Taxing the fabulously rich, including politicians

I’m not actually sure that all this speculation about additional tax imposts on superannuation is taken from any political playbook.  What tends to happen is:

  1. People’s fears run ahead of anything being contemplated.
  2. The actual revenue gain for the government is likely to be quite small in relation to the political harm done in the meantime.

The closest parallel seems to be Latham’s hit-list of rich – fabulously rich, indeed – schools whose government grants were to be cut in toto.

There seems to be a profound misunderstanding on the part of politicians and in the liberal press of how the taxation of superannuation is actually effected and scant acknowledgment of restrictions on the use of superannuation by higher income earners.

To be sure, it is like the man heading towards Dublin, we are not starting from a good place.

The preferable tax arrangements would be zero tax on contributions and earnings and normal taxation on retirement incomes.  This is in fact the system employed mainly overseas, including in all those social democratic countries.   But given our current mish-mash, it is hard to see how we could shift to this nirvana fairly and in any reasonable time frame.

So here’s the deal:

  • Contributions are taxed at 15 per cent, except now for those on very high incomes ($300K per year), contributions will taxed at 30 per cent.
  • This flat rate of tax was introduced deliberately and carries very low transaction costs.  Superannuation funds do not know, and do not need to know, how their members’ taxable income levels.
  • Earnings are taxed at 15 per cent, but there is the complication of franked dividends.  However, all domestic investors enjoy this benefit.
  • There is some discount of CGT within funds.

If you can hang out to age 60, there is no tax payable on superannuation if paid from a taxed source.  (CSS is not taxed as a counterexample and CSS pensioners receive an income tax rebate instead.)

Now on the face of it, that flat rate of tax on contributions and earnings looks quite generous to high income earners.  But and it is a big but … everyone is only permitted to contribute $25,000 per annum in pre-tax income.

Moreover, the figure includes the compulsory CSG.  So anyone earning above $278,000 is actually paying excess contributions tax even though they will not be paying a single cent in salary sacrifice to superannuation – GO FIGURE the logic to that one.

Higher income earning employees are already being additionally binged, through the new 30 per cent on contributions and the payment of excess contributions tax on the SGC which must legally be made on their behalf.

So if the government wants to rein in lots of additional revenue, it will need to go  after many people on lower incomes and possibly contemplate a form of Cypriot theft by imposing a tax on accumulated balances.  Will the liberal press cop it?  Probably, but seriously.

There are also some very significant issues about how these new rules can apply to those on defined benefit schemes, including the politicians on the older scheme (including fabulously rich Craig Emerson).  The politicians have declared that all these new rules apply to them, but because there are no actual contributions, it remains to be seen how the new taxes will be levied. (I won’t be taking their word for it.)

In any case, the defined promise remains and so it is not clear how they can be equivalently affected relative to those on accumulation schemes.  Just rank hyprocrisy, I say.

All politicians should be made to transfer their current entitlements as a cash amounts into  accumulation funds and live like everyone else.

 

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69 Responses to Taxing the fabulously rich, including politicians

  1. stackja

    All politicians tax-funded individuals should be made to transfer their current entitlements as a cash amounts into accumulation funds and live like everyone else. Age pensioners already do this I believe. So why not other tax-funded individuals?

  2. maurie

    Any sensible approach to superannuation in Australia would immediately destroy the free feeding bowl Keating gifted to our unions. A simple system would see a surcharge on income taxes increasing slightly as incomes increased & on retirement paid as a pension commensurate with the appropriate surcharge so those with higher payments receiving higher pensions. The resulting piggy bank could then be utilised by governments to develop infrastructure, rather than increase taxes & other penalties in their never ending efforts to rake in money.

  3. brc

    Maurie, that is a terrible idea. The current system has the general idea right, but needs to be streamlined and inoculated against further politicians of the swan variety.

    The situation you describe is the same as the us social security system. Workers pay in, retirees get paid out. In theory there should be a large sovereign wealth fund paying out retirees on the income from wise capital investments. In reality you have a ponzi scheme that relies on the new entrants outnumbering the retiring members – an equation which is quickly starting to fail.

