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Sigh… not the “great big new tax” line again

The same old dog-eared Liberal Party playbook has been dragged out again with Liberal Party federal director Andrew Hirst warning voters about Labor’s “great big new tax on ­retirement savings.”

ProMo has embraced the talking points, accusing Labor of wanting to “take to hardworking retirees who’ve done nothing more than do the right thing and save for their retirement and try to get ahead.”

Hang on.

Wasn’t it Scott Morrison’s 2016 budget that caused over 330,000 Age Pensioners to have their entitlements cut with at least 100,000 of those losing all pension entitlements?

And didn’t the then Treasurer for Graphs also try to retrospectively introduce a lifetime cap on non-concessional superannuation contributions (NCC) of $500,000?

When the Coalition attack Labor for adjusting their policy to exclude pensioners from their proposed changes to excess franking credits, they seem to forget their backflip on the NCC cap which they tried to argue was not retrospective but which patently was.

On 15 September 2016 the Coalition Government dumped this change and replaced it by a $1.6 million total superannuation balance limit that precluded further NCCs from 1 July 2017 where a member exceeded a $1.6 million superannuation balance.

From 1 July 2017, the threshold at which high income earners pay an extra 15% additional contributions tax was reduced from $300,000 to $250,000 and the annual concessional contributions (‘CC’) cap was reduced to $25,000 each financial year (indexed in line with AWOTE). Previously, the general limit for the prior financial year was $30,000 (or $35,000 for those aged 49 or above on 1 July 2016).

In contrast to the Coalition Government’s surprise changes announced in May 2016, the Labor Government has provided prior notice in relation to its proposed changes to superannuation, franking credit refunds, negative gearing, capital gains and trusts.  Some changes will be grandfathered. This gives investors time to plan and change their investment strategy if they so choose.

Remember Abbott saying “There will be no changes to super, no adverse changes to super in this term of Parliament, and we have no plans to make adverse changes to super in the future”?

The reality is that both Labor and the Coalition are trying to unwind some of the unsustainable largesse bestowed during the Howard years. The difference is that Labor is honest about it.

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  1. pierre wilkinson

    and the media… “coupled with Labor being inept fiscally this tax on Nanas will win ProMo some elderly voters” (who do not even qualify for the new tax)
    we have already had a taste of ProMo’s promos and I dread to think that they will only get worse
    fact check anyone? election? please?

  2. New England Cocky

    Bring on the Federal election unless Benito Duddo challenges to become Prim Monster.

  3. David1

    The desperation of this rabble of a non-government led by losers is becoming so evident it is pathetic.

  4. Andrew Smith

    In The Australian today, Chris Kenny (again) promoted the need for the return of Abbott to the front bench, or worse….

    Good news, the last UK General Election (with Crosby Textor coming up with ‘strong and stable’ for PM May, that went down well….) which lost the Tories’ clear majority, also highlighted the declining influence UK tabloids and Murdoch press (back grounded by the older end of the electorate popping their clogs), hopefully…..

  5. Kronomex

    The LNP, for years now, only has lies that are dragged out time and time again whenever things are not looking good for them. Labor…ooohhh…big tax…Labor…eeee… weak on border protection…Labor…aagghh…weellll, just about anything else you can think of Labor is going to destroy it.

    I can picture Scummo and The Potato kneeling beside their beds each night and praying for just a little something they can use to declare martial law then they can do away with this annoying thing called “democracy” (not that we’ve had much resembling it for some years).

  6. paul walter

    It’s the ad-man again.

    Doesn’t matter its a lie, will now hammer it over and over because that is what brainwashing is about.

    Braggart psychopath behind the Xtian disguise.

  7. terence mills

    The problem seems to be that far too many retirees were put into Self Managed Super Funds by their financial advisers with a disproportionate reliance on shares and the associated lurks : more fees for the advisers.

