Increase in Super Looking to Get Axed - Thoughts?

Trying2SaveABuck on 23/11/2020 - 15:37
Last edited 23/11/2020 - 15:41

An increase in superannuation would cut lifetime wage earnings for the average Aussie by 2 per cent and lower-income earners would be hit the hardest, a long-awaited review has found.

The government is paving the way to scrap a legislated super rise after the retirement income review found current policy settings were “effective, sound and … broadly sustainable”.

The review warns the “weight of evidence suggests the majority of increases in the super guarantee come at the expense of growth in take-home wages”.

It instead emphasises “voluntary saving” and home ownership as key to long-term financial security.

Treasurer Josh Frydenberg said most Australians would be better off if super wasn’t increased.

Working life income, for most people, would be around 2 per cent higher in the long run,” he said.

'The Coalition had committed to boosting super from 9.5 per cent to 12.5 per cent by 2025. Labor also backed the move.'
https://www.news.com.au/finance/superannuation/treasurer-jos…

Poll question do you support an increase in super from 9.5% to 12.5% in the next 5~ or so years:

My two cents: I support an increase in mandatory super contributions - however i think access to super needs to be less restrictive - ie full access at age 50, able to use super to buy a 1st home, easier ability access super in times of hardship etc - but i fully expect that i would be in the minority

Poll Options

  • 146
    Mandatory Super should be Increased
  • 16
    Mandatory Super should remain unchanged
  • 11
    Mandatory Super should be decreased
  • 1
    Other
Financial Superannuation

Comments

  • RiseAndRuin on 23/11/2020 - 15:44
    -7

    Treasurer Josh Frydenberg said most Australians would be better off if super wasn’t increased.

    This must be the first time an Australian politician ever got something right (sadly, not a joke).

    People are free to make voluntary contributions, and any increase in mandatory super will be deducted from their pay, so an increase makes no sense at all unless the govt want to help their superfund managing friends.

    • GG57 on 23/11/2020 - 16:19
      +2

      Not all increases to mandatory super will be deducted from employees pay; some are on contracts that have the employer contributions to super as additional components.

      Most?

      • bobbified on 23/11/2020 - 16:31
        +3

        If increasing super is going to be a common occurence, employers will catch on and everyone's pay will just be specified in their contracts as something along the lines of "Total Employment Cost" rather than "Base Salary plus Super".

        Then with each mandated increase in the SG Rate the ratio of Basic Salary to Super will just shift a little. The total cost to the employer will then simply remain unchanged with each increase.

        • GG57 on 23/11/2020 - 16:41
          +1

          Some employers have been doing that for years, because the mandatory Super rate has been increasing for years.

          But my understanding is that all those people on Award pay rates do not have that same structure.

          • bobbified on 23/11/2020 - 17:12

            @GG57: I'm not sure how the award rates are specified, but if it's specified that super is to be paid on top of that specified rate, then regardless of how it's written in the employment contract, then the employer will have to stump up for the extra SG otherwise they will be underpaying their staff.

          • burningrage on 23/11/2020 - 19:25
            +2

            @GG57: And this is the thing, many employees are on Total Employment Cost (TEC) basis and it is these people who will worse off.

            My contribution to this debate is simple. It doesn't make sense to have say $100k in Super when you have a home loan or other debt that pays (undeductible) interest. Increasing the mandatory super will bring down the take home for these TEC people and for those who are lucky enough not on TEC for now, we will soon see the terms of the contract / award to be reworded into TEC.

            If you have no home loan and excess income, great, that's voluntary contribution is for.

            I am not on TEC but I don't support lifting the super at all. If anything, it should be decreased.

            • SlickMick on 24/11/2020 - 18:41
              +1

              @burningrage: It does make sense actually. Interest rates are the lowest ever. Money in super would far out perform paying your home off faster.
              The gov is trying to get people to afford retirement. It will require a whole lot more saving and a whole lot less spending, something some people are really bad at and need policies like this.

      • RiseAndRuin on 23/11/2020 - 16:35

        Edit: good luck everyone if/when mandatory super is increased

        • bobbified on 23/11/2020 - 16:43

          that at least some of the biggest employers in the country have that set either explicitly in their contracts for permanent staff

          You're definitely right. Some employers specify your remuneration as "Base Salary, plus Super", where they specify your Base Salary amount only, while others will specify your "Total Employment Cost", being a certain amount and everything comes out of there.

