Spart on Super in Spec

The latest from the Spectator Australia:

When it comes to sneaky and deceptive ways to separate citizens from their money, there is no better system than superannuation. Money is forcibly taken from workers on the promise of a comfortable retirement someday in the never-never.  But it’s not tax.  It’s super, as in superannuation.

But before citizens get their promised comfortable retirement, a conga line of ticket clippers, a coalition, in fact, get their go.  From the fund managers to the financial planners to the fund administrators to the lawyers to the insurance companies to the accounting firms to the asset consultants to the custodians to the banks to the brokers.  Oh, and the tax office and the other various hangers-on, like politicians also get their go.

If there’s anything left after the ticket clipping bonanza, that goes back to citizens.  Maybe.  If they’re lucky.  Unless sometime in the future the government decides to nationalise superannuation to pay down some of Australia’s soon to be more than $1 trillion dollars of Commonwealth debt.  You know, like Argentina did in 2008.

More here.

This entry was posted in Uncategorized. Bookmark the permalink.

43 Responses to Spart on Super in Spec

  1. Bruce of Newcastle

    I’ve been amused as I see even more superannuation ads from retail funds, industry funds and the industry fund association. Methinks the massive withdrawals from unenlightened wukkas have been quite painful to the unions. I do hope ScoMo allows a third bite of the cherry. The wailing will get even louder!

  2. stackja

    Was the purpose of superannuation to provide employment to fund managers?

  3. H B Bear

    You know it’s coming. But what do you do?

  4. wozzup

    ” If they’re lucky. Unless sometime in the future the government decides to nationalise superannuation to pay down some of Australia’s soon to be more than $1 trillion dollars of Commonwealth debt. You know, like Argentina did in 2008.”

    Oh come on. I trust f#cking politicians less than I trust used car salesmen ambulance chasing lawyers, or for that matter and more relevantly in this instance, financial advisers. Already we regularly hear from politicians that superannuation funds should be forced to invest in “strategically important” investments for Australia (for which read…for them). If politicians had their way, especially those of a labor persuasion every super fund would be investing in every 5th rate low yield, loss making infrastructure venture in every “strategically important” electorate that will boost their chance of grasping or hanging on to power. Except perhaps for labor run union controlled super funds which will be “invested” in the pockets of the labor hacks who run them.
    I trust politicians with my super about as much as I trust Bill Clinton with my daughter. Or Hillary Clinton with a bottle of gin.

  5. Davey Boy

    “Here’s the truth, brothers and sisters, there’s plenty of money in the world. Plenty of money in this city. It’s just in the wrong hands!” – New York mayor Bill de Blasio

    Coming soon to a Commonwealth near you.

  6. duncanm

    H B Bear
    #3542899, posted on August 10, 2020 at 5:46 pm

    You know it’s coming. But what do you do?

    is an SMSF any safer?

  7. davidf

    Hence why New Zealand consistently downvotes compulsory superannuation every time it is put to pole or referendum. Nobody trusts politicians in the long run.

  8. H B Bear

    is an SMSF any safer?

    I’m not an expert but I don’t think so. More expensive for most people but I think it has benefits for some self employed people. I was always PAYG and couldn’t be bothered with the extra paper work. Presently trying to get most of my super out under medical early access but still need to be careful with tax. And being robbed blind by a financial planner trying to be guided through the labyrinthine regulations. He has a 50 foot boat so ticket clipping obviously pays well.

  9. NoFixedAddress

    TAFKAS, TAFKAS, TAFKAS…. tsk, tsk, tsk

    Taxation and Superannuation monies are legal theft.

    If all the Acts of The Australian Public Service Governments of Australia ™ were rescinded then 80% of the so called working “citizens” of Australia would not have employment.

    Someone has to keep the grand Ponzi alive or otherwise we might end up, and I wouldn’t have known how to say this without a tad of real history, knowing the truth that sets us free.

    Do you take the red pill or the blue pill?