    The imputation credit system was designed to prevent DOUBLE tax on dividends which is fine but there is no justifiable reason to provide ZERO tax on profits paid as dividends. However,as a number of economists and tax specialists have pointed out, there is an anomaly in Labor’s policy : a SMSF that is in accumulation phase will stll be able to benefit from imputation credits, but as soon as the person retires — when they actually need the income they are generating — they will be unable to claim the benefit.

    Labor really have to get on the front foot on this one as there is a lot of misinformation being peddled and there are pensioners signing petitions even though they will not be affected. Labor has already amended the policy exempting pensioners and grandfathering self-managed super funds with at least one pensioner or benefit recipient.

    If Labor cannot explain their policy beyond saying to retirees who are unhappy with the policy on dividend imputation that they are “entitled to vote against us.” they could be in for a big backlash from retirees at the election.

    The coalition were able to get an ad out within hours of Bowen commenting the other day and Labor really has to respond as this is their Achilles heel.

  8. Kaye Lee

    That was a poor response from Bowen.

    What he should have said was, we will consider any unintended consequences or concerns raised with us and, if the policy can be improved, we will listen to your input.

  9. andy56

    just have to trot out the Abbott lie about power prices $550 lower under them to kill this stupid narrative. Just a video of him lying will be sufficient. The picture of them celebrating the removal of the carbon price really was a stab in the back to us of some intelligence. Time to put their faces in the feaces they dropped on us.

  10. andy56

    Terrence mills , i strongly disagree with your assertion about retirees and SMSF. I didnt go to anyone to set mine up. I earn on average $30,000 a year with 1/3 from frankin credits. You would have to be an economic illiterate to think 10% return on bank shares was impossible. As for the whole super setup, it’s f#cked. Taxed on the way in, taxed whilst in and now throttled on the way out.
    Should be one tax on exit only. We should be encouraged to put as much as possible in. I dont care if you put $20m. When it comes out, it can be taxed generously, say $50,000 and up. That gives you scope for a secure retirement and the super wealthy still pay their share at a reduced margin, the government pension then gets reduced accordingly which was one of the initial benefits trumpeted. Anything else is just gouging of my retirement.

  11. Matters Not


    could be in for a big backlash from retirees at the election.

    Indeed! (Been saying for some time it’s an election sleeper – or at least was a sleeper – it’s now awake). The backlash won’t come just from retirees but also from offspring who are also upset and also those 1.1 million SMSF members as at 30 June 2017 – many of whom are yet to retire but who can do their sums. (Why one would want to be in a SMSF is beyond me – far too much time on their hands apparently.)

    It will have a political backlash. Probably not enough to cost Labor the election – but possibly they didn’t want to win by too much anyway. Shorten doesn’t want the problem of too many on the backbench with time on their hands for playing political, faction games

    But putting that aside, look at who made the decision and the why. Bowen like his idol Keating wants to be known as a good Treasurer. (Shades of Costello.) To be a good Treasurer, then a record of surpluses are required – keeping debt to an absolute minimum. Well that’s the belief anyway. Labor’s economic team – Bowen plus Chalmers and Leigh – already showed their political incompetence when they overstepped the mark re taking money from pensioners et al and it was only the intervention of that supposed social policy guru Macklin who rescued Labor from that complete policy disaster. But their intentions were clear. Will they backflip after the election when the going gets tough – as it inevitably will? Economists like Lawyers don’t make good policy decisions in my humble opinion. They lack the political smarts.

    Seems to me that Labor has a real problem with this well thought out policy – which wasn’t AND this problem extends to overall TRUST. Retirees and those who can see retirement coming tend to be nervous critters – easily scared – somewhat fearful of an unknown future. It’s why they tend to vote conservative and now their offspring have reason to be also fearful.

    As I pointed out elsewhere, Labor has other revenue options but this was low hanging fruit that all sides of politics have considered for years. Is the apple poisoned – a forbidden fruit? If it is, then Bowen will have his ambitions binned.

