My Budget 2018: Don’t touch super, this investor says

Australian Financial Review

8 May 2018

Joanna Mather

Australians deserve to be free to save and invest unfettered by constant government tinkering with superannuation, says retiree Don McKenzie.

His overriding wish for this year’s budget was, therefore, that there be no more changes whatsoever.

“The government ought to legislate so that nobody can touch super,” he said.

“All of us, no matter how much money we’ve got, need to have the confidence that the super legislation will not be tampered with to the extent that individuals will be worse off.”

Mr McKenzie’s plea follows several years of upheaval in retirement income policy, including the 2016 decision to impose a $1.6 million limit on how much super could be transferred into an individual’s tax-free pension account.

The year before that, Treasurer Scott Morrison [sic] changed the pension asset test to make 172,000 pensioners better off by $30 a fortnight.

But another 91,000 retirees with assets of $823,000-plus lost their part pension.

A former partner of Ernst & Young and national chief executive of Gadens law firm, Mr McKenzie and his wife are retired and live in Breakfast Point in Sydney’s inner west.

While Mr McKenzie, who has a self-managed super fund, was displeased with the $1.6 million transfer balance cap, he is absolutely livid about Labor’s plan to make franking credits non-refundable.

“Paul Keating introduced the compulsory super scheme to encourage people to move away from the welfare state,” he said.

“Similarly, franking credits were meant to encourage people to move into ways of earning income through capital.

“That was a Labor government initiative aimed at strengthening people’s financial independence but Bill Shorten is trying to turn that all around and bring us back to a welfare state.”

Along with watching for health and infrastructure announcements, Mr McKenzie said he would be happy as long as the Coalition didn’t go near franking credits.

“We’re comfortable enough under the current system to earn somewhere around $150,000 a year between us,” he said.

“There is a good 50 per cent of our capital tied up in fully franked dividends so I can see $20,000 or $30,000 going out the door if Labor is elected.”