  10. Paul

    It’s much easier to steal a billion from one, than a thousand each from a million.
    a million put their thousand in a million places. One puts it all in property or stocks.
    Supply and demand? What? What?

  11. Terry

    Not ambitious enough Paul.

    They’re out to steal many billions from many millions (some of them not born yet) and when their bank accounts are dry, borrow yet more trillions on their behalf.

    Who said the West had conquered slavery? We’ve just redefined it.

  12. Professor Fred Lenin

    All that lovely money in super funds ,the government should borrow it to get us out of the problems caused by the Chinese Biowar Virus ,after all money belongs to the government ,they print it dont they ?
    When they have resolved this problem of the virus they can borrow more Chinese money to pay pensions for the superannuants ,see its no great problem taking money off the rich workers
    The elite rich are much harder to rip off they have their money in the Cayman Islands dont they ?

  13. Squirrel

    “But before citizens get their promised comfortable retirement, a conga line of ticket clippers, a coalition, in fact, get their go.”

    Often think of the vast army employed in the super racket when I hear of people who can’t get a decent, affordable tradie – so many wasted working lives.

  14. Nighthawk the Elder

    Professor Fred, “after all money belongs to the government ,they print it don’t they ?

    You have no idea how close you are on this. The number of arguments I’ve had with individuals, usually the young, naive and “socially aware” who truly believe that superannuation belongs to the government. They believe it to be just another tax or levy, so it never really belonged to them in the first place. They are shocked to learn it was actually their money, forcibly taken from them and locked up supposedly for their own good. It’s why the ticket clippers can get away with what they do as the great unwashed don’t know they should be fighting to protect what is theirs.

    And wozzup is correct about pollies wanting to force super to invest in “strategically important investments” like social housing, (one of each way Albo’s favourites). Tried to argue this point with a leftie on a Murdoch news site and he stated the very reason super funds existed was to invest in community projects. I fired back their primary role is to maximise returns to their members and if individual members want to invest in feel good, low return government projects then go ahead and select those investment options yourself. But don’t force it on the rest of us.

  15. NoFixedAddress

    Paul
    #3543051, posted on August 10, 2020 at 7:45 pm

    It’s much easier to steal a billion from one, than a thousand each from a million.
    a million put their thousand in a million places. One puts it all in property or stocks.
    Supply and demand? What? What?

    Nice try Paul.

    What % tax should the billionaire pay?

  16. C.L.

    Brilliant summary by Spartacus.

  17. Imagine how much better off we would all be if that money was in worker’s hands and circulating in the economy. Those who could would be able to take care of themselves much better in their retirement. And those who could not would go on the pension. Would be about the same percent of the population as it has ever been. The scheme has been in existence long enough for objective testing rather than relying on fund milkers or the utterances of Keating.

  18. H B Bear

    Rasputin – this is Australia. It would just bid up property prices and mortgage debt. Would be nice to have a choice though.

  19. Eyrie

    The current Super scam was invented by Keating, spiv and guttersnipe. Enough said.

  20. Rob MW

    Money is forcibly taken from employers first and then from workers on the promise of a comfortable retirement someday in the never-never. But it’s not tax. It’s super, as in superannuation.

    Fixed it. And yes, it is a tax, an employers tax, which is applied over the top of gross weekly earnings at the current rate of 9.5% of gross. It is NOT A DEDUCTABLE amount BEFORE the application of GROSS. Got it ?

  21. min

    We started our own before Keating made it compulsory bur the rules kept changing . In fact I think
    the reason we took over was it was with Legal and General and after the crash in the 80s and we lost a lot we wanted to decide where we invested . Now in a pension fund that I manage with advice from accountant and stockbroker but as I am getting older becoming a problem . I went to Financial advisor about 18 months ago and nearly had a heart attack when he told me how much I would have to pay him .

  22. NoFixedAddress

    H B Bear
    #3543179, posted on August 10, 2020 at 9:14 pm

    Rasputin – this is Australia. It would just bid up property prices and mortgage debt. Would be nice to have a choice though.

