Latest news with #superannuation
Daily Mail
7 hours ago
- Business
- Daily Mail
He's one of Australia's leading minds on super - and he's got a sensible idea about changing Albo's laws. But do YOU think Jim Chalmers will budge on his flawed tax grab?
Treasurer Jim Chalmers has declared Labor has a 'mandate' for a sweeping plan to tax superannuation before assets are sold - despite a warning it could amount to a new form of death duties. Labor needs the Greens' support in the Senate to pass its Better Targeted Superannuation Concessions bill that would see a new 15 per cent tax levied on unrealised gains on balances above $3million. The Opposition and superannuation groups are opposed to the idea of taxing assets in a self-managed super fund before they are sold, based on the paper or notional value of holdings. Labor's policy would mark a radical departure from the usual practice of applying the capital gains tax once something has been sold. Now a leading superannuation expert - Professor Robert Breunig, the director of the Australian National University's Tax and Transfer Policy Institute - has argued the government should consider a change to its proposal. Prof Breunig said the government should look into allowing the unrealised gains tax to be paid years later, when someone eventually sells an asset. He likened it to the standard practice of paying undue council rates after a house had been sold. 'If you're going to tax unrealised gains, I think you should be giving people the opportunity to defer paying the tax until they dispose of the property,' he said. 'That would be my preferred policy.' But Chalmers on Wednesday rebuffed a suggestion Labor would revisit the concept of taxing unrealised gains, even though someone inheriting a self-managed super fund could be left with a new tax liability. 'First of all, we're not changing the policies we took to the election,' he told the National Press Club. 'We've got a mandate for that change... What we're looking for here is an opportunity to build on the progress that we've made, including in the economy as you point out. 'We're looking for, not opportunities to go back on the things that we have got a mandate for, we're looking for new ideas.' 'Inheritance' tax accusations Labor's tax on super balances above $3million could effectively amount to an inheritance tax, along with a new tax on franking credits - or tax refunds for owning shares in a company that has already paid company tax. Senator James Paterson, the Opposition's finance spokesman, said the government needed to explain if taxing unrealised gains on super amounted to an inheritance tax by stealth. 'Labor's super tax grab has been on the public record for two years,' he told Daily Mail Australia. 'The Albanese Government should be able to fully explain the implications of their policy, including for people's wills. 'We should not be reliant on independent experts, the media or the Opposition to explain how this policy will work in practice. 'Jim Chalmers must be upfront about how his unrealised capital gains tax interacts with franking credits and inheritance.' A self-managed super fund can be passed on to a dependent or left to someone in a will. Professor Breunig said someone inheriting a self-managed super fund with more than $3million, upon the death of a parent, would effectively be paying a new form of inheritance tax with the 15 per cent tax on unrealised gains. 'Yes, sure it is, but that's true of a lot of our taxes - that's true with council rates,' he told Daily Mail Australia. 'It would be an inheritance tax if you were somehow paying back taxes on it - you inherit the liability.' A self-managed super fund, with a balance above $3million, would be subject to an unrealised gains tax if there was a property in the portfolio, under the government's Division 296 plan. That would be a departure from existing rules allowing someone to avoid paying the capital gains tax on a property they inherited, outside of a super fund. Prof Breunig said Treasury would benefit from being able to tax unrealised gains in a super portfolio, catching out those who left property in a self-managed super fund. 'Currently, we have a subsidy in the system that subsidies people passing out wealth to their children and you're kind of removing that subsidy,' he said. 'That is one of the attractions of the unrealised gains tax.' Future of the tax The Greens want the $3million threshold lowered to $2million but indexed for inflation. Prof Breunig said that would mean applying an unrealised gains tax to accounts typically producing an annual annuity, or guaranteed retirement living income, of $100,000. 'Two million's too low - how much money do people need to have a comfortable retirement?' he said. 'Now you're talking about a lifetime income stream that's more like $100,000, which for a lot of people isn't that much relative to how much they made in their lifetime.' Australian abolished inheritance taxes at a national level in 1979, with all the states getting rid of that tax by 1981. Labor's planned tax doesn't effectively levy a new charge on a superannuation fund balance being transferred to a loved one.
