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Super matters no media wants to let people know

September 6th, 2017 No comments
6th Sept 2017

Debate: is the new means test for the aged pension fair?

The meanest means-test of the age pension.
The Australian government provides every retired person with the safety net of the age pension, subject to the means test.

According to the means test of income, a single pensioner loses 50 % of the age pension after his/her income exceeds $162 a fortnight or $4212 per annum; a couple loses after an income of $4288.00 per fortnight or $7488.00 per annum.
If a single self funded retirees income falls below $1896.00 per fortnight or $49296.00 a year, or a couples income falls below $2902.00 per fortnight or $75452.00 per annum they can claim a part age pension.
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No media wants to print this super data.

September 3rd, 2017 No comments
3’rd Sept

Debate: is the new means test for the aged pension fair?

The meanest means-test of the age pension.
The Australian government provides every retired person with the safety net of the age pension, subject to the means test.

According to the means test of income, a single pensioner loses 50 % of the age pension after his/her income exceeds $162 a fortnight or $4212 per annum; a couple loses after an income of $4288.00 per fortnight or $7488.00 per annum.
If a single self funded retirees income falls below $1896.00 per fortnight or $49296.00 a year, or a couples income falls below $2902.00 per fortnight or $75452.00 per annum they can claim a part age pension.

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The rotten systems and is there an alternative

January 8th, 2017 No comments

The Rotten Systems, and is there an Alternative?

The so called Civilizations since mankind came out of the cave, or maybe  down from the trees have hardly changed over thousands of years, because we are now as brutal to each other as they were in the stone ages; the only difference is, that thousands of years ago, men fought each other with sticks and stones, and now destructive weapons are used to the point that the planet on which we live could be completely destroyed in matters of minutes, if the potent weapons, designed by very clever people, put into the hands of not so clever, so called leaders, be they Kings, Dictators or just Politicians, and none of the latter display any scruples or courage to speak up against what should be spoken up against.

But in the so called Democracy, are the Politicians only to be blamed?

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The impact of the superannuation means test on the average worker …

January 18th, 2015 No comments

 

The problem with the Australian superannuation system, is, that even after a working- lifetime of contribution, the majority of retirees will still depend for a large part of their retirement income on the age pension, and being held close to the poverty line, by the means test of the age pension, while the self funded retirees will live in opulence.

… in my humble opinion, it would be very appropriate if a much watched and noted program like Four Corners would bring the “Great Australian super fraud” to the attention of the general public.

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Means test of age pension creates two classes of citizens

July 20th, 2014 No comments

5th July 2014

Dear Mr.Southcott.

Thank you for your letter of the 25’th of June 2014 in which you state “There have been no adverse changes to the superannuation system for self-funded retirees”, and then you give some figures on pensions and their indexation, all of which I,am well aware, because they are easily accessible either from Centrelink or government data.

 My concern is the means test of the age pension.

By using the means test for the basic age-pension, the government splits the Australian retirees into two groups; the 80% of either full or part-pensioners, which are greatly affected by the means test, and the other 20% of self-funded retirees, who greatly benefit from the tax-free super, if the income is derived from a so-called taxed fund, and the recipients of large defined super income, with more than $200,000 of super, who benefit to the tune of $20,000 from the 10% tax offset, which is more than a single pensioner receives in age-pension.

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Government dodges super elephant

May 9th, 2014 No comments

Government dodges the super elephant.
Superannuation tax breaks described by Australia Institute as the Hindenburg of the federal budget
AM, by James Glenday
Audio: Think tank wants big change to retirees’ benefits (AM)
“Superannuation concessions are unfair … the top 5 per cent of income earners get a third of the benefit, and the bottom 20 per cent get literally nothing.”

The report suggests scrapping concessions entirely, introducing a universal or non-means-tested age pension and upping the current rate by about 7.5 per cent to $26,273 a year for singles and nearly $39,611 for couples.

The Australia Institute says that plan would cost about $52 billion annually, leaving the budget between $13 billion and $22 billion better off. It says more money would flow to women and poor people.

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Tax reform submission

October 18th, 2012 No comments

Dr Ken Henry
Treasury
Langton Crescent
ParkesACT 2600

20’th Nov.2008
Submission for the tax Review

In the last four decades all the tax-changes have been for the benefit of the top 20% of the population.
e.g.
1)Death Duty abolished in the 1970’s
2)Estate Duty abolished 1979
3)Gift Duty abolished 1979
4) Probate abolished in the 1970-1980’s in all states
5)Huge tax concessions for super.
6) Last but not least, now tax-free super for the over sixties, if paid from a taxed super fund.
7)Tax rates have progressively been reduced
8)Dividend imputation introduced. When the company pays 30% tax and the shareholders receive the imputation credit, it is almost a zero numbers game, eg: company pays tax and the Government returns most, if not all back, to the shareholders.
How many countries have Dividend imputation?
The UK has recently abolished it.