          • RiseAndRuin on 23/11/2020 - 16:50
            +1

            @bobbified: I removed my previous comment, as people seem to disagree and I have no time to quarrel, but contracts from the last 2-3 years often have clauses like:

            "Your Total Remuneration includes your base salary and the employer's contribution to your superannuation. The breakdown of your Total Remuneration might change (for example, if legislation requires the employer to change their contribution to your superannuation) but in that case, the overall level of your Total Remuneration will not be less."

            • brendanm on 23/11/2020 - 18:04
              +2

              @RiseAndRuin: I'm fairly sure that most people are not on contracts? Happy to be corrected.

              • bobbified on 23/11/2020 - 18:30

                @brendanm:

                I'm fairly sure that most people are not on contracts

                I think he's referring to the employment contracts rather than being a contractor.

                • brendanm on 23/11/2020 - 18:32
                  +1

                  @bobbified: Ah fair enough. Most jobs I see are advertised as $x+ super. Package including super is a bit of a rubbish way of doing it.

                  • bobbified on 23/11/2020 - 18:42
                    +1

                    @brendanm: The advertisements don't actually always reflect what's written in the contract. At the point you get the job, the total amounts will be the same and you can't really argue that they should change their standard contract because you run the risk of getting a call the next day to say that they've withdrawn their job offer! haha 🤣😂

                    I work at one of the largest superannuation providers and they've got it covered: It says "Total Employment Cost"! Not that I really should've expected anything else! LOL

                    • RiseAndRuin on 23/11/2020 - 19:20

                      @bobbified: That's correct, jobs can be advertised in a number of ways, however you need to check what's written on your contract or sometimes even check with HR/payroll/finance about internal policies that you might not be fully aware of.

                    • brendanm on 23/11/2020 - 19:22
                      +1

                      @bobbified: I see. I've always been paid $x+super. I haven't worked for tight ass large corporations though, so that may be why. Also in a sector that won't be withdrawing job offers if they like you 😁.

                  • brad1-8tsi on 24/11/2020 - 00:28

                    @brendanm: Even the state government advertises "Total Remuneration package = $xxx (includes SGA contribution and leave loading)"

                    The other crap thing employers do is only pay super on the base rate and exclude bonus, leave loading or any other extra payment.

                    Or if you salary sacrifice they don't pay super on the salary sacrificed amount.

                  • exceladdict on 24/11/2020 - 09:41

                    @brendanm: Yet in this economic environment, many would take the package they are offered, rubbish or not. And they would be worse off (especially in the short term) after a super increase.

                  • SlickMick on 24/11/2020 - 18:48

                    @brendanm: Might be advertised like that, but in all of my experience when it comes down to it, the employment agreement has a total remuneration package.
                    From the employer's point of view, it makes no difference what is wages and what is super, but they aren't willing to give more than the total amount agreed.

                    It would only be if unions and EBAs that have arranged a guaranteed base salary, I doubt that would apply to anywhere near most people.

                • RiseAndRuin on 23/11/2020 - 19:24
                  +2

                  @bobbified: Yep, I meant contract of employment. Apologies if there was any confusion.

  • mskeggs on 23/11/2020 - 16:03
    +33

    Everyone keeps saying that pay rises will be lower if super goes up.
    I hate to break it to them, but pay rises have been garbage for years.

    • netjock on 23/11/2020 - 17:09

      Who cares if you make more from property. It is like a quarter acre size ATM!

      On a serious note. They need garbage salaries so they can spread the cash around to more migrants / gig economy workers. Otherwise half will be driving around in European cars and the other half on welfare. Everyone on garbage salaries, save on welfare.

      Politicians trying to not increase 0.5% super and save on tax concessions given out.

      • Kangal on 23/11/2020 - 19:13

        Agreed.
        Super contributions should increase. Pay rises are like a "pinky promise" one that hardly comes to those deserving of it. I've seen salaries stagnate even in positions that are in-demand, just because many people are "nice" and won't battle for more. People who are intelligent enough to work the system, or those ambitious enough to strive further… these few peoples will naturally reach higher salaries anyway.