    What else with ponzi laws.

  23. Cynic of Ayr

    OK, the alternative to Superannuation is to save your own money, and invest it. There is no other alternative.
    Investing outside your own employment. I don’t mean investing in your own business.
    So, during a working life:
    Investment means putting it in the bank and watch it grow at 1%;
    Invest it in shares yourself, buying and selling, and watch it grow or disappear according to your luck;
    Invest it in so-called “Blue Chip Shares”, leave it there untouched, and watch it grow, or disappear if someone buys the “Blue Chip Company”.
    As I understand it, any profits are taxed at the normal rate. In other words, you do your tax return, and get a bill from the ATO, and if your meager returns push you into the next Tax Bracket, well.. that’s a bummer ain’t it?
    Or, you can seek out a small self employed advisor some where, who is happy enough to earn, say, 200 a year, and have him look after it, fucking about with funds and all that shit that the average bloke has no clue about, and have him rake off 1%, leaving you with maybe 4%, or in a period of a few years a couple of years ago, 8% or 9%.
    Or, you can put your money into an Industry Fund, and finance the Labor Party, some Industry Fund Managers who want ta million a year, and the Union as well.
    Both are taxed at a supposedly lower rate than your normal worker’s rate.
    Now, CofA, being quite hopeless at saving money, let alone managing it (experience has proved this little fact many times), Super under the control of a small family advising company, has proved to be a worthwhile lurch towards a retirement with some thing more than the Old Age Handout.
    I guess it’s what you want to consider to be a well funded retirement.
    CofA is merely a low class citizen, of limited intelligence – possibly a bit more than some, but let’s not get carried away – that consider 100 a year to be more than adequate to live on. Said CofA has no idea what it’s like to live on a mil a year!
    Said CofA is mates with some people who have ten, twenty, thirty times his Super amount, and we all have coffee at the coffee shoppee every few days, and live more or less the same, and go to the same movies etc.
    I’d guess the major diff is that their kids will get a much larger prize at the reading of the will, than my kids will.
    So, my point? If Keating had not forced my employer to toss 9% into the till every month, and I don’t give a rat’s arse how much it cost to do it, because left to my own devices, I’d be on the bone of my arse,
    CofA suspects that the majority of the people here, “complaining” about the theft of their money, have too much money to start with.
    I contend that if I lose a dollar, I shrug. If you blokes lose a million, I larf, and you want to kill yourself!
    Besides, the amount that the Super Companies rip off you, is fucking peanuts to the amount the Government rips off you in a hundred different taxes.
    Remember, you also pay the taxes of every supplier of every item that you ever consume.

  24. Nob

    I don’t give a rat’s arse how much it cost to do it, because left to my own devices, I’d be on the bone of my arse,

    That’s pretty much how my kids look at it.

  25. Struth

    I thought I was reading a comment by MV!

  26. NoFixedAddress

    Cynic of Ayr
    #3543246, posted on August 10, 2020 at 10:21 pm

    Do you know that the concept of retirement benefits and putting aside for your ‘old age’ actually predates the magnificent edifice of Superannuation granted from on high by Australian Public Service Governments and its Politicians ™?

    We used to live in an imperfect world where there was some choice.

    And Nob you just affirmed for me why I consider Australian Public Service Government Education ™ a waste of time, money and resources.

  27. John Bayley

    Besides, the amount that the Super Companies rip off you, is fucking peanuts to the amount the Government rips off you in a hundred different taxes.

    ^That.

    A lot of bellyaching above concerning superannuation, for sure. And hey, much of it is totally justified.

    Superannuation is well overdue for a reform. It is overly complex & convoluted. It is not good value for many. It is also a legal minefield for the likes of accountants, for example.

    It should not be compulsory for any age group, but if it is so, then at least the young & low income earners should most definitely be exempt.

    BTW, the ATO has already said it will be going after those who have accessed the $10K, if they can’t prove the actual need (loss of employment etc). The fine can be as much as $12K/pop.
    It will be interesting to see whether they will really manage to do that, given that there are many more important fish to fry – like JobKeeper fraud, for example, which is an actual handout, rather than accessing your own money.

