RTT_Rules, you've posed quite a lot of issues - have you read this ABC synopsis of the things the Superannuation and Retirement System Inquiry is investigating?
The tax concessions on superannuation funds @ 15% is costing the federal budget $21 billion this year (from memory), it's projected to grow quite a bit in the next five years too.
There's several things that the Commonwealth could do to curtail the cost of the aged pension; Joe Hockey nibbled around the edges with raising the age (later stages cancelled by Turnbull anyway) but if you really wanted to hack into the actual expense before it rises to $70-something billion p/a you've got to -
It's not a law of gravity that access to aged pension/concession entitlements will fall by 2030 - what are you basing that on? And its only a forecast anyway, given that we were supposed to have weaned the majority of retirees off Commonwealth entitlements here in 2019 I'd say that the current superannuation setup is a massive failure destined to get even worse.
- Include the Primary Place of Residence in the assets test. No ifs or buts, if you live in a house worth a certain value then the Commonwealth says "move somewhere cheaper, it's a massive country, take your pick".
- No Commonwealth aged pension for overseas retirees - that money will need to be spent here to ensure it supports the system that supports it.
- Tax the lump-sum takers like nswtrains much harder - sorry but withdrawing the whole lot at retirement age should remove all your tax concessions. See my post below about the need to tax capital rather than labour.
Now you're holding up Johnny Howard as an example of prudence and austerity? The man threw money away like there was no tomorrow - remember $5,000 cash grants just for having a baby? And why on earth is Peter Costello allowed anywhere near the board (let alone leadership position as he currently is) - if ever there was a conflict of interest that's it.
And yeah that's right Shane, we can just sack everyone and have twenty Future Funds and they'll all earn trillions from their stunning global investments and nobody will ever have to work again. Sounds a lot like Multi-level marketing or even a Ponzi scheme.
And you do realise that the Future Fund has also failed miserably - unfunded Commonwealth super liabilities exceed the assets by some $50 billion. Yet another total failure for the taxpayers of Australia, on the hook for more and more money all the time. Thanks Paul Keating, thanks hopelessly broken superannuation system.
I tend to agree in those recommendations, mostly.
We are more mobile today, some reports average Aussie moves every 7 years (If I heard correctly last week). The era of "paid house off over last 25 years, I'll die here" are dying with those still doing that. People move and upgrade, down grade to suit lifestyles, try new things, careers etc. Come to think of it, my house in Dubai we have been in it 7 years this Dec, longest I've stayed in one place since I left home.
Primary place of residence I think median house price and above is fair call, not below.
I would tend to think most people on OAP will live in Aust and likely to have the mindset or finances to live OS cheaper, maybe NZ married to someone?
Yes, lumpsum takers need protection from themselves to a LIMIT. If I have $5M SUPER, then me taking $1M isn't going to see me on the pension. Lets say you need $1M to retire on OAP levels, then lump sums down to there are probably ok. Beyond that no. I wouldn't tax it, I'd ban it.
The 15% tax should be set and linked to the cost of the OAP costs. ie one funds the other, with time as it goes down the SUPER tax also goes down. Everyone can see the link. (Yes I'm a believer of direct taxation).
You cannot ween people off the OAP onto a SUPER system that didn't exist for much or part of their careers and you are being unrealistic to think otherwise. However as SUPER came in around 1995, so 40 year career means 2035 most retirees will have near the full benefit of a working career of SUPER payments, SO YES OAP COSTS will go down by mid 2030's, if not before as the rising SUPER nest eggs start impacting on OAP entitlements.
Peter C was the driver behind the FF, he banked around $40B or so by the time they left govt. Had PC not started the FF, do you think it would have been started by now, indeed under ALP?
He balanced the budget with money left over so yes they had some entitlement to throw some money around. Baby Bonus was to try and solve the OAP issue we are discussing, breed, raise more taxpayers in a declining birthrate. It was successful, birthrate hit 1.9, its now 1.5, so without breeders, we need to import taxpayers and we are.
Hardly conflict of interest and considering he's getting on average 10% pa YOY, leave him there and maybe anyone bitching about poor returns from banks should ask him for investing advise. As I said before at $100M income per employee, the Future Fund team are likely the most productive in the entire economy.
How is the FF a failure, within 15 years with of starting its earning $16 Bpa???? Where would be be today without it, what would be the gap and what is your magical answer to fill it.....?
How is the SUPER system broken ?????