislation and Labor’s superannuation policies.

Some of our supporters vote Liberal/National; some vote Labor; others vote for other parties or independents. But we are united in Our Call For Action by the Federal Parliament.

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