        • Ultimate Gattai on 25/11/2020 - 01:47
          -1

          I think because the job market was so bad before Covid, people were afraid to push for what they deserve, I find it hard myself because there's even less jobs going around at the moment, plus my union did a bad job at the last bargaining they had.

    • [Deactivated] on 24/11/2020 - 16:38

      Speak for yourself, my and all my friends pay rises have been great.

      • mskeggs on 24/11/2020 - 17:22

        Maybe you have a strong union, or at the early part of your career where wage growth is structurally higher?
        ABC story, key quote “ Household incomes have stagnated since the global financial crisis.”

        https://www.abc.net.au/news/2019-07-12/household-income-and-…

        • [Deactivated] on 24/11/2020 - 17:47

          Ah yep, that early career part would explain it.

  • avoidfullprice on 23/11/2020 - 16:16
    +11

    If you can manage your finance well, the change in the scheme doesn't really affect you, as you can voluntary contribute. My opinion is the scheme is there to help future taxpayers from the less financially aware workers.

    As I'll be a taxpayer for a very long time, and that I have no faith the population financial literacy will improve drastically, I hope for mandatory guarantee increases soon. This in addition to protect hospitality workers and casualised workforce

    Point in case is watching commercial channel evening News one night, and they touted afterpay as a smart way for buying. This followed by a person saying proudly "I only use after pay for things I don't really need it or have money to pay for" and then covid put them in financial stress so casually say "watch out for that". No.

    There is going to be consequence of we increase super guarantee or not.

  • Kail on 23/11/2020 - 16:18
    +6

    It instead emphasises “voluntary saving” and home ownership as key to long-term financial security.

    If more people employed "voluntary saving" for their retirement we wouldn't need super in the first place.

  • whooah1979 on 23/11/2020 - 16:35

    It instead emphasises “voluntary saving” and home ownership as key to long-term financial security.

    Why give some fat cat CEO your hard-earned money? Be in control of your own wealth and your future.
    https://duckduckgo.com/?q=fat+cat&t=braveed&iar=images&iax=i…

  • Donaldhump on 23/11/2020 - 17:02
    +2

    easiest way to grow wealth is in super, don't know why more people don't take advantage of it.

    • whooah1979 on 23/11/2020 - 17:22
      +2

      Putting your hard earned money in a 40 year time lock. Not thanks.

      • Donaldhump on 23/11/2020 - 17:31
        +1

        your only hedging your bets by putting 10%-20% of your savings in their, not the whole lot. you will almost double your money by doing so, by the tax differences alone.

        if you make it to 60 you're alout better off. if you suffer a devastating event that sends you bankrupt, you have safe assets.

        if you die your spouse gets a lump sum tax free, and you would be happy knowing she/he is looked after
        if your spouse dies the same applies to you

        and if things go really pear shaped you can always get it anyway through hardship privisions

        • whooah1979 on 23/11/2020 - 17:48
          +1

          How did your hedge (super) go in March this year?

          The reality is that people pay strangers to look after the second important thing in their life. There strangers have time and time again shown to be no more than crooked salespeople.

          People should do themselves a favour and DYOR and take control of their financial affairs.

          • Donaldhump on 23/11/2020 - 17:55
            +5

            @whooah1979: my super went down 90k in 4 weeks, i pumped another 10k in, its now up 120k but since i haven't sold a thing, what's the difference, only matters when i sell at 70 etc. my super has done well. this is irrelevant anyway, even if you invested outside super you would still suffer the same loss.

            and you can take control of your financial affairs with an smsf and use it as a tax efficient wealth creation environment purchasing the exact same shit inside super as opposed to outside super. i can buy land and lease it to my business and my business can pay rent to it, shit is so simple.

            simple scenarion

            i give you a $100 today,

            option 1.) you must give the ato $34 straight away, and from today onwards you must pay %34 on earnings
            option 2.) you must give the ato $15 straight away, and from today onwards you must pay %15 on earnings, then in retirement you can leave in a phase where it is tax free of earnings.

            • whooah1979 on 24/11/2020 - 09:29

              @Donaldhump: It’s good that the current system is working for you and you happy with your gains.

          • brad1-8tsi on 24/11/2020 - 00:37
            +1

            @whooah1979:

            How did your hedge (super) go in March this year?