    National wealth is the aggregate of the wealth held by the private citizens, not the amount of boondoggle money a politician has to waste.

    You describe a situation whereby swan had a multi-trillion dollar infrastructure fund to invest into the NBn and ‘renewable energy’ projects. Investments which are as useful as a giant cash bonfire but slightly less exciting to watch. It has been discussed here many times but large government owned investment pools are a disaster, because nearly all private investment is superior to government investment.

    The best adjustments to super would be simplification of self managed funds, flat tax rates and some type of 15 year moratorium on any tax changes for super at all.

  4. Jim Rose

    A simple system would see a surcharge on income taxes increasing slightly as incomes increased & on retirement paid as a pension commensurate with the appropriate surcharge so those with higher payments receiving higher pensions.

    replacing private retirement savings with a higher income tax would greatly reduce both lifetime labor supply and the capital stock.

  5. Kingsley

    I’m in furious agreement with pretty all of this article Judith but the obligation to pay 9% SG cuts out at about $183K it isn’t open ended

  6. stackja

    replacing private retirement savings with a higher income tax would greatly reduce both lifetime labor supply and the capital stock.

    USA and most of EU eg Greece, Cyprus etc tried this. Very successfully!

  7. dianeh

    All politicians should be made to transfer their current entitlements as a cash amounts into accumulation funds and live like everyone else.

    Agree Judith, I have long advanced that position. In the long run it would save the govt billions in unfunded liabilities by converting all defined benefit funds into accumulated funds.

    But since that is not going to happen, I would suggest a change to the tax regime for superannuation payouts. Anyone on a govt guaranteed pension (to be clear, not social security) must pay tax on the pensions at marginal rates, ie no entitlement to tax free income as they have not risked their capital as those in accumulation funds do. If a beneficiary elects to convert to an accumulation fund, then there will be not tax payable.

    One more change. People taking lump sums should be taxed. The idea of the superannuation regime was to fund retirees to live, not for them to blow on oversees holidays etc, so lump sums should be taxed if over for $10,000 per annum, but pensions resulting from an accumuated fund should not be.

  8. Pingback: Juliar Caesar … | pindanpost

  9. maurie

    Well, I’m quite prepared to bight my lip, but where are the responses to the fact that Keating gifted the unions the rights to manage the default super schemes & they since then have gleefully done so for an appropriate fee! Does everyone find this fact appealing?

  10. Rod Clarke

    Taxing the Fabulously Rich

    The problem with Socialism is this:

    If you re-distributed ALL of Kerry Packers $4Billion amoung all Australians with no government overhead we’d have a one off payment to all Australians of $200. But you’d loose all those Jobs, Channel 9, All those Magazines, Dirfibulators and every thing else he did.

    Same with Gina – if we took every red cent it would be a one off payment of $1000. But all the Jobs, Exports, and Investments disappear.

    Hardly a socialist utopia!!!

    Its easy to look at the mansion on the hill and think “I deserve that”…

    But people never think about sharing it with 20 million other Australians

  11. Anthony

    “The actual revenue gain for the government is likely to be quite small in relation to the political harm done in the meantime.”

    I’m starting to think there’s a rat in the ranks in the PM’s office actually working for the Coalition.

    “All politicians should be made to transfer their current entitlements as a cash amounts into accumulation funds and live like everyone else.”
    Agreed. Good luck convincing Tony Abbott of that, though. When it comes to perks all politicians, bar the occasionally independent like Ted Mack, have their snouts in the public trough. That they have the gall to cut the entitlements of the poor while in that position rankles me (cutting the entitlements of the poor may well be economically and morally justifiable at times, and may indeed lead to better outcomes for the poor in the long run, but in a commonwealth the political class should lead by example.)

  12. Hubert East

    I believe that many problems would be overcome by setting all public promised benefit schemes to accumulation funds forthwith. The tax structures should revert to those that existed at the end of the Howard government. Those structures at least were working. The problem has been with the ALP; treating superannuation as a milch cow for the milking following its profligate spending.
    Then superannuation needs to be left alone for at least ten years with only small adjustments around the edges that may be required from time to time. By this I mean only ‘Small Adjustments’, and not the constant ones that Treasury & ALP have been inflicting on the system.
    Also, in combination with the above, all default options should be removed from awards favouring industry funds. The present conditions select against employees covered in those awards. Those employees should have free choice like everyone else.