    Yet in all of this, most of the contributors here, including TAFKAS, miss the forest for the trees. Namely, that the governments so regulates our every activity, that super is but a small part of the overall scam.

    Superannuation is, in itself, no more than a special type of trust, subject to specific rules and, typically, concessional taxation. If used properly – admittedly something few do – it can be very useful.

    There are specific tax rules applicable also to private companies and trusts. All of these, including our individual tax rates, can be increased at the whim of the government. Remember Shorten’s plan to confiscate franking credits and tax trusts as companies, with no tax-free threshold? Halving the rate of CGT discount?

    What is stopping the government from introducing a wealth tax, or death duties of some sort? Just look at how easy it was to lock everyone down and destroy countless businesses. Surely it’s a good thing to ‘make the rich pay more’?

    Also, have a think about just how much the government steals from you through inflating the cr*p out of the South Pacific peso. And suppressing interest rates to zero, to boot?

    I was ‘amused’ to see just yesterday that a bank account of one of my companies, with $40K in it, earned $1.31 in interest for July – before 30% tax, too! In reality, after tax and inflation the account lost value; but hey, that’s fine, because the Great Economist Thinkers at the RBA say it ‘stimulates’ the economy!

    Negative rates coming next, too.

    If you want to complain – and there are many valid reasons to do so – then broaden your horizon please.

  28. flyingduk

    Of course they are coming for your super, why wouldn’t they, they have come for everything else. They are coming for your money, all of it, ‘by any means necessary’. They tax the dollars as you earn them (income tax), then they tax them again as you spend them (gst etc), and if you manage to make anything from your investments, they tax those gains too. All the while, the purchasing power of your dollars is being eroded at escalating speed by inflation (which is another, hidden, tax): 95% of the dollars value is gone due to inflation already in my 50 year lifetime. Any wealth you ‘hide’ from inflation outside the fiat currency system is compensatorily skimmed when you re-enter it (via capital gains taxes) and if you never re-enter it, its skimmed along the way via other taxes (rates etc). We were flat broke already, before COVID, the financial end game is coming, buy guns gold n bitcoin if you want a lifeboat.

  29. flyingduk

    So, my point? If Keating had not forced my employer to toss 9% into the till every month, and I don’t give a rat’s arse how much it cost to do it, because left to my own devices, I’d be on the bone of my arse,

    And why is this my problem?

  30. John Bayley

    95% of the dollars value is gone due to inflation already in my 50 year lifetime.

    Probably even more – the AUD has lost close to 90% of its value against gold since the late 90s.
    And the stock market is still about 75% down from the pre-GFC peak in 2007, if measured against gold.

    Source.

  31. Roger W

    The only practical alternative is an SMSF.
    Have the confidence to make your own decisions and the only costs are an accountant to do the annual tax return and an auditor. Total cost around $3000 each year.
    You invest where you want and pay yourself what pension (above the mandated minimum) you choose when you choose.
    Unless current tax concessions are changed/removed, hard to see how the government can easily control your SMSF. Certainly easier for them to access large commercial funds than thousands of small independent ones, though not sure what can protect against an Argentina/Venezuela situation.

  32. Cynic of Ayr

    NoFixedAddress.
    I believe my comment “CofA suspects that the majority of the people here, “complaining” about the theft of their money, have too much money to start with.” may well apply to you.

    flyingduk
    Ditto. However, I never said it was your problem. It certainly isn’t your problem to fix, and you’re certainly not qualified to fix it.

    John Bayley
    If you want to complain – and there are many valid reasons to do so – then broaden your horizon please.
    Quite!

  33. Archivist

    Yet in all of this, most of the contributors here, including TAFKAS, miss the forest for the trees. Namely, that the governments so regulates our every activity, that super is but a small part of the overall scam.