The changes to the tax rules for super-pensions from taxed super for the over sixties must be really the icing on the cake.
Much of accumulated super assets have been accumulated with generous tax concessions, and at times no tax was paid in the accumulating stages; due to dividend imputations, negative gearing, etc.
Is there any country which has such generous provisions for the very rich?
As almost 78% of the people over the pension age receive some part of Centrelink pension, this people pay the highest tax rate, namely 40% in loss of Centrelink pension, plus marginal tax rate, if income is above the tax threshold.

The loss of Centrelink pension has increased from $0.40 in the dollar to $0.50 since this submission was made; e.g. the part-pensioners will pay for the recent increase of the age pension.

What should be the first priority in changing the tax system:
1) Abolish all tax concessions for super and abolish the compulsory super contributions, increase the wages by the amount of the compulsory super, because the super was only granted to the workers to forfeit any wage increase at the time of introduction.
2) Abolish all the means-testing of the age pension, but retain the tax offsets for seniors. The reason for the tax offsets is, that the aged are not able do certain tasks which a person of younger age can do and have to pay for that. The means test of the age pension is the meanest in the whole developed world. The Government just uses it to keep the pensioners just above the poverty, with no chance of the pensioners improving their conditions.
3)
Introduce a Universal Age Pension for all people over the age of 65; the savings on tax concessions will compensate for the extra cost of the UAP, and even provide for an increase in the pension, because currently the cost of the tax concessions equals or exceeds the total cost of the age pension.
4) Consider raising the tax rate for the extremely high incomes; how can anybody justify to keep more than half of at times grossly exaggerated income of millions? And with the generous tax treatment of super, the overpaid fat-cats are further benefiting from the generosity of our tax laws.
5) This is an extract from an article in the Australian Financial Review:

In the AFR article “ Super tax breaks favours the few” on the 30.Jan.2009 written by John Breush, John Freebairn economist of the Melbourne University was reported as saying, “It’s an incredibly inequitable system”.
Furthermore he stated “It’s wonderful for people like me but it’s not a good deal for someone who is on the 15 per cent or lower tax rate, which is quite a slab of the workforce”.

In the book “Unemployment forever or a Support Income System and Work For All”, by Allan McDonald, on page 142 (h) it is stated: Any means tested welfare system requires extensive and complex state control and regulation. Australia is slowly but surely moving towards the ultimate outcome of a means tested social welfare system-state control over finances, the savings, and the labours of the poorest in the community.

Have the politicians of Australia the know-how and will to change the tax and social system to be more egalitarian, or was the late Professor A.J.Marshall right when he wrote, as quoted in the book “Equality and Authority” by S Encel on page212: “Most Australian politicians, he wrote, aspire to parliamentary seats ‘to better their salary, to inflate their egos and feather their nests’.

John Pilger in his book “The new rulers of the world” wrote on page 175: Like Britain and the US, Australia is a single ideology state with two competing factions, discernible largely by the personalities of their politicians. The difference between Howard’s conservative coalition and the opposition Labor Party is that Howards policies are not veiled. The Labor governments of the 1980s and early 1990s oversaw the greatest distribution of wealth in the country’s history: from bottom to top. They were Thatcherite and Reganite in all but name. Indeed, Tony Blair described then Prime Minister Paul Keating as his
‘inspiration’.

Will the same even worse? shift in wealth from bottom to top happen under the current Labor Government or will it be worse?

Considering the current financial turmoil, with the possible large increase of unemployment, it can become much worse.
The main reason for that, is, that currently the house mortgages for the owner occupiers are usually based on two incomes, so the risk of loosing a job is doubled.
Furthermore if one partner loses his/her job, and the other retains his/hers, due to the means test, the couple falls onto one income, which will not be enough to keep up the mortgage payments.

In most European countries if one partner becomes unemployed, he/ she will receive 66% of the income for the next 6month, and this will cushion the risk to a certain level.
It is surprising that neither the media nor any politician has brought this problem to the attention of the Australian people.

As there is over a trillion $ of cash at the disposal of some clever investors sitting there, and waiting for the time, when there is so called “financial blood in the street” they will be ready to pounce, and that will be the greatest shift of wealth, again from bottom to top.
Lets hope the Australian politicians do everything at their disposal to prevent it from occurring.

Yours truly
W.Hawil

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