  13. brc

    Maurie,yes it is bad tha keating gifted the union controlled super funds peoples retirement funds, but at least they still have a choice to leave that fund if they like.

    Tightening up on the governance of those funds would be a welcome change, but the money is still in private hands, so it is a far better outcome than having the unions or the government actually having acces to the funds.

  14. I’m also in furious agreement and will point out that many commonwealth (not sure about state) public servants did not have a choice over their super schemes.

    And I’ll repeat my previous posts that superannuation would be irrelevant if we had a 15% flat tax and the entire structure of the ‘super industry’ and it’s government regulator would be diverted from working furiously to simultaneously avoid and impose socialist theft to producing something of real value that people actually want to buy.

    Superannuation was always widely available but with very high startup costs, these costs were dramatically reduced with the introduction of IT backend at Superannuation funds. I recall starting my first fund in the 90’s when they waived my $20k joining fee to $10k, I recall my Father saying he never joined because it would have been $50k with regular payments more than he could afford. You can join one now with $1k and $100 a week?

    And it’s none of the Governments business what you do with your money, as George Best said, he spent most of his football earnings on Women and booze, the rest he just squandered away.

    He certainly wouldn’t have voluntarily paid some time serving Trade Union hack to tick off ‘investing’ in faster pornography distribution infrastructure.

  15. H B Bear

    Costello removing both the Reasonable Benefit Limit and taxation on superannuation withdrawal after age 60 was simply hopeless public policy. Another pure Howard election bribe for the baby boomers.

    The Federal government should get serious about introducing some meaningful asset and income tests to the Age Pension too. A part pension is like winning the lottery – rates and utilities relief, PBS and more, all with hundreds of thousands of dollars of assets not including your primary residence.

  16. johno

    Hardly a socialist utopia!!!

    No. But it is a Green utopia!!!

    No nasty industry destroying Mother Earth and humanity scratching out a living in the dirt.

  17. Judith Sloan

    Kingsley – I hear what you say, but if you have more than one employer – which company directors have, say – each company is required to pay the SGC and the employee then gets pinged for excess superannuation tax.

  18. Scott

    Hi Judith,

    Due the the maximum in contribution base many companies only pay around $14k into super despite very high incomes. I’m earning 220k + this year but my employee only pays in around $14k. Why should my 14k in contributions be taxes at twice the rate as someone getting $14k in super on an income of ~160k?

  19. sabrina

    Many of us will like the politicians’ super entitlements same as common public. When it comes to their own superannuation, both parties are in serious agreement.
    I would like to hear from the experts on the veracity of this OECD report – Almost all paying lower rates than under Howard

    Also, there was a Herald Sun item few days ago on the superannuation plan by Tony Abbott
    Again, please give your considered opinion if you can. Thanks in advance.

  20. Greg James

    All politicians, and I mean every single one of them, should only have as their superannuation benefit that which they have paid into it, just like the rest of us.

    I mean, FFS, how can it be that that slumbering fool Swan should be entitled to a tax-payer funded pension of $177K per year, for the rest of the stupid fool’s life, without there being any requirement that he contribute to this?

  21. Jim Rose

    Greg James, the super generous life pensions apply to those elected before 2004. those elected after are in a new scheme similar to the rest of the community.

  22. Judith Sloan

    Yes and no, Jim. They did manage to plump up the new scheme by mutual agreement. I think the employer contribution is 15 per cent.

    There are still plenty of politicians on the old scheme, including all the decision makers, with the possible exception of Shorten.

  23. Judith Sloan

    Scott, well quite. Does the employer pay you the gap between what would have been the contribution on your full salary and the SGC in pay, even if you have to pay top marginal tax rate on that?

  24. Judith Sloan

    sabrina, I think that low income super scheme is a very poor use of taxpayer monies. These people will be on the age pension in any case and all such a scheme does is add a few hundred dollars to super balances.

    I would give it away too.

