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mega-million-dollar SMSFs a holy grail for the wealthy

Your Say lets readers tell Crikey what they think about the stories we’ve published. Today you you react strongly to Cam Wilson’s article on how self-managed super funds are exploited by the mega-rich — and you haven’t let Lachlan Murdoch off the hook either.

Jon Cocks writes: As a retiree/age pensioner with a small SMSF that sits there for rainy days and the occasional extra, it boils my blood to know that the top 1% wealthiest Australians sit on so much wealth, while multitudes of those much worse off than I miss meals to pay rent and shiver through winter with no heating. While the ALP remains Liberal lite, the scenario is not likely to alter much. Wealth ownership is a holy grail actively supported by the previous government, whose leader — name not to be spoken aloud — equates directly to godliness. Albanese needs to grow a pair and lead Labor back towards the left. The rich enjoying tax perks flies in the face of everything a progressive Australia should be striving for: real equality in the workplace, between genders, for all demographics and races and — as a First World nation — eliminating poverty.

Andrew Ayers writes: The rise of SMSFs came directly from two failures of governance on the part of governments. First, pension rates have been almost completely ignored, and equity for a lifetime of taxpayers’ PAYE reverting to receiving the pittance they do is a direct result of government neglect. Second, the supposed solution to the fear of retiring into pension poverty and the government being unable to fund it was to encourage the rise of superannuation. Unfortunately, due to ever-so-slow changes in government regulation, this too is now considered a hotbed of high fees, risk of loss of superannuation savings and gross government neglect (as always).

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SMSFs rose to counter this government indolence and managed to finally find a way to safely protect a lifetime of toil from being wasted away by the lack of attention from indolent politicians. Accordingly a massive overuse of SMSFs has resulted and thus your top 100 appears. If we ever get a Parliament (whose members seem to make their prime KPI to do less work than your average dole recipient) get something useful done, maybe we will come up with a less risky system that rewards people for their efforts. Until then SMSFs are a justified reaction and the campaign to tax them or otherwise limit them is short-sighted and reeks of wealth envy.

Penny Hackett writes: Once intended to relieve the burden on the aged pension, superannuation has become a vehicle for intergenerational wealth transfer. The cost of the concessions now exceeds the cost of the pension — and the taxpayer foots the bill for both. Grant concessions to a level which allows a comfortable retirement and apply income tax to the rest. To do otherwise just creates greater inequality, the last thing we need.

Doug Wancia writes: I was shocked to learn that people are allowed to have that much in super. It costs this country in lost revenue and negates the original reason for creating the superannuation scheme — to reduce the burden on the government to pay out pensions. Frankly, I think super tax incentives should cut out at $800k. That’s the point in the assets test where the pensions cut out. That means that person can supplement extra savings outside of the super system without tax concessions.

David Nixon writes: The Grattan Institute’s economy policy program director Brendan Coates says one solution was to tax superannuation earnings like income tax. This would be my preference. Currently accumulation balances and excess balances over the transfer balance cap are taxed a flat 15%. Why can’t this be a progressive scale, a flat 15% up to a reasonably high balance (to be discussed by the stakeholders, government and the ATO, maybe $2 million?) for each member and 30% beyond that which will correspond to the top marginal rate of personal taxation. That would limit the total quantum of concessions. A change such as this could be easily implemented with a minimum of legislation and regulations changes. I have run a four-member family SMSF for 10 years. The current transfer balance caps allow a very comfortable lifestyle in retirement. Extreme excess balances beyond these are just tax and inheritance strategies.

Roger Clarke writes: You don’t need to be either a top actuary or a demographer to appreciate that the SMSF concessions policy is utterly unsustainable. Well-off people (including me) need to be suitably taxed. We need to rid ourselves of this Costello-era hangover. A cap would need to reflect the number of beneficiaries in the fund, so maybe $1.5 million for one person, and $500,000 per person thereafter. Better still, also charge, say, 10% tax on income above, say $1 million asset holdings by each person, as *well* as putting a cap on the 15% largesse. (That’s $5000 in tax, assuming 5% earnings on $1 million, and $11,250 in tax assuming 7.5% earnings on $1.5 million). Or establish a sliding scale on income per person. But walk the 30% and 48% brackets up from 20% at, say, five percentage points a year to provide people with time to consider their options and reorganise their affairs. Even socialists don’t have to be bloody-minded about it!

Ian and Sue Niven write: There are approximately 600,000 SMSFs so the 32 funds mentioned make up 0.005% of all SMSFs. Any changes to super should not be made on that basis. Obviously these 32 funds have very wealthy members who were there when Paul Keating created the superannuation system. For a while there were no restrictions on how much you could put into super so the wealthy took advantage. Today and, say, over the past 10 to 20 years you cannot generate this sort of wealth in an SMSF. Currently there are caps on SMSFs so I say leave it alone. 