    A few stats on SMSFs. Must admit, I didn’t realise how many people see themselves as economic/investment gurus. Lots of anger there.–a-statistical-overview-2015-2016/?page=2

  12. RomeoCharlie29

    Crikey’s Bernard Keane had a link to an ABC fact check which delved exhaustively into the specifics and numbers in the claims being made by the lying bastard government about the impact of the proposed change to franking credits. Although it was a bit eye-glazing it very comprehensively debunked the figures as well as looking into the numbers of millionaires who can reduce their taxable incomes to sfa. My computer incompetence prevents me from providing a link but I’m sure someone here could do that, although that might be preaching to the converted. I do agree that, while honest, Bowen’s advice was a bit unhelpful. Unfortunately this is such a complex subject it’s easy to misrepresent and hard for Labor to counter in a simple way. Perhaps something like: “Do you think it’s fair that people who haven’t paid any tax should be given a tax return they haven’t earned?” Or have I oversimplified it?

  13. Matters Not

    RomeoCharlie29 – oversimplification is the art of politics unfortunately. Remember – Debt and Deficit Disaster?. Remember – Tampa? Also Red Arrows on a Map on more than one occasion?

    RomeoCharlie29, a quick Google will provide lots of articles

  14. Kaye Lee

    Figures from the Parliamentary Budget Office show that almost a quarter of all excess franking credit refunds claimed in 2014-15 went to 33,761 self-managed superannuation funds with balances of over $2.4 million.

    Under Labor’s “pensioner guarantee”, according to estimates by the Parliamentary Budget Office, some 320,000 pensioners and allowance recipients would continue to be able to claim cash refunds for excess imputation credits. Bill Shorten also promised self-managed superannuation funds with at least one pensioner or allowance recipient before March 28, 2018 would be exempt.

    In a recent submission to a House of Representatives Inquiry, the Grattan Institute gave the following example.

    “Take the example of a self-funded retiree couple with a $3.2 million super balance, plus their own home, and $200,000 in Australian shares held outside super. Even drawing $130,000 a year in superannuation income, and $15,000 a year in dividend income, they would report a combined taxable income of just $15,000 and pay no income tax whatsoever.”

    Calculations by the Grattan Institute show when superannuation income is removed from ABS income and wealth survey data (reflecting taxable income), almost half of the wealthiest 10 per cent of those over 65 report income of less than the $18,200 tax free threshold and thus pay no tax.

    On average, however, this group had wealth of nearly $2 million, even before factoring in the value of their home or other property assets.

    The Parliamentary Budget Office estimated the bottom 50 per cent of households by net wealth own just 3.2 per cent of the total value of Australia’s shares, with 72 per cent of the value of all shares held by the top 10 per cent.

    Treasury has found that 90 per cent of the refunds accruing to superannuation are claimed by self-managed superannuation funds.

    The Parliamentary Budget Office analysed the impact of the policy on this sector, finding that in 2014-15, 201,439 self-managed superannuation funds claimed almost $2.6 billion worth of excess franking credits.

    The bottom half by fund balance claimed just 6.4 per cent of the total value, compared to more than half claimed by the top 10 per cent of funds with balances of more than $2.4 million.

  15. Kaye Lee

    This is another good article putting the excess franking credits scare campaign into perspective.

    In 2014-2015, 1.13 million individual taxpayers claimed excess franking credits, according to the PBO. In other words, 92 per cent of taxpayers did not claim excess franking credits through their personal income tax return. And Labor has already promised to exempt pensioners.

    More than 80 per cent of excess franking credits claimed by SMSFs went to funds with balances above $1 million

    It’s not sustainable to have situation where most people over the age of 65 pay no tax, especially if they’re objectively wealthy, nor one where the government doesn’t get its share of corporate profits simply because a company chooses to pay it all out in the form of dividends to retirees who can claim a lower rate.

    Labor has been praised for developing policies and taking them to an election, rather than running a small-target strategy. The flipside to that is that it has provided a target and its opponents are practising their archery.

    So far any objective analysis would have to conclude that the arguments are missing their mark.

  16. Matters Not

    Politically, Shorten would not want superannuation matters to be at the forefront of the political debate, particularly when the (legislated) details are yet to be determined. Relying on economic ministers for political tactics and strategy is fraught.

