Hi Boomer,
The answer to your question is that we should never have taxed super on the way into the fund with a contribution tax, and we should not have taxed super earnings in the fund during accumulation phase. We should then tax super when you go into pension phase and it should be taxed at normal rates. A number of obviously smarter countries do this . The final balance ends up being far bigger, there is no constant howling about the cost of concessions, the rules are simple and don’t require accountants and actuaries to sort it all out.
Howard tried to do something positive when he abolished the final tax on pension income in retirement, which in various forms is creeping back. So we become the only country to tax super / retirement funding at all three levels. What’s worse is that politicians will continue to meddle and further complicate what once could have been a good system . Now we have Shortens policy to remove franking credits and severely damage many pensions whose owners made long term investment plans only to have the rules constantly changed .
Nobody in their right minds trust politicians with our super any more. I wonder how many retirees have downsized their homes and put the “up to $300,000 into super” as per this Govts policy that became effective on July 1st this year.I suspect none because there is simply no trust in either party.
