If I am ever asked what I think is the biggest issue facing retirees today, I would immediately answer – “the way the Government (both sides) insists on fiddling with the superannuation system”. Our retirement funds have become a bit like a ‘piñata’ that is periodically hit to give forth a bit more tax or to render down a benefit that is perceived’ inequitable’ by the prevailing legislators.
Unfortunately, in the process of adding a few extra dollars to an ailing budget bottom line, the gov- ernment continues to erode public confidence in the very system supposedly created as the preemin- ent retirement savings vehicle. Therefore it was of no surprise that our most recent budget con- tained the usual tinkering.
This time it was the introduction of a contribution cap, limiting the amount of after tax dollars an individual is allowed to deposit into their super. On the surface not too much effect on the majority of the population as the limit was set at $500k. A figure it seems that the treasurer is confident will only be an issue to 1% of the population as the rest of us will never have that amount of money!
Okay then, the government is trying to reduce the instance of the richest segment of the population taking advantage of the generous tax treatments available in super. A noble quest you could say, and one that seems to have little effect on us salar- ied minions except for one very important in- clusion – the proposed caps are to apply retro- spectively commencing 2007.
Now this concept of retrospectivity completely changes the game, deviating well and truly from the norm. Historically any new legisla- tion regarding superannuation (and there’s been lots) has always taken effect as of the date of its announcement. This allows existing entitlements to be retained unchanged and puts everyone on the same page going forward.
So up to now, although irritated by the constant changes to super, at least we were able to accom- modate future changes without having to be concerned about what we may have done in the past.
But, with the sudden addition of retrospectivity to super legislation, the Government has created a particularly dangerous precedent that I fear will be called on time and time again, to prop up reck- less government spending at the expense of our retirement incomes.
Sadly, any guarantee, assurance, promise or any other word with a similar meaning, that any Gov- ernment representative utters in an attempt to assuage the population into believing that this will be the very last time changes will be made, must be seen as an almighty bare faced lie!
I believe it is time we all wrote some emails to our elected members of parliament!