    He needs a distraction. Try Health.

  17. Kaye Lee

    Climate change is the obvious area to go hard.

  18. corvus boreus

    Corruption is another issue where the ALP should go hard.
    Shorten dangled the abstract promise of a watchdog (NIC), and Morrison reacted by proffering a toothless poodle (CIC).
    Shorten should be re-formulating then releasing a convincingly fierce framework proposal, and referencing it against obviously manifest perfidies like coalition complicity in the rape of the Murray Darling system, and the corruption and operational compromise of the AFP by the office of the Minister for Employment (the delightful Ms Cash).

  19. Matters Not

    Re the MDS, Burke’s role might prove to be less than edifying. Was he the Minister that demanded the embarrassing 2?

    As for NIC, there was an opportunity to develop and release a discussion paper – all care – no responsibility. Maybe it’s not too late.

  20. Matters Not


    the arguments are missing their mark.

    Are you sure? Always difficult to tease out what causes what – particularly when there’s usually a dreaded narrowing as an election approaches. Perhaps it’s started:

    The Australian reports the first Newspoll of the year has Labor leading 53-47, compared with 55-45 in the final poll of last year. On the primary vote, the Coalition is up two to 37%, Labor is down three to 38%, the Greens are steady on 9% and One Nation are down one to 6%.

    Newspoll: 53-47 to Labor

    Very difficult to determine what will be the issue this far out. Unless the voters have stopped listening – and I think that many have. Seems to me that Labor needs more emphasis on social policy – show their softer side.

  21. Matter Not


    Climate change is the obvious area to go hard.

    Seems obvious. But perhaps it’s a bit like motherhood and apple pie – everyone’s in favour but that commitment might just be superficial – in the sense it’s not a vote changer.

    By way of explanation. Almost everyone wants to see more money spent on education. It’s the right thing to say. It’s a feel good statement. BUT it’s not a vote changer for a significant section of the population. Nevertheless, it is for many Catholics who know that they don’t get a fair deal. Who know that by sending their children to Catholic schools they save the government significant amounts of money. Who know that in many ways they are modern day martyrs. That it’s all bullshit is irrelevant. They believe it and as Shorten knows only all too well it’s a vote changer for that significant demographic. Shorten has and will look after them. For public school parents, well that’s NOT a vote changer.

    Whether climate change is a vote changer is yet to be tested. Yep action on climate change might be a reinforcer (and that’s important) but a vote changer? On the other hand, I suspect changes to dividend imputation is a vote changer – even if its expression is confined to the secrecy of the ballot box.

    Elections are won or lost via issues that are vote changers. And that’s the truth of the matter.

  22. Kaye Lee

    I would have to disagree about excess franking credits being more of a vote changer than climate change. The vast majority of voters, 92% in fact, have nothing to do with excess franking credits and I would suggest most of them don’t even know what it means. But everyone can see the danger from climate change (ok except the Monash Forum boys). Whilst Wentworth was probably more a backlash against ousting Malcolm, it has given momentum to the climate change discussion again. Liberals everywhere are publicly saying how toxic it is in their own party on this issue.

    If someone is more concerned about franking credits than climate change then I would suggest they are probably a died in the wool Liberal voter anyway.

  23. Matters Not


    vast majority of voters, 92% in fact, have nothing to do with excess franking credits

    How can you be sure? Have you seen the legislation? Are 92% not in a superannuation scheme? I suspect that in the foreseeable future many will entertain the notion that they might be both affected and effected. Or at least they will have the fear of that.

    Yes there is momentum re climate change but where is the evidence that it’s a voter changer and not just a ‘tut’ ‘tut’ nod of the head. Yes it’s in the news in Australia, the US and elsewhere because it’s real but where has it kicked a government out of power? Certainly not in Europe – where the vote changer is ‘refugees’ – as it is in Britain (broadly defined). I should stress, I’m not talking about the ought but the is. The hard cold political reality. Not the wishes and hopes.

    And perhaps a dyed in the wool liberal voter?

