The latest budget has shaken the country's Superannuation industry - or so we are being told on a daily basis. And there are, no doubt, a few significant improvements and simplifications to the one of the two most vital weapons to decent, comfortable requirement (the other one being your health of course).
Here’s a disclaimer: I work in the industry in a Technology capacity, I am not qualified to give advice – and I won’t.
But I am licenced to observe and whinge. A slow-cooking recipe, on the stove since 2001 and after a few stirs in 2003 and 2004, is on the brink of being served later this year – after the Government and Superannuation Iron Chefs gave their nod of approval: members of accumulation funds will be able to split their personal and employer contributions with their spouse. Sexy stuff, I hear you say… Yes, Superannuation is a fascinating subject, OK?
I won’t go into the technicalities of Splitting and an analysis of the issues around sexy three-letter-acronyms such as RBL – because I don’t want to be sued of causing fatal boredom. But here’s the whinge: I have spent a couple of weeks of my life developing technology solutions for the enablement and support of Contributions Splitting. Not just me – Business Analysts, BDMs, Member Communications and Project people in all similar Super providers around the country have been spending weeks analysing requirements and composing letters and communications to investors.
And all of a sudden, it’s all academic! Our future Prime Minister (chill...) has just gone and voided years of effort. And here’s me thinking: do these people actually talk to each other? Do the consultants actually consult? Do the researchers perform any research? Do the wizards cover all bases?
But the one thing that to me stands out the most in this reform is this: Over the age of 60 your allocated pension becomes tax-free income. Which poses the question: knowing that this is a gamblers’ nation, should the government be encouraging people to lift their life-long saving and disposing of it as they may think best? Did Tabcorp have a play in this strategy?!
And really, what’s the big deal anyway? Another government comes along (say in 5 years!...) and work out that there’s a lot of money sitting locked in superannuation accounts, because of the latest incentive. What do I think they’ll do? They’ll probably tax it.
I don’t know – and it’s not advice – but the Italian way of saving might have its merits after all…
1 comment:
I think it's all a very clever plan on behalf of our government: If they lose the elections because they can't run the economy, the winner would have to incease taxes - thus guarenteeing the Libs get back in power quickly.
They do the same thing now already, reminding people how bad interest rates were under Labor 20+ years ago, as if it's a true indicator of current affairs.
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