GILLARD RESURRECTING DEATH DUTIES

Another Federal Government devastating attack on hard working Australian retirees and their families – this  time from both Labor and the Greens. And it is so sneaky …..  go after a persons Super when they die  … and you can effectively have a massive new death duty TAX.. but in disguise! They will not use that term… “Death Duty” Of course!….But it is a Distinction without a Difference!

Many years ago, back around 1985, the Labor Party abolished death duties as this was essentially obscene.  Sort of …robbing from dead people.

In its place was Capital Gains Tax which of course came into place on 20th September 1985.

Well DEATH DUTIES folks is making a comeback it seems as the Labor government under madam Julia and The Greens now seek to bring this back. But in a very sneaky and typically underhanded way, they will not be directly hitting us when we die.  No.

They will be attacking our second largest asset – our superannuation fund!

Under Income Tax Ruling TR 2011/03 when a person dies having a superannuation account, the Australian Tax Office will seek to assess the underlying assets of a superannuation fund for Capital Gains Tax on top of any lump sum tax that will be payable at least at 15% plus medicare.

This effectively implies that your superannuation fund death benefit could by the time this goes to your family be short of up to as much as 40% of your account balance.

So I went to the source, Labors own website to remind myself of those words….Labor Values and I read and of course reflected on their own words.

This government according to Madam Julia “ I’m the best person for this job” Gillard states on Labors Website that:

“ Australia’s superannuation system is unique and provided an important source of finance for Australian businesses during the global financial crisis. But we need to ensure our superannuation savings are enough to provide a secure and dignified retirement to working Australians in the future.”

So I ask simply – why thieve money we have saved for our retirement and ultimately our family with this death tax ? – How simply disgusting and cruel is this thought bubble.

Surely we should be allowed to leave our hard earned asset, for most of us this is our second largest asset to our family.

While perusing the slogans of Labor via their own website on the topic of retirement, it says:

The Government will increase the superannuation guarantee to 12 per cent. This is expected to benefit around 8.4 million employees. The Government will also extend the superannuation guarantee to cover older workers up to age 75.”

The fact is that a 33% rise in superannuation payments does not come magically from the government.  It comes from the small business owners who are struggling to survive.  If costs increase to business, jobs will be lost.

Also the reason why the government has extended coverage to older Aussies is simply because many are struggling to make ends meet and are back in the workforce at such a late stage in life because the bills are getting larger than the age pension affords them and as a veiled admission of this governments incompetence in pursuit of a Carbon Tax, they also realize that many older folk will be hit hard by such an abhorrent tax which is the largest of its type on Planet Earth.

Other slogans on this same page says:

“The government will also improve the fairness of the superannuation through a new concession worth up to $500 for 3.5 million low income earners who currently get no superannuation concession for their compulsory savings.”

A couple of points on this one:

The first is the statistic of 3.5 million low income workers.

A quick look at the Australian Bureau of Statistics website and you will know that we have 11.44 Million workers.

So if 3.5 Million are on low incomes with no superannuation support, then that implies a little over 30% of the working population is on a low income.

Which begs the question… that is , – you then put a carbon tax into the mix you will not only make the lives of this 3.5 Million low paid workers hell …..but you will also destroy further jobs as companies will move offshore or employ technology to make a profit at the expense of more workers as their costs rise.

 

Further on the website:

“The government recognizes that many older Australians wish to make catch-up contributions to superannuation and will double the contributions cap to $50,000 from 2012-13 for people aged over 50 with balances under $500,000.  “

Now this is not just irresponsible but plain dumb and again has nothing to with anything but short term theft.

Under the Howard Costello reforms, if you were over 50, you could make contributions under a salary sacrifice regime with your employer for up to $50,000 per annum.   Regardless of your account balance.

Now, the simple bleeding obvious would state that if you put more away for your retirement, you may not need a pension thereby saving the taxpayer money plus you have a better retirement.

So, instead of you paying tax at marginal rates up to 45% you would only pay 15%. Nice.

So you save tax, you help yourself in retirement and the government does not have to hit taxpayers to fund a pension. Win win in other words.

Under Labors thought bubble, you are limited to what you can put into super as if you step over their stupid limit of $500,000 you will be penalised.  By the way the cap value is $25,000 for those aged over 50 with balances OVER $500,000.  That’s right $25,000!!! …..this will be devastating….  Ask you advisor.

So under this thought bubble with no vision, you would pay more in taxes depending on where you sat in the equation, your retirment would be underfunded, you would be more dependent on the age pension and you would be compelled to work due to rising costs perhaps until 75.

Excuse me for saying this – but ...Does this seem dumb to you ? … Me to!

By the way, the $50,000 limit is NOT NEW.  Its been there for a long time.  It was created by the Howard Government.

And finally… the website says more spin and BS ….

“These changes are expected to increase Australia’s pool of superannuation savings by $85 billion over the next ten years and are projected to increase the retirement benefit of an average worker aged 30 by $108,000.”

So, assuming this “average worker” aged 30 retired at say, 65 my question would be:

Under rising inflation, how much would $108,000 buy him if say inflation ran at say 3% per annum???

Not a hell of a lot….a used car perhaps….

After all consider a postage stamp once cost 7 cents in 1971 is now 60 cents !

But, our current savings in superannuation is well over $1 Trillion dollars

So, if superanuation savings were to rise by $85 Billion over 10 years   

and you applied death duties to this amount of money….

I think you can see the picture……

Labor and the Greens want to get your money!

Bottom line is this.  This is your money.  Its what you and I save for a prosperous retirement and for the benefit of ourselves and our family.

I’m willing to pay my fair share of taxes but…  like you I’m sick and fed up of these mindless thought bubbles coupled with no vision from a bunch of incompetant fools hurting myself as an individual, as a business owner and now my family as well.

Tell this government to leave our retirement savings alone.

 

Regards

The numbers guy