  24. Kaye Lee

    “How can you be sure? Have you seen the legislation?”

    In 2014-2015, 1.13 million individual taxpayers claimed excess franking credits, according to the PBO. That’s 8% apparently. With pensioners exempt it would be much less.

    “Given the vast majority of retirees with superannuation savings are in super funds with tax liabilities, most retirees won’t see much of a change to their retirement incomes under Labor’s policy.”

    Labor have also said they will speed up the increase of the superannuation guarantee to 12%

  25. Matters Not

    KL, my super fund QSUPER – the Fund of the Year – almost every year since … has already announced a shift out of Australian equities (quietly so as not to frighten the horses) – anticipating lower highs and higher lows because of ‘anticipated’ legislation.

    What’s promised seems like good public policy – but when has good public policy ever won the political day? Again I stress – look at the hard. cold political reality.

    I know the political hard-heads of the ALP will be doing just that.

    Note in particular – ‘not much’ of a change.

  26. Kaye Lee


    That is not my forte. I don’t do politics. I try to look at evidence.

    That’s why I would be crap at being a politician. I really couldn’t bring myself to waste the money sending out birthday cards to my constituents….for example. And if I could ring someone, I don’t see the need for me to get out of my jammies to fly somewhere to have my photo taken with them. And I would REALLY resent being given talking points by the party machinery.

    I am more interested in solutions than political reality. And yeah, I understand you can’t do anything if you aren’t in government. But I just have this truth obsession I can’t shake….

    I am not suggesting I know the whole truth. But I am always in search of it so welcome whatever we can collectively find out.

  27. Matters Not

    KL – whether you like it or not – you do do politics – broadly defined to include the exercise of power.

    You have a faithful and in some cases an unquestioning readership. – you do do politics.

    You want to change things. Thus you do do politics.

    (You) exercising political power should not be denigrated. Think of the alternative. Me – I know I do. LOL

  28. Kaye Lee

    We should never be unquestioning. We should share differing pieces of information. I am here to learn too. I am accused often of always thinking I am right. Well of course I do because if I knew it wasn’t right, I wouldn’t think it. I always want to be corrected if something I have said is factually wrong and I want to hear information that might make me change my mind or better inform my view. But I do tend to ask a lot of questions to be convinced (sorry John Kelly, you have taught me a lot even if it may not seem so)

  29. Matters Not

    KL, my recently installed pacemaker is telling me to go to bed but while ‘facts’ are important building blocks and therefore necessary (and frequently over-rated) – they are not the whole building. Rather it’s the selection of facts, the ordering of and the meaning given to same that makes the architectural masterpiece – intellectually speaking.

    But you already know that as is evidenced in you writing. LOL.

  30. Kaye Lee

    Dors bien. A demain.

  31. terence mills

    Kaye Lee

    The coalition make it easy for their elected members : remember the One Nation dogwhistle motion that It’s OK to be white ?

    The coalition members didn’t need to think but just lined-up like so many automatons to vote with Pauline as directed even as the Labor senators were calling out do you know what you are voting for ?

    That more than anything demonstrated the deeply flawed problem with party politics and in particular the way conservatives select their candidates : leave your brain at the door and you fit right in – example Craig Kelly.

    I rest my case !

  32. Kaye Lee

    Ah yes terence.

    Greens whip Rachel Siewert called out “Do you know what you’re voting on?”

    Barry O’Sullivan responds: “I don’t know and I don’t care, because you’re over there, which means I’m over here. It’s all I need when I come in. I don’t look for the whip, I look for you people.”

  33. Kronomex

    I just realised that the LNP reminds me of the Psi Corps in the TV show Babylon 5 and the following paraphrased (apologies to J. Michael Straczynski) sayings are apt –

    “The LNP is mother, the LNP is father.”
    “The LNP is your friend. Trust the LNP.”
    “We Are Everywhere For Your Convenience.”
    “Protect the family.”
    “We know what you’re thinking.”

    Anyone disagree?

    Please delete the other version of this post, made a boo-boo.

