I know you mean well Tristan but your claims about superannuation are both incorrect and distorting. You can model super quite easily on a spreadsheet and you will see that over 40 years a typical fund will have paid out about 30% of the fund balance in tax. Super pensions payment levels are directly in proportion to the fund balance on retirement. To put it in perspective, income tax of 30% is only paid by those earning more than $150,000.

I do agree that some people on very high incomes are doing very well with super but they make up only a small proportion of the total. Recent data released from the ATO show that 89% of SMSF have less than $2 million in total. For a typical husband and wife fund this is equivalent to paying out two pensions of $40,000. Obviously, a combined family income of $80,000 isn't doing it that tough, but remember that 89% are getting less than this.

Hi Wattle;

Richard Denniss shows that a third of over $40 billion in superannuation tax concessions were going to the top 5% And yes we're talking about millionaires and multi-millionaires.

see: http://www.abc.net.au/worldtoday/content/2012/s3568235.htm

Assuming a strata of 'upper middle class' recipients as well that would probably extend to at least 50% to the top 10% - probably more.

And the following article shows that the bottom 20% income demographic accounts for only 1% of total wealth -

see: http://theconversation.com/income-and-wealth-inequality-how-is-australia-faring-23483

So there really are tens of billions to be saved if we remove regressive concessions, and restructure the overall tax mix.

Remembering that the alternative they're mooting is to hit disability and aged pensioners.

The problems raised by Tristan, are created by the revenue raising model, with all of is flaws and exclusions; usually for the very wealthy and or, a large portion of the multinationals, (40%?) who pay no company tax to anyone?
Yet continue to prosper, doing business here!
Bringing just this element into the tax collection fold, could increase the budget bottom line, by as much as 100 billion.
The only way this could ever be done, is by completely jettisoning the current complexity, in its entirety, and replacing all that convoluted complexity, with a single stand alone, unavoidable expenditure tax, set at around 4.8-5%.
This would also end the ability of huge companies like Rio Tinto, to offshore our money, and start finally paying a fair share of a common tax liability.
Just this much change, would lift the budget bottom line by as much as an 100 additional billion!
The upside, would be the repeal for Gina Clive and all the other self made men, [ born in log cabins, created with just their own two hands,] would be the accompanying repeal of fuel excise, payroll tax, personal income tax, company tax, the mining tax, the carbon tax and so on.
I mean, an expenditure tax, is also a defacto carbon tax, given your's and my carbon footprint, is only as large as our actual expenditure!
And with the repeal of all other tax, save say a states' alcohol and tobacco excise, we could add another 7% to the averaged bottom line, due to, it would no longer be necessary to comply with, or expend any actual money, complying with a jettisoned tax act!
A huge and inordinately powerful lobby, which likely includes many of the former bankers, [Directors and CEO's,] who between them created the GFC, will cry foul or reject change or increased tax transparency!
As will all those with skin in the current complexity.
I mean, and for heavens sake, where we successfully lead, others with even more powerful reasons for reform, will surely follow!
Rhrosty.

Hi Tristan.

I think you should be wary of the $45 billion that Richard Denniss is referring to because it's a Treasury number taken out of context. It assumes that super is taxed at the top marginal rate. This would mean that retirement savings would be taxed at a much higher rate than normal income. For example, a person earning $38,000 would pay 35% tax on their entire super contributions, and do you think this is fare?

The main problem we have with super taxation is that it is taxed at the front end rather than the back end. When somebody is making contributions when they are 18, we don't know how wealthy they will be at 65. A system that didn't tax fund contributions or earnings but taxed withdrawals at normal tax rates would give low income earners a much better deal and deter the super wealthy from loading up their super.

Wattle,

Good posts, thank you.

What I don't understand is - why target pensions
and the vulnerable? Why allow the big-end of town
to become richer, and the poor, poorer? If we're
in such tire straights economically as they claim -
why not get polluters and mining companies to pay?
Why insist on keeping the Paid Parental Scheme - and
neglect investing in child-care. Why take away funding
from Charities such as the RSPCA and others that do such
a good job and are involved in the community? The list
goes on and there are so many unanswered questions.
Being selective in who to target for "belt tightening,"
is simply not fair. Politicians should take heed of
public opinion. Their jobs depend on it.