News.com.au
9 hours ago
- Business
- News.com.au
‘Good news': Australians tipped to be $125k better off in retirement
The average young Australian is tipped to be $125,000 better off in their retirement simply by staying in the workforce, a major superannuation fund reveals. Australian Retirement Trust says the rise in the superannuation guarantee over the last five years is 'good news' for Australian workers who will have more in their retirement nest egg. Under changes to the superannuation guarantee proposed by the Rudd government and enacted by the Morrison government, every working Aussies superannuation rate automatically went from 9.5 to 12.00 per cent. The changes were brought in incrementally, up 0.5 per cent a year, with the final change starting from July 1 2025. According to the Australian Retirement Trust this five year plan will now see a 30-year old earning $100,000 retire with an additional $125,000 when they finish up their careers. Australian retirement trust executive general manager for advocacy and impact, Anne Fuchs, said the boost to the SG rate is good news for all working Australians. 'This half per cent step may seem small, but for working Australians, it's like reaching the summit of your own financial Everest,' Mrs Fuchs said. 'Since the Superannuation Guarantee was introduced in 1992, it has become the cornerstone of Australia's retirement system – evolving from a modest 3 per cent contribution to a robust framework that provides you with meaningful savings for your future.' Separate research from the Association of Superannuation Funds said the increase from to 12 per cent will mean the median 30-year old worker making $75,000 a year will add about $20,000 to their superannuation balance by the time they retire. This $20,000 increase will mean the median 30-year old will retire with $610,000 in superannuation, above the $53,383 a year or $595,000 they would need for a comfortable retirement. Couples should fare even better. ASFA says a couple requires $73,875 a year or $690,000 combined in total to live comfortably in retirement using their super plus age pension top-ups. The major caveat to these figures for singles and couples is owning your own home by retirement. Check your superannuation rate While the rate of change might seem small, Australian Retirement Trust urges Aussies to check their superannuation rate. According to survey data by the super fund four out of every five Australians don't know how much they've put away for retirement, while only one in five can correctly identify the current superannuation guarantee. 'Whether you're just starting your career or nearing retirement, understanding these changes can help you make smarter financial decisions,' Ms Fuchs said. 'As we look towards our own retirement savings, we should also look towards ensuring the Superannuation Guarantee is fit-for-purpose as our nation ages and grows.
Yahoo
15 hours ago
- Business
- Yahoo
$3,000 superannuation boost coming for Aussies from July 1: 'Huge difference'
Superannuation will soon be paid on the government's parental leave payments. The change means Aussies could receive nearly $3,000 extra into their retirement fund, which could make a 'huge difference' over time. Parents with babies born or adopted after July 1 will receive the additional superannuation payment when they receive paid parental leave. This will be 12 per cent of their payment, in line with the super guarantee rate increase. UniSuper senior private client adviser Melinda Brown told Yahoo Finance the changes also coincided with paid parental leave increasing from 22 to 24 weeks. It will increase again on July 1, 2026, up to 26 weeks. RELATED Devastating superannuation tax reality hitting 50,000 Australians in growing trend Centrelink age pension changes coming into effect from July 1 $1,000 ATO school fees tax deduction that Aussies don't realise they can claim 'At the minimum wage and with the super contribution of 12 per cent, that's nearly $3,000 that's going to be put into their superannuation,' she said. 'Compounding over a number of years, it is going to make a huge difference. Especially as we know that women generally retire with 25 per cent less in superannuation than men.' Paid parental leave is based on the minimum wage, which will increase by 3.5 per cent to $24.95 per hour, or $948 per week, on July 1. The move is expected to improve the retirement balances of around 180,000 Australian families each year. In Australia, WGEA data found 68 per cent of employers offer access to paid parental leave on top of the government scheme. The majority (87 per cent) who offer paid parental leave also pay superannuation for parents while they are on leave. For workers who don't, Brown said it can be worth asking your employer if they will pay super during your leave. 'The more an employer is asked this question, the more they may decide to think about actually paying super on parental leave,' she said. If you are eligible for parental leave pay, the Australian Taxation Office (ATO) will pay a super contribution directly to your super fund. This is called the Paid Parental Leave Superannuation Contribution (PPLSC). If you share your parental leave, each parent will get the super contribution based on how many days they use. It will be paid automatically after the relevant financial year ends, starting from July, 2026. Brown said it was important for parents to take proactive steps to prepare their super before they go on parental leave. That includes checking your insurance, as inactive super accounts may lose cover unless you elect to keep it. 'That can happen if it's been over 16 months since you've had a contribution,' Brown told Yahoo Finance. 'So you can actually ask your super fund. There's usually a form where you can just elect to ensure that you do keep that cover.' It can also be worth considering voluntary contributions before or during your leave to help grow your super, or spouse contributions or splitting. 'At the end of each financial year, you can split the super contributions received from the employer so your concessional contributions, you can split to your spouse if you wish,' Brown said. "It's up to 85 per cent of the concessional contributions. So they do allow for the 15 per cent contribution tax, and it's also limited to the concessional cap.' If you have multiple super accounts, it could also be worth consolidating them to save on fees. You can get this through myGov. It may also be worth considering your investment mix and getting financial advice tailored to your circumstances. 'A lot of super funds these days do provide limited advice at no extra cost to you. So it can be a really good time to have a chat to your super fund about what services they can help you with,' Brown pour accéder à votre portefeuille
