Waleed Aly takes aim at wealthy Aussies abusing super

In his regular segment on the Channel Ten Program, The Project, presenter Waleed Aly discussed the super reform policy while

In his regular segment on the Channel Ten Program, The Project, presenter Waleed Aly discussed the super reform policy while taking aim at wealthy Australians.

A known problem with super is that some of the most well-to-do Australians are using their super to avoid paying tax. The example given by Aly was a 60-year-old made up man named Tiger Thunderfist. In the example, Aly said “And let’s say that Mr Thunderfist has worked his way up to a $300,000 wage. Generally, he would be taxed at almost 50 percent on that, but if he sticks a chunk of it in super, it will only be taxed at 15 percent.”

The idea, as Aly describes it, is that high-income earners are using their super as a high-end savings account as they get closer to retirement. A matter that is affecting the rest of Australia that doesn’t have the luxury of being able to take advantage of this loophole. This issue has been a hot-button issue for both major parties going into Saturday’s election.

Aly said “Thankfully both sides of parliament agree on that premise, and each has come up with a solution. Labor and the Coalition will both increase the tax on super contributions from 15 per cent to 30 per cent for people who are earning more than $250,000 a year.” The difference in the policies is Labor’s policy comes into play from $75,000, and the Coalition would come into effect when the principle in the account goes above $1.6 million.

Aly explains the difference in policy, saying “But here’s where the two really do differ: Currently, if you are rich enough to have $180,000 lying around, you could put that into the share market and pay about 50 percent on anything that you make from it, or you could stick it into super and pay a lot less, and you could do that every year. But the Coalition is introducing a lifetime limit on after-tax contributions to $500,000 and that, by the way, would include contributions made since 2007.”

It seems to be a rare instance where both of the major parties agree on the principle of policy, but it’ll be the details of it that should sway the vote one way or another.

Do you agree with Aly that this is a win for the Coalition? Do you believe that Labor’s policy is fairer for all Australians?

  1. David  

    Ah ! but the rich still pay for the poor to have a pension, Medicare, education etc. where would we be without them. Don’t forget they don’t get any of the benefits that they pay for all their working lives. Some say they don’t need them, perhaps true but without them there would no social welfare.

    • rikda  

      David the theory that the rich got that way from working 20 hour days is a furphy.
      It’s demand that makes them rich.
      Of course many work very hard & do longer hours, but once they get established the workload is only maintained depending on how much they want to profit.
      Their wealth comes from disposable income.
      Welfare is part of their income.
      Money rotates. It’s called a buoyant economy for that reason.
      Too much greed & lack or demand destroys the balance.
      We’re all in this together.

  2. Russell Daniels  

    Having $1.6m doesn’t make you rich when you are trying to support yourself on your meager investment returns and pay for a financial adviser and all the other costs associated with having a SMSF, the money saved for your retirement is done by going without many luxuries and holidays during your working life, no one hands the money to you. These same people are not a blight on the social welfare system because they support themselves, now the have nots who squandered their money and never saved for retirement and who are now relying on social welfare are now looking at the savings of those who have worked hard and saved. Typical isn’t it, it is about bringing down the tall poppies to their level.

  3. Michal  

    To finish argument about super and “loophole”
    I haven’t heard anybody incl poor Wally promoting super-pension scheme similar to Scandi-euro pension scheme where your pension is based on years of service and contribution, run by the Goverment or appointed body and indexed for cpi. Is it so difficult to accomplish ?

  4. Trevor  

    Wally has such a chip on his shoulder,he dosnt live in the real world.

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