            I'm in a high risk investment sector. Mine went down 8% at the lowest period but has since recovered back to just above the previous highest balance.

            I'm looking forward to this time next year when I can start pulling a $60k/yr tax free income from it.

            • whooah1979 on 24/11/2020 - 10:24

              @brad1-8tsi: An 8% loss is good for a high risk portfolio when some markets took a 30% dip.

              • brad1-8tsi on 24/11/2020 - 10:56

                @whooah1979: Yes, I was a bit surprised. In the GFC I went backwards 30% in a "conservative" portfolio. It took 5 years to recover.

                Current mix is:
                33% Au equities
                48% Int'l equities
                10% cash / fixed income
                9% Property / Infrastucture / Private Equity.

                So it appears the super fund is gone to the maximum cash it can go to under their target asset mixes. I assume because of all the cry babies having a spew about losing money in volatile markets.

                I'll have to rebalance the investment mix next year and reduce the risk a bit.

                • Donaldhump on 24/11/2020 - 13:02

                  @brad1-8tsi: I was 100% in Aussie shares, which is why I got destroyed.

                  Australian Shares 46.39%
                  International Shares 36.52%
                  Unlisted Property 5.82%
                  Infrastructure 3.93%
                  Private Markets 2.81%
                  Alternative Debt 2.25%
                  Listed Property 1.16%
                  Other 1.12%

                  i also have 1c in cash, which i cant get rid of.

                  Cash 0.01 0.008 1.66576 0.00%

      • netjock on 24/11/2020 - 00:31
        +2

        Putting your hard earned money in a 40 year time lock.

        To prevent people pissing it away on the opposite sex, drinking, gambling and buying useless stuff incentivized by tax cuts sounds like a good deal to me.

        • whooah1979 on 24/11/2020 - 10:19

          I guess some people are fortunate to be smarter with their finances and not waste their money on vices.

          • netjock on 24/11/2020 - 11:00

            @whooah1979: Don't need to be that smart, just smart enough to save it, invest it and put money into those vices using dividends that you can afford.

  • netjock on 23/11/2020 - 17:04
    +2

    An increase in superannuation would cut lifetime wage earnings for the average Aussie by 2 per cent and lower-income earners would be hit the hardest

    Why would it? If you believe in people with bad math. If you made $100k total and super goes from 9.5% to 10%. Still your money except you pay 15% instead of 32.5% tax.

    It is just garbage. Politicians means cutting government lifetime earnings FROM YOU.

    It is well known fact that lost tax revenue from super tax concessions doesn't help the government pension bill one bit because people take out their super and blow it (on whatever they like) then get on the government pension anyway. Most economists are for the rise, saying proceed or defer due to COVID

    If you look at the tax system the only way you can get any meaningful tax reduction is through super concessional contributions (because it comes out tax free at the end).

    You know times are desperate when you need 0.5% to prop up the economy. 50c out of $100.

    • bobbified on 23/11/2020 - 17:18
      +1

      I don't necessarily understand, but some people seem to budget down to their last dollar (whether there's good reason or not). The extra couple of dollars may not make much difference to some, but others will feel it.

      • netjock on 23/11/2020 - 17:38

        I don't necessarily understand, but some people seem to budget down to their last dollar (whether there's good reason or not)

        Time spent budgeting down to last dollar is better spent either cutting expenses or learning a new skill (freezing spending). Unfortunately lifestyle inflation seems to be order of the day.

    • leiiv on 23/11/2020 - 17:28

      Are you saying that, after reaching the preservation age, people can spend all of their super immediately, and then be eligible for the government pension afterwards until they die?

      • netjock on 23/11/2020 - 17:33

        Yes, per this page

        Pension you will have an asset test and that has rules to stop you gifting more than $30k in last 5 years. You can give more but it will be counted as part of your assets. Otherwise you can blow all your pension on whatever you want.

      • Donaldhump on 23/11/2020 - 17:34

        yes, but why would you want to do that.
        most people would work out the minimum amount to spend to enable them to get full age pension. thats my plan 60-67, but im sure government may restrict people to only use a certain percetage each year.

        • netjock on 24/11/2020 - 00:35

          why would you want to do that

          I wouldn't know, you'll have to find someone who blew it all in a short period of time to answer that question.