  34. Zathras

    Coming from the people who brought us Children Overboard, economic wrecking ball, Whyalla wipe-out, hundred dollar lamb roasts, Saddam’s WMDs and people-shredder and the alleged armada of illegal boat people just waiting over the horizon, the latest scare tactic is not surprising. Nothing positive on offer from themselves but all bad news from the alternative. Nice economy you have here – it would be a shame if something bad happened to it.

    No matter how you look at it this (so-called) retirement tax is just more Middle Class welfare. No other country in the world lets you claim back tax that you haven’t actually paid and any serious analysis will show that historically the coalition is always a higher taxing party overall.

    I’m waiting for the free set of steak-knives promises yet to come when the official campaign starts.

    Meanwhile when it comes to handouts I wonder how our no-questions-asked gift of millions of taxpayer dollars to Rupert Murdoch to promote womens’ sport on Foxtel is coming along? There must be some result by now.

  35. totaram

    MN: FYI

    But I am sure you know about this, so don’t keep saying it is the most wonderful fund of the year or whatever.

    PS. Sorry to hear you have a pacemaker. I don’t know your problem, but it may help if you find a practitioner who uses lifestyle changes to help. You can look on this site:


    I have used this to bring my diabetes into “remission” even though many doctors will tell you that is not possible..


  36. Matters Not

    totaram – yes I am aware of the QSuper stuff up that ONLY applied to some of those on defined benefits apparently.

    As for my health – I’ve had my three score years and ten and quickly approach the four score milestone. The triple bypass is also supposed to help. (LOL.) But thanks for the advice

    Todays’ Pearls and Irritations has an insightful article by IAN McAULEY. Basically he says that Labor is on the right track in dealing with the terrible injustice that sees well-off retirees exempt from tax. A sentiment I agree with as argued elsewhere. Using a mythical couple as an example he points out:

    financial wealth has come from taxpayer-funded benefits – university fees, infrastructure for their first house, superannuation subsidies, privatisations, and now that they’re almost 70 from private health insurance rebates …

    His solution:

    A far more just reform would be to leave imputation credits untouched , but to make all income from superannuation in the pension phase (i.e. in retirement) subject to normal tax . … would not be pushed to re-arrange their portfolios into tax-avoidance schemes, at a cost to public revenue. And the very rich, presently privileged with a 15 percent concessional tax rate for balances above $1.6 million, would be brought into the net of progressive income tax.

    But most condemnation must lie with those who complain about Labor’s proposals without even acknowledging how extraordinarily inequitable our taxation system has become in relation to highly-privileged wealthy retirees. Lobby groups for older Australians have done nothing but grizzle, without offering alternative suggestions on how these inequities can be addressed, and opportunistically the Coalition has joined the chorus.

    He does point out nevertheless:

    Franking credits are actually refunds of company taxes that have been paid on behalf of shareholders. Most Australians don’t understand dividend imputation, and right up to recent times the Coalition was peddling the lie that Australia’s corporate tax rate is 30 per cent, ignoring the benefits of imputation which brings the effective rate of corporate tax for Australian investors down to around 15 per cent

    In this article he does not mention tax evasion by multi nationals but I note that Swan in this week’s Crickey seems to have discovered the problem As always – somewhat late to a scandal that’s been decades in the making.

    IAN McAULEY. Labor’s policy on imputation credits is flawed, but it’s in the right direction

  37. Zathras

    Those franking credits under dispute are only relevant to those retirees who already pay no tax because they are self-funded retirees paying themselves from a dedicated pension. They have nothing to do with Superannuation investments or pensioners who may own a number of shares.

    They were intended to offset tax payable from other investment sources and not from an already tax-free income.

    This makes some people no longer self-funded but partially taxpayer-funded.

    I’m a self-funded retiree with a small share holding and I can see the imbalance of not only paying no tax on investment income but taking even more from taxpayers. In my case the hand-out (about $150) is less than the cost of my accountant’s fee so I sign the lot over to him on the principle that it’s better in his hands than in the government’s.

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