Why fiddle with my Super by Steve Marsten

Well I guess it’s budget week and we should throw our two bobs worth in! Overall I think it's a fairly benign budget - all things considered. There was nothing really to grab the reigns of the Nation and reset it to gallop into a bright future anytime soon. Of course there are some interesting elements - they have clearly continued to fiddle yet again, with our much loved super system.

Those nearing retirement have screamed out loudly - Why now? Why us? Why me - Malcolm? 

Frankly it's been a great ride for super from the heady days of Labor bringing in the super guarantee system - one of the greatest policy decisions the country has seen and then this was followed by the retirees friend - John Howard, who sought to allow those that could, while times were good, to stash a good deal of their money into their super for their retirement day.

Self Managed Super Funds (SMSFs) went through the roof and Australians embraced the idea of saving for retirement with a generous and supportive tax system. Baby boomers have much to be thankful for.

So why change now I hear near retirees ask? There are numerous technical reasons however the overriding crux of the matter is this. Forgive me if my data is a little dated but the situation has not changed. In 2009/10 there were about 208,000 SMSFs that had an average taxable income of about $70,500 paying about $10,500 tax each. In 2014 this number has grown to 466,000 funds with an average of $29,000 in taxable income paying just $4,300 per fund. The tax revenue for the government has been falling rapidly and that's not what governments like to see. Regardless of the colour of the Government, if not this one, then the next, they would most certainly have stepped in to temper the revenue loss.

I am all for a government, any government, living within their means, as in my lifetime I have not seen too many. This measure was a correction to fix a revenue leak, however Australia's biggest problem is a spending issue. We simply are living beyond our means and using our children's inheritance to pay for it. This is not just Governments but most households. This policy fiddle will not suit those over 50 however it was always going to be amended. Give one of our experienced accountants a call on 4972 1300, so you can learn how the rest of the budget affects you.