  25. Jim Rose

    Judith, you are right on the 15 per cent top-up on new members.

    Howard stole the policy from Latham.

    Howard had to carry his own backbenchers with the grandfathering clause.

    when Hawke was tax refoming away in the 1980s, many of the questions in cabinet and caucus were on how the MP or minister asking would be affected personally.

  26. Tator

    Dianeh.
    That is already the case as my defined benefit police pension scheme which I joined 3 years prior to universal super was implemented has tax taken out of it both for any lump sums or ongoing pension, albeit with a small tax reduction due to my paying 5% of post tax income into the scheme. Now this scheme has been closed to new entrants since 1992 due to the 9% compulsory system being implemented.

  27. Jim Rose

    some people were grandfathered into nice little earners.

  28. Samuel J

    The ultimate fancy for the ALP:

    Increase the SGC to 18%
    Increase tax of contributions to 30%
    Force everyone into Union run industry funds by closing downs SMSFs

  29. Samuel J

    And increase contributions on earnings to 30% too.

  30. Jim Rose

    Samuel J, you do have a low view of Labor.

    You and Eddie Ward are chips off the same bloc

  31. Chris

    sabrina, I think that low income super scheme is a very poor use of taxpayer monies. These people will be on the age pension in any case and all such a scheme does is add a few hundred dollars to super balances.

    Judith that is pretty much the same argument for not subsidising high income earners’ superannuation. They aren’t going to be on the aged pension anyway so the government gains nothing. The flip side could be that after you’ve reached a certain amount of super savings (such that its unlikely you will ever qualify for the pension) you no longer have any compulsory SGC and its up to you to negotiate with your employer whether the money that the employer would normally contribute goes into your pocket or theirs (eg the government gets out of the way)

  32. Samuel J

    Jim I have a very low view of the present incarnation of Labor.

  33. Hubert East

    Judith & Jim Rose. Are you sure this change in 2004 applies only to politicians or to the Judiciary and other public servants as well?

  34. Ron

    Costello tried to tax contributions based on the contributor’s salary and it was a total stuff up. It probably cost more to administer than it collected and millions were never collected. The problem is that the funds do not know the contributor’s taxable income so they have to submit a list of contributions to the ATO who attempts to match the contributions to tax returns. This process can take years as someone with a tax agent may take a year to put in a tax return. By the time this matching is done the contributor may have moved to another fund or withdrawn from super altogether so there is a further round of administrative work to trace the contributor. Madness!

  35. Jim Rose

    lost track of how many public servant super schemes have opened and closed.

    the judges’ pension used to equal 110% of their salary.

    this was a major recuitmenmt hook for talented 50 something QCs who had spent freely while at the bar.

  36. mareeS

    Our SMSF is doing OK after a big GFC hiccup, but I would like our PM and treasurer to go through the same with their super, see what it’s like to lose 30% and cut their cloth accordingly.

    It’s all very well to live in The Lodge on the public purse, and thumb your nose at the rest of Australia, knowing that the rest of Australia will be paying your super until the day you die, while we have to save and put away money to support ourselves and people like the PM.

    I’m so over that screeching banshee.

  37. Tator

    Chris,
    Someone paying less tax is not a subsidy. They are just keeping more of their own money rather than the taxman taking it and then paying it back as unearned income/subsidy.

  38. Judith Sloan

    The tax of super was ever about redistribution. Keep it that way.

  39. Gab

    Chris,
    Someone paying less tax is not a subsidy. They are just keeping more of their own money rather than the taxman taking it and then paying it back as unearned income/subsidy.

    So keeping the money you earn is now a subsidy? Is that how lefties view working to earn money, that the almighty generous government magnanimously allows them to actually keep some of their hard earned when really it should go to grabberment? That’s seriously effed.

  40. JC

    So keeping the money you earn is now a subsidy?

    Yep, in leftwing world it is. That sack of human debris, Jonathon Faine was basically saying that the other morning.

    Is that how lefties view working to earn money, that the almighty generous government magnanimously allows them to actually keep some of their hard earned when really it should go to grabberment? That’s seriously effed.

    As long as it’s not their money we’re talking about. It only applies to other people.

