Basic building blocks of the Australian superannuation rort

Superannuation is generally taxed more concessionally than some other forms of saving, such as bank deposits, in recognition of the fact that superannuation saving cannot be accessed until retirement.

 * Pre-tax contributions of up to $30,000 pa ($35,000 for those aged 50 or over) into superannuation funds are taxed at a flat rate of 15 per cent in the fund.

 * It is also possible to make post-tax contributions of up to $180,000 per annum.

 * Superannuation fund earnings in the accumulation phase are taxed at 15 per cent, while superannuation fund assets that support a retirement income stream are tax exempt.

 * Most superannuation benefits to those aged over 60 are tax exempt. [Intergenerational Report 2015]

The quote above lays out the basic outline of concessional arrangements attached to the national mandatory superannuation scheme.

How does it work in real life?

In the 2012-13 financial year 9.3 million employers contributed $54 billion to their employees' superannuation funds and 1.7 million employees contributed $27.8 billion to their superannuation funds.

Of these 1.7 million employees, 571,575 individuals earn less than $37,001 a year. Currently the federal government contributes an annual lump sum payment (equal to 15 per cent of an individual's annual superannuation contributions) to a low income employee's super fund. However, from 1 July 2017 the lump sum payment will cease and the annual superannuation contributions of these same employees will be taxed at the rate of 15 per cent.

In 2012-13 there were also 183,975 non-employee individuals (or individuals receiving only a small proportion of income from work as an employee), with income derived from a personal business/self-employment, investments, government pensions/allowances, super, partnership/trust distributions, and/or a foreign source, who made personal superannuation contributions totalling $2.9 billion. These super contributions could be claimed as tax deductions.

Of these ‘non-employees’, 26,980 had annual taxable incomes of over $180,000 and made personal superannuation contributions totalling $603.07 million. Which equates to income of $22,352 per person per annum on which little or no tax is paid.

When will the Abbott Government address the imbalance in the national superannuation scheme, where the working poor are penalised and wealthy rewarded for their participation?

Some of Australia's richer citizens in 2012-13, not content with legally rorting the superannuation scheme, took their sense of entitlement to levels undreamed of by ordinary workers, as this observation in The Sydney Morning Herald on 30 April 2015 demonstrates:

Fifty-five of Australia's highest earners paid no income tax at all during 2012-13, not even the Medicare levy.

All earning at least $1 million, they managed to write their taxable incomes down to below the $18,200 tax-free threshold, although for most the exercise was expensive.

Tax statistics released Wednesday reveal that 40 of them claimed an extraordinary $42.5 million for the "cost of managing tax affairs" meaning they each paid an average of $1 million to an adviser prepared to help to bring down their taxable income, which is itself a tax deduction.

Between them they reported earning $129.5 million, an average of $2.3 million. By the time their accountants had finished with them they reported losing a combined $12.8 million.

The implausibility of someone earning $2.3 million and paying half of it to a tax adviser suggests some may be understating​ their earnings.

A tax office spokeswoman said there were "legitimate reasons why a wealthy taxpayer might not pay tax in a particular financial year".

These included tax losses through poor business performance, tax losses in previous years which could be carried forward indefinitely and dividend imputation credits.

She said the majority of wealthy Australians paid the right amount of tax.

Most of the 55 were either ungenerous or modest when it came to giving, claiming nothing for gifts. However 10 of the 55 gave between them $10.4 million, also suggesting their incomes were higher than reported. The gifts may not have all gone to charities. The Tax Office also allows deductions for gifts to political parties.

Fifteen were unsuccessful in business, losing $2.7 million between them. They carried over previous losses of $22.5 million.

They were more successful when it came to investing, receiving $8.8 million between them in so-called 'franked' dividends, and only $839,000 in unfranked dividends. Franked dividends allow the recipients to cut their taxable incomes to take account of company tax already paid.

They were also surprisingly successful landlords. Whereas 1.3 million Australian landlords claimed between them losses of $12 billion, the 15 of the 55 millionaires who rented out properties made a combined $1.6 million dollars……

Australian Prime Minister Abbott nine days before Budget Night 2015

Australian Prime Minister Tony Abbott

It is looking suspiciously like childcare subsidies are only guaranteed long enough to take the Abbott Government through the next federal election campaign and, those older Australians whose sole income is the age pension will still be (perhaps somewhat more creatively) diddled out of adequate annual pension rises.