Douglas Glamaan writes: I know a family who had their business as an asset in their super. There was a change to the super laws and they paid virtually no tax. The parents (the super fund owners) support their children and grandchildren all tax free. 

James Salmon writes: If the superannuation rules are left as they currently are, super collection no limit, pension $1.7 million, the ATO has the machinery in place to monitor both aspects from collection to death. GST is the greater area for tax collection.

Jeff Loewenstein writes: Aside from commending Crikey for its stance in taking on the Murdoch/press freedom fight, every Australian subjected to Murdoch’s 67% control of Oz media should pitch in, financially, to support Crikey. What many may not realise (I’m speaking as a retired barrister) is that Lachlan Murdoch will have to support his case (not the other way around — that is, that Crikey has to justify its case) by going into the witness box first and be subjected to cross-examination. Just reflect on the multitude, variety and compelling matters which can be put to him.

Ray Marsh writes: Wearing the face of hypocrisy the Murdoch empire screams foul at a little Aussie battler seeking to use weak Australian defamation laws and endeavouring to silence its critics. The Murdochs should know that Aussies cannot abide bullies. Right-wing media organisations do everything they can to shout down or talk over any one who disagrees in their rabid chase of profits. I call on my fellow Australians to join in and support Crikey and bring down the bullies.

Julia Tregaskis writes: You are absolutely doing the right thing! Don’t falter; don’t second-guess; don’t doubt for a second that what you are doing is the right thing. Margaret Mead said: “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.” Apart from being journalists you are also citizens of this great country. Now it is your time to make a rock-solid stand, not just for Crikey, but for all of us. I salute you all for your courage so far. You won’t fail, the truth is on your side. Wishing you strength, courage, clarity and justice. Go get them!

David Childs writes: As a long-time subscriber I enjoy Crikey’s take on politics and society but am a little troubled by the ongoing Murdoch saga. Isn’t there a fundamental rule of journalism about reporting the story, not being the story? The “bring it on” approach to Murdoch Secundus is tending to the latter rather than the former.

Neville Ludbey writes: Thank you, Eddie Synot, for concisely and categorically condensing the arguments for the positive role of the Voice. I was confused, being a Greens voter and supporter, about their negativity on this. Now I know I will vote for it, and will have to weigh my support for them.

Mark Hills writes: As a non-Aboriginal person ready to celebrate and engage with First Nations peoples, I find Synot’s writing both compelling and reassuring. The idea that Australians can move ahead to a new place without rancour or starry-eyed idealism is heartening. Walking together means just that: taking a new road paved with mutual respect and readiness to listen to one another.

Vivienne Skinner writes: Please God, don’t let the Greens stuff this one up. Just as happened with the vote against an effective climate pollution mechanism back in the Rudd years, this will be held against them for evermore as yet another own goal. Given the extraordinary effort by First Nations peoples from all over the country to create the basis for the Voice — a terribly difficult feat to achieve such consensus — for the Greens now to scorn those efforts is simply insulting.

Mark Phillips writes: If the Greens oppose the referendum then that will cause me to cease placing them as my first preference on the ballot paper, something I have done for more than 15 years.The Voice was a decision of First Nations. The Greens have no right to oppose their wishes. 

Deborah Durnan writes: The Greens are absolutely wrong to oppose the referendum. They have no right or mandate to derail this process. The referendum is but another step along the road to Indigenous Australians being recognised as the First Nations peoples of this ancient land. Such constitutional enshrinement of a permanent Voice will open the gate to meaningful and authoritative dialogue with the Parliament and Australians on a range of critical issues thus far absent. Why the Greens should want to stand outside this progressive movement for justice and equality is perplexing.

Dave Irving writes: I’m a Greens member, and the apparent opposition to the Voice is enough to make me think seriously about leaving the party.

Edward Zakrzewski writes: The referendum was one of three key platforms which put Labor in government. It has a mandate. The Greens would lose my support, both financial and at the ballot box, if they denied Labor this win. I also think that until Indigenous Australians are in the constitution it will be business as usual for decades to come — no treaty, no nothing.

Dr Tim Senior writes: I was pleased to read that Ian Hickie’s family had a great experience visiting the specialist clinics run by GPs, but that anecdote isn’t the outcomes data he says he wants. In fact there’s no one with any expertise in health policy suggesting that a move away from community-based generalist care — general practice in Australia — is a sensible direction for the health system to take. Hickie pretends that GPs don’t want health system reform, but GPs are the ones who stay with their patients when they can’t afford the higher out-of-pocket costs for psychologists and psychiatrists, the long waiting times in the public mental health system and the apps and websites that require levels of literacy and technical ability that are beyond them. Underfunded and under-supported, GPs would love reforms that benefit our patients. Hickie’s suggestions are not these reforms. They would lead to worse inequity, less access to the human interactions essential for mental illness care and mental health protection.

If something in Crikey has pleased, annoyed or inspired you, let us know by writing to Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.

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Peter Fray

Peter Fray


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