          There is already talk of bringing the family home into assets test for the pension (just rumors but probably not far fetched).

          government may restrict people to only use a certain percetage each year.

          UK system of zero tax going in, zero tax on super investment returns but taxed at marginal tax rates (with a third tax free) sounds like the best system.

  • Drakesy on 23/11/2020 - 17:22

    Classic case of Frydenburg once again trying to top up his failing economy with a short term dip into everyone's retirement savings (did it with the early super withdrawal) except this has lasting, long term effects. Looks like we'll be keeping the pension system for years to come.

    If the economy was going swimmingly (i.e. the government hadn't already driven us into a recession) this would pass without people batting an eye lid. I'm still yet to see Frydenburg make a call that benefits Australians in the long run.

    • bobbified on 23/11/2020 - 17:33
      +1

      …trying to top up his failing economy with a short term dip into everyone's retirement savings (did it with the early super withdrawal)

      It's not like he was taking a certain amount out of everyone's super to redistribute to the poor.
      The money belongs to the individual and if it's the difference between having money to put food on the table or having a roof over their heads or not during these tough times, then the individual should be allowed to access their money to do so.

      • Drakesy on 23/11/2020 - 17:41

        I understand it is their money, however it is set aside for their future. If people weren't so heavily leveraged/indebted in paying off their massive mortgage (that the property market has rigged from day 1) then they'd have more money left over as an emergency fund or a larger disposable income.

        My approach would be to reset the housing sector (or at least inflate it out) rather than cutting funding from peoples future (which will increase the number relying on pensions).

        Yes, it's a tough time but at the moment his approach is dubious at best, it's literally robbing them of a comfortable retirement to ensure the unfeasible housing market stays propped up. With no wage growth he's running out of options.

        • bobbified on 23/11/2020 - 17:50

          You can easily argue that people should have money set aside for a rainy day - that is, with health/sickness insurance and everything or some money put aside in their account.

          But let's be honest here - no-one expected to be hit by this pandemic so suddenly and with such a huge effect on both the individual and the economy for a prolonged period. None of the insurance policies that have been put in place by a "responsible" individual are triggered and most savings wouldn't last for that many months. What else can one do? The government doesn't have an endless supply in cash to simply hand out to everyone in need. So really, it's a case of "desperate times call for desperate measures". Despite all the sensationalist articles in the media, the $10k or $20k doesn't have to have a significant impact on someone's retirement savings in the long run. It can easily be replaced by the individual by making small voluntary contributions over a period of time. Again, it's the choice of individuals.

  • bobbified on 23/11/2020 - 17:28
    +2

    They can increase what they like, but I think they should ease up on some of the conditions they allow for early release. At the end of the day, the money in the account belongs to the individual.

  • 2jzzzz on 23/11/2020 - 17:44

    Do people hold a worry that one day the govern t can take a chunk of your super?

    • whooah1979 on 23/11/2020 - 17:52
      -1

      APRA has the power to instruct the financial institution to raid your super to prevent a collapse of the company.

      We can thank the GFC for this.

      • brendanm on 23/11/2020 - 18:07

        What happens if you are doing self managed? I often worry about these morons doing things like this.

        • whooah1979 on 23/11/2020 - 18:13
          +1

          Park you money in asset classes that isn’t under the APRA control.

      • Seraphin7 on 23/11/2020 - 19:03
        +1

        APRA has the power to instruct the financial institution to raid your super to prevent a collapse of the company.

        What are you talking about? Can you link to some further information on this please?

        • whooah1979 on 23/11/2020 - 20:15
          -1

          Treasurer Scott Morrison was the person responsible for pushing this bill.
          https://www.legislation.gov.au/Details/C2018A00010

          11CAA Definitions
          In this Subdivision:
          clearing and settlement facility has the meaning given by Division 6 of Part 7.1 of the Corporations Act 2001.
          conversion and write‑off provisions means the provisions of the prudential standards that relate to the conversion or writing off of:
          (a) Additional Tier 1 and Tier 2 capital; or
          (b) any other instrument.

          • Seraphin7 on 23/11/2020 - 20:22

            @whooah1979: This legislation relates to banks and the capital they hold on their balance sheets are required by relevant banking prudential standards (which in turn reflect the Australian interpretation of the international Basle capital requirements for banks).