Of course, being Abbott, the means-tested childcare-preschool subsidy will now be paid directly to the business operating the centre and comes with an activity test for the child's mother. Show us you are working/training/studying or your child misses out.

Extract from Joint Doorstop Interview, Jordan Springs, Western Sydney on 3 May 2015:

QUESTION:

Prime Minister, why is the funding for preschools only for the next two years?

PRIME MINISTER:

Well, we want to ensure that there is certainty going forward. Obviously, we have a federation reform whitepaper and that will look at the question of who is going to take primary responsibility for preschool going forward. The important thing, as far as this Government is concerned, is that every Australian four year old should have access to preschool and we are ensuring that for the next two years, that will be the case, and the difference between this Government and our predecessor is that our predecessor government made the commitment that everyone should have access – but it didn't make the money available. It wasn't in the contingency reserve. The money wasn't in the forward estimates. We have provided the money to ensure that every Australian four year old will continue to get a guarantee of access to preschool.

QUESTION:

In terms of changes to the childcare subsidies, why is the Government moving to give the subsidies to childcare providers and how will that make families better off?

PRIME MINISTER:

Well, what we want to do is to ensure that childcare is affordable and accessible. We want to have a better childcare system. We’ve made this commitment to the Australian people at the election. We said that, first of all, we'd have a Productivity Commission report and then we would put the appropriate policy in place to implement the recommendations of the Productivity Commission. Now, we've taken those recommendations. We've subjected them to pretty fair consultation and scrutiny and we'll have some very good announcements to make in the Budget which I think the Australian people will welcome.

QUESTION:

Why do parents earning over $250,000 still qualify for a subsidy under this plan?

PRIME MINISTER:

Well, I'm not going to get into the detail of what will be in our package, but I do want to say that it is important that childcare is seen not as welfare but as a way of strengthening our economy, because the more people we can get who are contributing, well, the better for everyone. The more people that we can have participating in the economy, if that's their choice, the better for everyone because, obviously, there's the fulfilment which comes from being able to combine work and family, and then there's the general strengthening of the economy that you get when you have as many people as possible in the workforce. So, I think it is a very good announcement that we'll be making soon and it is going to enhance the quality of our society as well as the strength of our economy.

QUESTION:

In terms of the pension, why you have abandoned those changes to the pension indexation?

PRIME MINISTER:

I’m not going to comment on what is just speculation. You wouldn't expect me to comment on pre-Budget speculation, except to say that I’m absolutely determined that the measures in this Budget will be responsible and fair. That's the thing about this Budget: I am absolutely convinced that on Budget night it will be seen as responsible, measured and fair. It is a Budget which is going to deliver jobs, growth and opportunity. It's a Budget which is going to make Australians feel more optimistic and confident about their future. We are a great country. We have fundamental strengths. Yes, our economy was damaged by six years of debt and deficit under Labor and in some respects it is a long hard road back, but we are well and truly embarked on the road back. Our country is coming back. Our economy is strengthening and I think people will be more confident and optimistic on Budget night.

* Photograph of Tony Abbott found at Google Images

Another step down the path to fascism in Abbott's Australia

In Abbott’s Australia indirect government control of media and investigative journalists - through fear of arrest, trial and gaol sentence – is becoming entrenched through federal legislation.

The Guardian 27 April 2015:

Journalists who report on serious wrongdoing by Australian intelligence officers may still face prosecution under new national security laws, according to the commonwealth director of public prosecutions (CDPP).

Australia’s acting independent national security legislation monitor, Roger Gyles QC, is considering the impact of a new section inserted into the Asio Act in 2014 – section 35P – which would criminalise disclosure of information that relates to a “special intelligence operation”.

Gyles was scheduled to hold hearings on Monday as part of his inquiry into the laws, which were passed by the federal parliament with Labor’s support in 2014.

The new section has sparked concerns among news organisations, human rights groups and some opposition politicians. Journalists and whistleblowers may face jail for up to 10 years if they breach the disclosure offence.

