The superannuation changes are entirely reasonable

Since the Government’s announcement of a modest increase to superannuation taxes which will take effect in two years and affect the top 0.5% wealthiest superannuants, we have been inundated with countless headlines about unfairness, broken promises, loss of trust?and even the demise of the great Australian dream.

Really?

The groups parroting this fall into 3 camps.

1.??????The political opposition. This is no surprise, but ?fascinating given that they enacted an unlimited, overly generous tax free retirement superannuation regime in the 2008.?Subsequently they recognised this lunacy and in 2012 increased contributions tax for high income earners which was extended this in 2017 at which time they also limited tax free retirement balances to $1.6mn.

?2.??????Political commentators who triumphantly call out a ‘broken promise’. This is the same group that badger politicians before elections to commit to ‘ruling out’ any changes to the big budget items of tax, superannuation, welfare and medicare.?Ironically , these are the very changes which a fiscally and socially responsible government should be considering ?and enacting if required. Sadly, the consequence for politicians of not participating in this destructive charade is an election loss.

?3.??????The finance media, who in turn recruit a small number of my colleagues in the advice and accounting professions to seek out the injustices of this relatively minor change.

It takes creative thinking to manufacture these scenarios, but they are up to the task. One such example is the disadvantage to a farmer who own land in their superannuation fund which has appreciated enormously over the years. Farmers have previously been invoked as potential unintended victims of?other tax changes. I wonder how these hard working people feel about being recruited by the predominantly affluent city folk to support their petty gripes. My strong suspicion is they have greater concerns.

This is not to deny that there is some disadvantage in a small number of circumstances (to both farmers and others), but also plenty of opportunity to plan and restructure over the next two years. There is ample opportunity to get good advice.

Of course the closing comment from all three groups is something like “These changes reduce people’s confidence in superannuation and discourage people from saving for their retirement”.?

Rubbish.

It is not the changes that are the problem, it is the silly commentary on them that discourage people from using superannuation which is still by far, the most effective savings vehicle for retirement planning.

At least, there is some evidence that the Australian public are not falling for it and support this very modest change to superannuation rules.