    Superannuation is, in itself, no more than a special type of trust, subject to specific rules and, typically, concessional taxation. If used properly – admittedly something few do – it can be very useful.

    wrong. It’s clear now that the super scheme is flawed, and is a ticking bomb. It’s a big deal. You can’t make us look away by pointing side and shouting, “Look over there! A bigger problem!” Nobody’s fooled by that.

  34. Diogenes

    They believe it to be just another tax or levy, so it never really belonged to them in the first place. They are shocked to learn it was actually their money, forcibly taken from them and locked up supposedly for their own good.

    Yeah, but nah.
    According to the High Court it IS A TAX (Roy Morgan took the ATO to court in 2010, and lost) it is an accounting fiddle that makes it so (employer sends money to Superfund and reports same to ATO, ATO then commits fraud by doing the necessary bookkeeping entries to “accept” money into consolidated revenue and then spend it immediately eventhough physically the money goes nowhere near consolidated revenue).

    Given I cannot do anything with “my” money except according to super law, as the funds are held in “trust” is it really mine ?

  35. Archivist

    Given I cannot do anything with “my” money except according to super law, as the funds are held in “trust” is it really mine ?

    No.

  36. John Bayley

    Given I cannot do anything with “my” money except according to super law, as the funds are held in “trust” is it really mine ?

    But what can you do with, say, ‘your’ money held in a company you control?
    You can take it out, sure, but it will then likely be a dividend taxable in your hands. And this can mean handing over tens of thousands of dollars in extra tax.

    Can you live in a house your company owns? – Yes, but you will likely have to pay rent, and at market rates, or the ATO will have something to say about that.

    You can take your super out, too – but you need to first satisfy a condition of release.

    Can you see the similarities here?

    No matter what, you always have to abide by the applicable law. Which means that the company money is not really ‘yours’ in the same way your personal bank account is.

    Same with various types of trusts; they are all governed by specific rules also.
    ‘Related entities’, no matter which ones, are not the same as personal assets, and even there (personal stuff) you can’t do anything without the government taking a cut or several.
    Sin taxes?
    Petrol taxes?
    Stamp duties?
    Payroll taxes?

    Why else would the various Tax Acts be thousands of pages long?
    Why else would there be so many tax lawyers and accountants?

    You can’t make us look away by pointing side and shouting, “Look over there! A bigger problem!” Nobody’s fooled by that.

    I don’t believe I did that. Maybe you need to re-read my earlier post?

    I just pointed out that you can have a valid complaint about pretty much anything, because your choices are always restricted by what the government allows you to do and taxed as they, not you, choose.

    Which rules they can change whenever they feel like it.
    Negative gearing? — Sorry, we’ll abolish that (Shorten & Bowen). Shame about your long term budgets and planning, hey.

    My point is – and I would have thought it was quite obvious – that the entire system is flawed.
    Too much government, not enough freedom.
    In anything.

  37. John A

    Rob MW #3543210, posted on August 10, 2020, at 9:32 pm

    And yes, it is a tax, an employers tax, which is applied over the top of gross weekly earnings at the current rate of 9.5% of gross. It is NOT A DEDUCTIBLE amount BEFORE the application of GROSS. Got it?

    No, Rob, you don’t get it.

    It is a legitimate expense, at the same level as gross pay, and an eligible deduction for the employer in their business tax return. Before that fink, Keating made it compulsory so as to deny workers a promised tax cut, superannuation schemes had both employer and employee contributions. Each was an eligible deduction to the contributor.

    Keatings pea-and-thimble trick was for all contributions to be made by the employer, so that super looked like “free money” to the employee, but only at retirement. Gee, thanks, Mr World’s Greatest Treasurer #1.

    Peter Costello made a virtue of a necessity by putting forward the proposition that the super industry was a good way for the government to save on future pension demands. Thus his effort was to make super more attractive and to generate sufficient returns so that employees upon retirement would not want to bother double-dipping.

    Naturally, the money-grabbers aim to overturn that admirable goal: greed being one of the seven deadly sins.