There is no public interest consideration or defence that would allow a journalist to report on intelligence matters. But for a prosecution to be initiated by the CDPP, a public interest test must still be applied. The federal government relied in part on this check to reassure journalists who were critical of the new laws.

Unusually, the CDPP outlines two hypothetical scenarios that reporters might be placed in to consider whether it would proceed with a prosecution in a submission to Gyles’s inquiry.

In one scenario a journalist receives information about “serious wrongdoing by a commonwealth officer in the course of a special intelligence operation”. The journalist contacts Asio, which refuses to confirm or deny whether a special intelligence operation is under way, and eventually the journalist publishes the information.

While the CDPP indicates the public interest considerations would not favour a prosecution, it indicates that it might still consider the possibility.

“This scenario may well be one in which the public interest considerations either favour no prosecution taking place, or are ‘finely balanced’. As stated above the matters that will be taken into account in assessing whether or not a prosecution is in the public interest will be different in every matter,” the CDPP submission said.

The admission is likely to raise further concerns about the potential chilling effect the disclosure laws could have on the media.

ABC The Drum 17 March 2015:

The Coalition's push to save and search all of our metadata for at least two years will have a chilling effect on press freedom.

Journalists' sources will be compromised by metadata collection. Without the ability to interact with confidential sources without the government finding out, journalists may as well give the game away.

Even with the yet-unseen government amendments proposed yesterday, after negotiations with the Opposition, Australia is going in the opposite direction of our two closest allies the United States and the UK.

Requiring a warrant before searching journalists' metadata sounds like a modicum of protection. The public discussion around it indicates it will just be a "tick and flick" approach and won't give journalists or media organisations the right to argue their case.

The warrants will be obtained in secret and media organisations will be none the wiser.

Anzackery: ignorant flag wavers shouting down Australia's genuine and complex military, political and social history

Anzackery ~ n. 1. nationalistic, laudatory and distorted portrayals of Anzac history with little regard to accuracy or context;  2. hyperbolic rhetoric extolling the supposed place of Anzac in history; 3. jingoistic mythology or praise concerning Anzac exploits, usually at the derogatory expense of allied or enemy combatants; 4. shameless exploitation of Anzac commemoration and sentiment for commercial, political or authorial gain. 5. fixation on inaccurate or actual Anzac history at the expense of considering Australia’s current and future strategic security needs. [Draft definition produced by defence lobby group Australia Defence Association]

This was Australian Communications Minister Malcolm Bligh Turnbull venting on Twitter before contacting SBS management to complain about one of its sports journalists:

Unfortunately for Mr. Turnbull, uncomfortable history is not that easily airbrushed away.

This was the type of behaviour that the journalist was alluding to when he wrote about summary execution and rape in two of his five ANZAC Day tweets…..

World War Two Australian newsreel exultant admission that strafing of Japanese survivors was widespread in the Battle of the Bismarck Sea at approx.1:23 minutes and 5:23 minutes, with images of Australian airmen killing Japanese soldiers and/or sailors adrift in a small lifeboat at approx. 5:36 minutes:

https://youtu.be/azanISsx19c

For the next several days, American and Australian airmen returned to the sight of the battle, systematically prowling the seas in search of Japanese survivors. As a coup de grâce, Kenney ordered his aircrew to strafe Japanese lifeboats and rafts. He euphemistically called these missions "mopping up" operations. A March 20, 1943, secret report proudly proclaimed, "The slaughter continued till nightfall. If any survivors were permitted to slip by our strafing aircraft, they were a minimum of 30 miles from land, in water thickly infested by man-eating sharks." Time after time, aircrew reported messages similar to the following: "Sighted, barge consisting of 200 survivors. Have finished attack. No survivors." [http://www.historynet.com/battle-of-the-bismarck-sea.htm#sthash.WYKrkJGC.dpuf]

The killing of unarmed, sleeping, sick or wounded Japanese was common. Although official pressure was put on troops to take prisoners, the Australian front-line soldiers - like their American counterparts - had little desire to do so. [Australian War Memorial, 2015, symposium document]

[Extract from the war diary of Australian Second AIF soldier Eddie Allan Stanton in Richard J. Aldrich,  2014, The Faraway War: Personal Diaries Of The Second World War In Asia And The Pacific]

I stood beside a bed in hospital. On it lay a girl, unconscious, her long, black hair in wild tumult on the pillow. A doctor and two nurses were working to revive her. An hour before she had been raped by twenty soldiers. We found her where they had left her, on a piece of waste land. The hospital was in Hiroshima. The girl was Japanese. The soldiers were Australians. The moaning and wailing had ceased and she was quiet now. The tortured tension on her face had slipped away, and the soft brown skin was smooth and unwrinkled, stained with tears like the face of a child that has cried herself to sleep…..