  41. Gab

    As long as it’s not their money we’re talking about. It only applies to other people.

    Oh natch, that goes without saying.

  42. Jim Rose

    Jc, wealth is a common store for the Left because talents are accidents of birth.

    Rawls spent much time on what you can take with you behind the veil of ignorance.

    This led to a big debate over what parts of your body did you own and whether it included your eyes and whether one eye could be redistributed to the blind in an eye lottery!

    see http://mises.org/misesreview_detail.aspx?control=106

  43. Steve of Glasshouse

    I’m also concerned that the slime in the ALP have also got another fly trap ready for those who decide that super is a crock. Money will go somewhere to earn a return. Hmmm..real estate negative gearing. Limits on negative gearing anybody? I wouldn’t trust these pricks to leave that alone, even with an historical ALP clusterf**k in that area back in the late 80s ??

  44. Mundi

    I still dont get it. So what is the tax on a defined benefit? My defined benefit works out worse now that super is changing upward to 12%, but may come out ahead if earnings are taxed 12%.

    Call me skeptical but I will be assuming the government will steal 100% of my super. i dont count money as mine until its in my hands.

  45. Chris M

    I’m starting to think there’s a rat in the ranks in the PM’s office actually working for the Coalition.

    I’ve wondered this about Gillard at times. Is she paid to destroy the Labor party?

  46. Rabz

    Hmmm..real estate negative gearing. Limits on negative gearing anybody? I wouldn’t trust these pricks to leave that alone, even with an historical ALP clusterf**k in that area back in the late 80s ??

    Yep – that imbecile keating actually got rid of it and then ended up having to reinstate it shortly afterwards – a humiliating backdown to say the least.

    And no, I don’t trust the current squandermonkeys not to try and meddle with negative gearing in the next goose (massive) deficit budget.

  47. Leigh Lowe

    The problem isn’t the “fabulously wealthy” (definition coming soon to a theatre near you).
    The “fabulously wealthy” (formerly known as “the prudent”) are likely to have a cautious approach to frivolous consumption and will spin their savings out.
    That is, they are unlikely to access the pension until they really have to.
    The risk to the Federal Budget is not people with super balances in exces of $1,000,000.
    It is people with balances of, say, $400k to $500k who are tempted to retire short of the pension age and spend on renovations, holidays etc to squeeze in under the pension thresholds.

  48. Leo G

    “All politicians should be made to transfer their current entitlements as a cash amounts into accumulation funds and live like everyone else.” – JS

    Not just politicians, but all benefiting from government defined-benefit pensions.
    Government did not concurrently fund the contributions for those pensions and was able to budget for higher wage levels (than for the situation where the employer contributions were not deferred). In effect, the employee and employer super contributions were only virtual.
    The increasing real cost arising from the unfunded contributions is in part the reason that the government judges the superannuation system to be unsustainable.
    Why doesn’t justice demand only that part, the unsustainable part, be reformed to make the whole superannuation system sustainable?

  49. Brian of Moorabbin

    A little off-topic probably, but the father of a friend posted the following on another website that I’m subscribed to:

    Is there someone out there who can explain the Federal Government’s new banking policy – effective May 2013 – under which they can absorb/takeover bank account that have not had “defined” transactions for three or more years. I understand that bank fee deductions and interest credits are NOT “defined transactions” This means the Trust Accounts I have set up for my grand children and make regular set deposits/transfers to will be taken by the government – because I, personally, have not physically gone to the bank and made a deposit ???

    Is anyone out there aware of this and can provide details I can send back to him?

    Sinc? Judith? Comments?

  50. NoFixedAddress

    maurie 1 Apr 13 at 1:07 pm

    Well, I’m quite prepared to bight my lip, but where are the responses to the fact that Keating gifted the unions the rights to manage the default super schemes & they since then have gleefully done so for an appropriate fee! Does everyone find this fact appealing?

    hey maurie!

    why do you think Crean is trying to tell the fuckwits to shut up.

    green investment… no problem… get one of our union controlled super funds to drop the members money in a flaming flannery deep hole…

    green investment… no problem… get one of our union controlled super funds to drop the members money in a great big wind mill in the sky….

    green investment…. no problems… get one of our union mates to fuck the workers….

    before ANYONE starts tinkering with ALL THAT MONEY… lets actually have a proper Audit … by proper auditors… and see how much is there.