            This has nothing to do with superannuation and certainly nothing to do with APRA "raiding your super to prevent a collapse of the company".

            • whooah1979 on 23/11/2020 - 20:39

              @Seraphin7: The Act covers regulated bodies and regulated businesses that report to APRA.
              https://www.superguide.com.au/comparing-super-funds/list-of-…

              The worst thing that can happen if I wrong is that I'm wrong. The worst thing that can happen if I'm not wrong is people becoming shareholders of a doomed company against their will. It doesn't affect me either way.

              • Seraphin7 on 23/11/2020 - 22:37

                @whooah1979: The Act you referred to originally is the Financial Sector Legislation Amendment (Crisis Resolution Powers and Other Measures) Act 2018 that amends the Banking Act 1959.

                The superannuation industry is primarily governed by the Superannuation Industry (Supervision) Act 1993. These are entirely separate pieces of legislation.

                It is correct that the legislation (in both cases above) provides APRA with the power to create prudential standards and various other instruments that further regulate the behaviour of participants in these industries. APRA also has responsibility for the insurance industry (life, general, and private health), each of which are governed by their own piece of legislation, prudential standards, and other legislative and regulatory instruments.

                It is entirely incorrect to the suggest that the powers APRA has via one piece of legislation relevant to a particular industry can simply be "applied" to industries/participants governed by separate legislation. In any event, the "conversion and write-off provisions" you originally referenced refer to when banks hold relevant assets as capital per their requirements and those assets need to be either written off or converted to another asset.

                For all of the problems the superannuation industry has because of government meddling, there is no ability for APRA (or any other legislative or regulatory body) to instruct a financial institution to "raid superannuation to prevent the collapse of the company". Any suggestion that such abilities exist is at best uninformed, likely mischievous, and in the worst case entirely misleading and disingenuous.

        • netjock on 24/11/2020 - 00:39

          Tin foil hatters believe there will be a bail in (taking depositor money held a banks) which obviously contradicts with the $250k deposit guarantee which means anyone unlucky enough to have more than $250k with the bank going bust is taking a big hair cut.

          Only country that has done it is Cyprus.

    • bobbified on 23/11/2020 - 17:55
      +1

      They already do! The legislation changes every year - it's what keeps me in a job!
      They may not blatantly just take a chunk of your account, but they'll start putting limits on how much you can have in your super over a lifetime and increase the taxes accordingly if you have more. And with the existing concessional limits, they will eventually stop indexing it so that more people hit those caps - not too different to how the income tax bracket creep works now.

      • netjock on 24/11/2020 - 00:41

        Yup! Super contribution limits when from $50k to $25k to limit how much you can save (for retirement and tax)

    • tsunamisurfer on 23/11/2020 - 18:03
      +3

      I have worked in financial services for over 10 years.

      I have seen the government instruct Super funds to skim amounts from member accounts to compensate members of totally unrelated funds where they have suffered fraud.

      • bobbified on 23/11/2020 - 18:07
        +1

        I remember this - It was called the Operational Risk Reserve! I was reconfiguring all our systems thinking "this is BS!" lol!

        • tsunamisurfer on 23/11/2020 - 18:11

          I actually forgot the fund the went belly up due to fraud.

          I was responsible for deriving the necessary data for the fund I was working at to formulate the payments.

          Like you I thought it was a joke initially, like why are my members made to compensate other superannuants / pensioners for a fraud they did not commit.

          The amount was small per member (depending on balance), but at a fund level significant.

          • bobbified on 23/11/2020 - 18:28

            @tsunamisurfer: I don't remember which fund it was either. It got introduced as part of the "Stronger Super" package.

            They did it based on a percentage while also "reserving the right to increase it in future where there was a need".

            • tsunamisurfer on 23/11/2020 - 18:45

              @bobbified: Simpler Super?

            • tsunamisurfer on 23/11/2020 - 18:58

              @bobbified: I think the fraudulent fund was called Trio.

              It was at the tip of my tongue (but in the end I googled it) as my colleagues and I were trying to think up the (dodgy) names of the Transaction that will appear on the member statements.