    But throughout all the changes, contributions remain a legitimate (although compulsory) expense of employing people and an eligible tax deduction to the employer.

  38. Terry

    ‘the entire system is flawed’

    Yes!…AND…the superannuation system (not superannuation itself) is an ineffective, overly complex (deliberately so) rort, marred by compulsion, inefficiency, and vested interests.

  39. Diogenes

    But what can you do with, say, ‘your’ money held in a company you control?
    You can take it out, sure, but it will then likely be a dividend taxable in your hands. And this can mean handing over tens of thousands of dollars in extra tax.
    Can you live in a house your company owns? – Yes, but you will likely have to pay rent, and at market rates, or the ATO will have something to say about that.
    You can take your super out, too – but you need to first satisfy a condition of release.
    Can you see the similarities here?

    No because in the case of the first 2 I make a conscious decision to put myself in that situation.

    I have NO CHOICE when it comes to super

    No matter what, you always have to abide by the applicable law. Which means that the company money is not really ‘yours’ in the same way your personal bank account is.

    But the government and super funds keep telling me it is ‘mine’.

    My point is – and I would have thought it was quite obvious – that the entire system is flawed.
    Too much government, not enough freedom.
    In anything.

    My reply was to Nighhawk to correct his misapprehension that super is NOT a tax – the High Court has clearly stated it is, and therefore taking 9% of my salary is constitutionally kosher, which also covers your points about sin taxes etc. However, once it hits ‘my’ super account, which constitutional provision forms the underpinning of those laws which restrict what I am allowed to do with it?
    Agreed though there is too much very bad and overcomplex law

  40. Archivist

    My point is – and I would have thought it was quite obvious – that the entire system is flawed.

    Sure, and that led to your main point, which was this:

    If you want to complain – and there are many valid reasons to do so – then broaden your horizon please.

    In other words, quick complaining, because there are better things to complain about.

    Admittedly, you did attempt to mount a case against Spartacus’ alarmism and against the critics on this thread, by describing super in harmless terms as “no more than a special type of trust, subject to specific rules”. But that sounds like you’re trying to define the problem away.

    There are big problems with super, and I’m not convinced you understand them.

  41. Archivist

    It is a legitimate expense, at the same level as gross pay, and an eligible deduction for the employer in their business tax return.

    Wow.

    By the same logic, an increase in worker salary is “an eligible deduction for the employer.”
    An increase in rent is “an eligible deduction for the employer.”
    Do you see the flaw in your logic here?

    But the fundamental problem with super is contained in your very first statement. “It is a legitimate business expense.”
    If someone puts their own money in their own bank account, that’s not an expense. For anyone. Not for them, not for their boss, not for their next door neighbour. If it is an expense (which you admit it is) then something else is going on.

  42. John Bayley

    There are big problems with super, and I’m not convinced you understand them.

    Oh, I understand them well enough; I would think better than most, considering that dealing with super and other tax entities used to form a sizeable part of my job description.

    But I think we’re talking over each other’s head here.

    My point is that we have no real freedoms left in what we do, so to complain about superannuation alone is just silly.

    Check out just what one needs to comply with to employ people. Are there no ‘big problems’ in that area?

    Some here clearly think that having compulsory super is worse than being ordered just how much to pay your employees and how many hours they must work for, without regard for what you or they may prefer.

    Or worse than having your earnings taxed at multiple points in time and then taxed again later, via inflation or other taxes, with arbitrary adjustments possible at any time, depending on how the politicians feel today.

    Yes, you may not be ‘forced’ to set up a company or a discretionary trust if you’re running a moderately successful business, but few choose not to do so; if not for tax reasons then for asset protection.

    You don’t have to have a family trust, but if you want to split income with your non-working spouse, will you not set one up?

    Let’s face it, none of those ‘choices’ are truly voluntary.

  43. Neil

    And Public Servants get more than most because they have access to taxpayers funds. Costello got rid of the Defined Benefit Scheme for PS’s but they still get 15.4% Super. University workers get 17%

Comments are closed.