    Good Luck Australia

  51. David Brewer

    All politicians tax-funded individuals should be made to transfer their current entitlements as a cash amounts into accumulation funds and live like everyone else.

    I understand the sentiment but be careful what you wish for. At current annuity rates, politicians like Swan and Roxon would need lump sums of 5 to 10 million dollars to fund the pensions to which they are already entitled.

    For lesser mortals, say middle-ranking public servants, the lump sums needed would be much lower, but then you get another problem, already flagged here. The penpushing bludgers could claim their medium-sized lump sums at 55 or 60 and then blow them on the house, kids, overseas trips etc. before extending a paw for the old-age pension and associated benefits.

    The old defined-benefit pension-only public sector schemes were not just a benefit for the employee. In some ways they tend(ed) to keep costs down:

    – First because the retiree can never claim the age pension or any associated freebies.

    – Second, because if the beneficiary is happy to retire on, say, $50K a year for life, indexed, then he does in fact retire when his entitlement reaches that figure. He does not hang on to build, to some extent at taxpayers’ expense, a colossal lump sum that he is certain will keep him in $50K a year even if he lives to 100.

    – Third, the defined benefit pensions were and are classed as “taxable, untaxed” payments, leaving them liable to income tax when paid out. There is a tax offset, but this only amounts to a full rebate if the pension is fairly low (the cutoff would be on the order of $35K). Recipients of “colossal” defined benefit pensions end up paying a fair whack in tax.

    – Fourth, as was stated for judges above, a generous indexed pension enables lower salaries to still attract top people.

  52. John A

    “All politicians should be made to transfer their current entitlements as a cash amounts into accumulation funds and live like everyone else.”

    I trust that you mean the contributions are made continuously through the term of office of each pollie, rather than being funded in toto when they retire from (or are booted out of) office.

    As long as they can’t backtrack to a pseudo defined benefits scheme by not supplying the employer contributions as and when the pollies sit in seats and enjoy all their other perks.

  53. Leigh Lowe

    The point Judith makes in the Oz is a good one …

    The real problem for the government is there just aren’t enough high-income earners to fleece on a go-forward basis, to raise the billions it wants to spend.

    If they only tax what the community would generally judge to be”fabulously wealthy” there will be so few contributors it will raise a relative pittance.
    If, however, they get Macquarrie Dictionary to redefine the meaning of “fabulously wealthy” …….

  54. Leigh Lowe

    Dullard, Goose and Emerson should re-brand themselves as “Occupy Canberra”.
    Their rhetoric is indistinguishable from that of the dreadlocked hippies of the Occupy movement.

  55. John Mc

    At current annuity rates, politicians like Swan and Roxon would need lump sums of 5 to 10 million dollars to fund the pensions to which they are already entitled.

    I’m assuming that’s because the lump sum to pension conversion rate is way too high under the Defined Benefit scheme, not that the lump sum itself is huge for use at market rates (although I’m sure it’s quite generous)..

    Once their term is finished they should have to make a choice to put their lump sum into a ‘normal’ super fund to take at age 60 like everyone else (after paying tax on the lump sum), or they can take a much smaller pension in exchange for part of their lump sum in case they can’t get employment because the public hates them.

    And whoever said Abbott would consider revising poly perks is totally correct. Tone firmly believes in the ‘corporate politician’ model over the ‘elected to serve’ position. Look at his stance on the last pay rise.

  56. John Mc

    That’s ‘wouldn’t consider’

  57. John Mc

    If we got rid of these types of perks parliament would have substantially less lawyers for a start (is there any downside to that?), and be more representative generally.

  58. Dan

    This is all bull.