              However my manager had to get these vetted so they had to be non funny or provocative etc.

              • bobbified on 23/11/2020 - 19:23
                +1

                @tsunamisurfer: What did it end up being called? I can't even remember what we called it, but I do remember that we tried as best as possible to try to hide it! LOL

                • tsunamisurfer on 23/11/2020 - 19:30

                  @bobbified: LOL can't remember, I wanted to call it something that would jump out to the member and hopefully trigger an avalanche of outrage at this type of Socialism.

                  The management wanted a more benign transaction name / description which teetered on the edge of being open without divulging the nature of the transaction.

                  My suggestions didn't even get shortlisted.

                • Ghost47 on 24/11/2020 - 19:47

                  @bobbified: I love this country, best country.

  • tsunamisurfer on 23/11/2020 - 17:59

    however i think access to super needs to be less restrictive - ie full access at age 50, able to use super to buy a 1st home,

    If they use their entire Super nest egg on a home purchase, how are they supposed to feed themselves?

    The government must not allow these people to blow the whole lot or must disqualify them from any welfare if they do spend the whole amount.

    • Trying2SaveABuck on 23/11/2020 - 18:05
      +1

      Did i say they would use there nest to pay for a house?

      It could of a partial amount it could just be used a security to help get access to a loan - there are loads of ways you can tweak the rules to help those struggling?

      • tsunamisurfer on 23/11/2020 - 18:07

        Did i say they would use there nest to pay for a house?

        full access at age 50, able to use super to buy a 1st home,

        What does full access indicate to you?

        • Trying2SaveABuck on 23/11/2020 - 18:11
          +1

          there is a comma - full access at 50 are for those who are rich enough to retire younger - ie you shouldnt have to work to 67 if you got 2m in super at 55

          use it for purchase of property is for the 25 y.o young couple looking to get out of the rent trap - it was meant to be a separate point

          Sorry if that wasnt clear

          • tsunamisurfer on 23/11/2020 - 18:44
            +1

            @Trying2SaveABuck: OK sorry I didn't make that distinction.

            I think my position would still be the same.

            If you take your Super out early, one should be taxed heavily or prevented from claiming welfare.

            I think using super for home purchasing is a bad idea from a price affordability POV

            • Trying2SaveABuck on 23/11/2020 - 18:48
              +1

              @tsunamisurfer: Fair enough - my biggest issue with super is the government can 'move the post' whenever they want the retirement age is 67 years old now by the time i get to my retirement (currently im 30) it cold be 80y.o.

              A lot of people wont make it to live that long - the system is simply too flat, your health starts to deteriorate at around 50-55 years old (esp if your jobs physical) in most cases you shouldn't be forced to work if you don't have too.

              Super is you should be allowed to access super when needed - if anything the 'welfare system' needs to change to stop people who simply cbf working get benefits.

              I own two houses but so it wouldnt make a difference to me but i do know people traped in the rent trap and if they could get access to finance it would change there lives.

              • tsunamisurfer on 23/11/2020 - 20:23
                +2

                @Trying2SaveABuck: I understand your frustration.

                The preservation age was 55, now 60 and will likely be closer to 70 when my time comes.

                Its the government modus operandi, make it harder and harder for people to get their retirement funds, they have to work longer and hopefully stay off welfare longer.

              • netjock on 24/11/2020 - 00:43

                @Trying2SaveABuck:

                I own two houses but so it wouldnt make a difference to me

                They are coming for you with annual land tax that will replace stamp duty!

                • Trying2SaveABuck on 24/11/2020 - 18:33

                  @netjock: I dont mind if they do ill just flip houses every 5 years opposed to the long hold method - getting rid of stamp duty actually helps rich people it will push prices higher and increase turn over of property - however it will not help 1st home buyers in the medium and long term.

      • Pro-crastinator on 24/11/2020 - 17:51

        Very good idea in theory, but problem would be where people rent for their working lives and then buy their first house at age 50 when they have access to their super, and therefore finally enough to buy one… but then they won't have enough to live off after that.

        Also, using superannuation earlier than absolutely necessary will kill the major benefit of compounding interest which really only happens in the later few years, after a number of years of saving. So early access, and/or early termination will potentially result in many people unnecessarily getting much less than they otherwise would.