News.com.au
a day ago
- Business
- News.com.au
Opposition open to tax reform, warns against hiking pressure on Australians
The opposition says it is open to working with Labor on tax reforms but is warning against putting further pressure on Australians. Jim Chalmers used a major speech on Wednesday to flag the Albanese government was looking at reforms beyond its proposal to roll back concessions on ultra-high super accounts. The Treasurer said a rethink was needed to address revenue challenges posed by an ageing population and the transition to net zero. Mr Chalmers also said it would be on the agenda at the upcoming roundtable on productivity, which measures how efficiently labour can produce goods and services. Opposition finance spokesman James Paterson has welcomed 'the government's recognition that we have a productivity crisis' and said roundtable 'is a good first step'. 'But we need more than just a meeting,' Senator Paterson told Sky News on Thursday. 'We need a plan of action to come out of it.' In his speech, Mr Chalmers said reforms would open opportunities for tax breaks for some but warned there would be 'trade-offs' that could leave some paying more. 'I am concerned that the Treasurer is possibly preparing the ground here for higher taxes and in the middle of a productivity crisis, and particularly in the middle of a business investment crisis, which is at decade lows, the last thing the Australian economy needs right now is higher taxes,' Senator Paterson said. 'We are up for a conversation with the government, to work with them constructively to make our tax system more efficient, to collect revenue and revenues in ways that are less distortionary, but we are not going to give them a blank cheque to increase taxes on Australians at the worst possible time for our economy.'
News.com.au
2 days ago
- Business
- News.com.au
Treasurer Jim Chalmers has declared his stance on push to increase the GST
Treasurer Jim Chalmers has declared he won't play the 'rule in, rule out' game on future tax changes, including lifting the GST, despite making clear his personal opposition to the idea. Speaking at the National Press Club, the Treasurer outlined his ambition to develop a 'bold' reform agenda. However, he has warned that wherever the debate lands, he won't be discarding the tax reform plans for which he secured a mandate at the last election. That includes his superannuation tax changes targeting wealthy Australians with more than $3 million in retirement savings. 'We're not looking for opportunities to go back on the things that we have got a mandate for,' the Treasurer said. 'We're looking for new ideas.' Despite declaring that the 'rule in, rule out game' was corrosive to public debate about big ideas because it sparked media firestorms, Mr Chalmers was then asked about the inevitable push from the states about lifting the GST. While the International Monetary Fund has previously suggested Australia should expand consumption taxes such as the GST to help repair a blowout in the deficit, that's not an idea the Treasurer has backed. The GST has been stuck at 10 per cent for 23 years. During his speech at the press club, Mr Chalmers was asked if he had an open mind about revisiting the GST ahead of talks from senior economists and business leaders to inform the Albanese Government's future agenda. 'Historically, I've had a view about the GST,' the Treasurer replied. 'I think it's hard to adequately compensate people and I think often an increase in the GST is spent three or four times over with the — by the time people are finished with all the things they want to try and do with it. 'What I'm going to try and do, because I know the states will have a view on it, I'm going to trial not to dismiss every idea that I know that people will bring to the roundtable. 'I suspect the states will have a view about the GST. It's not a view I've been attracted to historically, but I'm going to try not to get in the process of shooting ideas between now and the round table. 'My view has not changed on all of the other times that I've been asked about it. But I think one of the ways I'm going to be inclusive and respectful. I suspect people will raise that question.' 'So you're not ruling it out?,' he was asked, prompting laughter. 'I haven't changed my view on it. And, again, it's a nice little cheeky attempt to get a rule-in-rule-out in,' he said. It sounded to me like you were ruling it out,' Nine's Andrew Probyn said. 'I'm not walking away from those views,' the Treasurer said. 'We genuinely want to hear people's ideas.' Treasurer Jim Chalmers has previously opposed raising the GST or cutting company tax rates, expressing a preference to undertake 'modest but meaningful' tax changes in 'bite-sized chunks'. Two years ago, Mr Chalmers warned that raising the GST would not fix the problem since the tax was collected by the federal government and distributed back to the states. 'From my point of view, there are distributional issues with the GST in particular. Every cent goes to the state and territory governments, so it wouldn't be an opportunity necessarily, at least not directly, to repair the Commonwealth budget,' he said.