    Maybe you guys were there when the rules were different.
    Now that I’m 40 and have enough income to put away some super, I can contribute say 25x$25,000 for a total of $625,000 for an income of say $30,000 a year. I can barely touch the principal because my grandparents are 100 years old and still going. At this rate I will need to fund 40 years of retirement if not m
    What difference does it make; 15 or 30%, super is basically not relevant to my retirement plans and I am paying as little as possible forever. I will hopefully end up in a ridiculously opulent house that I can sell tax free as my retirement plan, which is such a stupid waste of resources.

  59. Rabz

    If we got rid of these types of perks parliament would have substantially less lawyers for a start (is there any downside to that?), and be more representative generally.

    But, but, but – as we keep being told, if we pay politicians peanuts, we’ll end up with monkeys!

    Earth to sanctimonious lefty twats – we have ended up with monkeys – squandermonkeys, no less!

  60. candy

    The PM is paid more than the president of USA, and we’ve got peter Slipper types around on both sides, and c.Thomson happy to take MP salary and yet has been lying all the way through and for some reason is not accountable to anyone.

    It’s no wonder politicans are pretty much despised in Australia and the informal vote hits around 8 to 10%.

  61. Ed Snack

    I don’t get the reference to Cypriot “bank theft”. The banks are broke, if they were left to the market then the depositors would get nothing, including many of the sub 100K Euro insured accounts. The EU taxpayer is contributing billions to bail out the insured accounts, the uninsured get shares plus the balance is kept as a book entry although they’re unlikely to see a lot of that. What’s the problem ?

    Or are you (Judith) somehow advocating that the taxpayers should be further screwed over to bail out every deposit ? I see some theft going on, from the EU (read German) taxpayer, but by the Cypriots and the Cypriot government which guaranteed accounts without the financial ability to pay up.

    It also bears mentioning that a major reason for the bank failures is that they were very heavily invested in Greek Government bonds and so were savaged in the EU arranged write-downs. Those investments were made at least in part on political grounds. Complicated, but I don’t think theft is correct, at least not they way you appear to be implying.

  62. Dan

    Ed can’t you see the problem is that your average worker may have lost his life savings of 100,000 and faces destitution, and the genesis of his problems has been the self-serving machinations of an EU elite. The actual confiscation is a symptom of the problems not the cause. A political decision for a common currency led to absurdly high and unsustainable lending to countries with artificially boosted ratings. If they had all just been left alone they would have sputtered along with a poor but stable standard of living.

  63. John Mc

    It’s no wonder politicans are pretty much despised in Australia and the informal vote hits around 8 to 10%

    That’s in addition to the 8 to 10% that aren’t even registered to vote before you open the polling booth.

  64. Leo G

    “All politicians tax-funded individuals should be made to transfer their current entitlements as a cash amounts into accumulation funds and live like everyone else.”

    Why discriminate according to the source of a person’s income?
    But if a person’s superannuation contributions were (in part or in tota) unfunded, then why should the derived benefit be described as an entitlement?
    An unearned entitlement is a true oxymoron.

  65. Dan

    What incentive to put money in super when the marginal rate is not that muh more than 30% anyway. High income earners can arrange to receive earnings in other than cash sometimes and reduce compulsory payments too. Get ready for mining tax Mark II

  66. kingsley

    Listening to Emerson on ABC radio this morning he seems obsessed with the 30% number ( he evidently doesn’t know they stuck the 30% bracket up to 32.5% this FY) Given they have already introduced legislation to bring “contributions tax” up to 30% for $300K pa income earners and thereby cutting off that supposed injustice they must be going to attack what they regard as high balance funds. Presumably this $800K – $1m number that was leaked a month or so ago. My guess is it is some sort of regime where earnings on a balance in excess of $800K is going to get taxed even in pension phase not at 15% but Emo’s 30%.
    There will be a lot of people maintaining balances just below $800K.

    The Libs also need to be pointing out that these “fabulously wealthy” people also live in “fabulously” expensive CGT free homes -presumably again at around the $800K – $1m mark. How long can it be before they start applying this logic to housing?

  67. Dan

    Earn $100, lose $30 in tax as it goes into super, earn 4% if that in cash, lose 30% of that, down to 2.5% which is less than inflation let alone wage increases, I think I need to get a job in Hong Kong for a couple of years before I retire to bump up the savings with an almost tax-free bonus.

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