        Of course, this is all based off 'normal' income people… but (and I don't know super rules that well) but can't you already apply for early access with proven financial hardship?

        • netjock on 24/11/2020 - 21:48

          You correctly pointed out:

          Live within your means and buy a house

          Live within your means and put away into your super

          Problems seems to be you have close to zero savings whether you are on $45k, $90k, $180k or $250k. Lifestyle seems to inflation to match.

  • brendanm on 23/11/2020 - 18:06
    +1

    I support an increase in mandatory super contributions - however i think access to super needs to be less restrictive - ie full access at age 50, able to use super to buy a 1st home, easier ability access super in times of hardship etc

    Please no. So many people will waste it, then we will be back to paying pensions again. If people want to buy houses, they need to reduce their expectations. They aren't going to get a 4 bedroom house on a quarter acre block 5 minutes from the city.

    • Trying2SaveABuck on 23/11/2020 - 18:09
      +1

      This is fair enough - ill say this since the introduction of super the % of people (retired) on the pension has not change ~71-73% of the population….

      This the super system has not actually worked….

      • brendanm on 23/11/2020 - 18:12

        You realise it didn't start that long ago right? People born in the late 70s to 80s will be the first ones who have had a super setup for their working lives. We still have a while to go before they start retiring.

        • Trying2SaveABuck on 23/11/2020 - 18:16

          fair point i take that - prior to that 7% of all revenue was meant to go to retirees the Whitlam? govt put 'retirement money' into consolidated revenue (we are talking a lot of money) and blew it essentially what was the super system prior to the super system? - they later means tested the pension screwing the workers who contributed to that 7%…they have 'dressed it up' as helping the least fortunet but essentially it is the biggest tax increase on the working class man in Aus history but that gone almost unnoticed.

          They changed to the current system so that the government couldnt just blow the cash again (now fund managers take it in fees if your not careful) imo it needs to be increased as the cost of living is a lot higher now then back then. But we should never forget that it is your money and when needed you should have access to it.

          I like the super system i dont know if it is the best system but i was just making a bit of a point in my last post

          • brendanm on 23/11/2020 - 18:27
            +1

            @Trying2SaveABuck: Super is good, but does have issues. I agree access is an issue, they shouldn't be able to keep pushing the goalposts as to when you can access it. It should also NEVER be able to be accessed by the government or subsidiaries for any reason. It is NOT their money.

            I personally don't have a problem with them increasing super, my pay is (pay+super) so it will only have a positive effect. Perhaps not so for others. People can always choose to put money into super themselves if they wish. I personally don't, as I get much better returns using the money myself.

            • Trying2SaveABuck on 23/11/2020 - 18:28
              +1

              @brendanm: I work two jobs one of them is the same as you salary + super + Benefits
              my other is my side hustle in which i pay myself super a flat 10%

              So i get where you are coming from

  • Blue Cat on 23/11/2020 - 18:37
    +3

    Wow, I am surprised at the number of OzBargainers admitting they are too stupid to save money themselves and want the government to do it for them.

    I, for one, am happy, as this means more money in my pocket right now, and some money right now is more important than whatever the government will drip-feed when I reach the estimated pension age of 75 or whatever the government will decide at the time.

    • Trying2SaveABuck on 23/11/2020 - 18:44
      +3

      This is the issue with super the government can just 'move the post' and there isnt much you can do about it. Thus i think access age should be reduced not increased

      • Blue Cat on 23/11/2020 - 18:51
        +2

        Agree 100%.

        If super is such a great and amazing idea, just make it not mandatory and see how everyone is gonna opt-out of this government scam.

    • brendanm on 23/11/2020 - 19:25

      Wow, I am surprised at the number of OzBargainers admitting they are too stupid to save money themselves and want the government to do it for them

      It has far less to do with the individual. You know that lots of people are terrible with money right? What's going to happen when they've spent everything they've earnt, have never bought a house, and now need someone to pay for their rent, food etc the rest of their lives? Everyone else pays for it. Super is fantastic, as it, (hopefully), largely reduces the amount of people like this.

      • exceladdict on 24/11/2020 - 09:54

        In this scenario, someone who has demonstrated years of financial mismanagement would probably blow their super in the same way when they get access to it. And then remain on the pension with rent assistance.

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