This was the first time it happened. But since then I had become a monotonously regular visitor to the hospital, always bringing with me a victim of the Yabanjin  - the barbarians – as they began to call the Australians.   [Extract from the memoirs of former Australian interpreter & Second AIF soldier with the British Commonwealth Occupation Force (BCOF) in Japan, Allan Stephen Clifton writing as Carter, 1950, Time of Fallen Blossoms, p 86]

Ending of the Preface to Time of Fallen Blossoms

Royal Commission warns woman Tony Abbott called "honest", "credible" and "heroic" that she may have to be examined further over alleged wrongdoing

Back in 2012 Australian Prime Minister (then Coalition Opposition Leader) Tony Abbott described then Secretary of the Health Services Union, Kathy Jackson, as honest, credible and heroic because her war with political adversaries was embarrassing the Labor Party.

Since then widespread allegations of fraud and theft have surfaced in relation to Ms. Jackson, as well as reports of other unusual financial arrangements.

So it is no wonder that The Australian reported on 27 April 2015 that:

Royal commissioner Dyson Heydon QC has warned his inquiry is far from finished with Kathy Jackson, saying she will have to demonstrate strong ­reasons why her tenure at the Health Services Union should not be examined further.

Reopening the royal commission investigating trade union governance and corruption yesterday, Mr Heydon said he was not convinced by arguments that he should refrain from making findings about the former HSU ­nat­ional secretary while the union pursued her in civil proceedings. The union’s new leadership has also referred allegations against her to Victoria Police.

“It must be stressed that the ­issues affecting Ms Jackson should be dealt with, unless good cause is shown for a contrary course,” Mr Heydon said.

“The desirability of dealing with some or all of the issues ­affecting Ms Jackson is something to be considered later this year. It may be necessary to debate the matter, for the submissions of Ms Jackson’s solicitor ­opposed that course.”

Jeremy Stoljar SC, counsel ­assisting the royal commission, last year recommended criminal charges against Ms Jackson for submitting a “false claim” when she negotiated a $250,000 payment from Melbourne’s Peter MacCallum Cancer Centre for the HSU after a dispute over workers’ back pay, but Mr Heydon held off making findings about this in his interim report.

He said yesterday that it was more convenient to deal with ­issues surrounding Ms Jackson’s conduct in one go in his final ­report, rather than separating them too soon.

The HSU’s case against Ms Jackson is due to be heard in the Federal Court in June…….

Now I've heard everything! Liberal MP blames Labor for his own party's continuing refusal to support same-sex marriage

Just when I thought the Liberal Party of Australia couldn’t possibly take its lack of responsibility for its own political actions to an even more bizarre level, The Sydney Morning Herald on 27 April 2015 published a bizarre claim by one Liberal MP that Prime Minister Tony Abbott’s refusal to allow members of the parliamentary Liberal Party a conscience vote on any bill relating to same-sex marriage is actually all the fault of the dastardly Australian Labor Party:

Deputy Labor leader Tanya Plibersek has "wrecked" progress within the Liberal Party towards a conscience vote on same-sex marriage, the Liberal Party's first openly gay federal parliamentarian says.

Dean Smith - a conservative senator from WA who recently revealed he now supports same-sex marriage - said he felt "personally disappointed" by Ms Plibersek's decision to push for a binding Labor vote on the issue at the party's national conference in July.

"If the ALP was to adopt a binding vote on same-sex marriage then the issue of a conscience vote in the Liberal Party is dead," Senator Smith told Fairfax Media.

"Conservatives who oppose same-sex marriage and a conscience vote will be sitting pretty. Tanya Plibersek will be the first line in their argument.

"This has put the cause back and she needs to explain herself to same-sex marriage proponents.

"There has been a slow and cautious approach to achieving a conscience vote and she has wrecked that."

Senator Smith said he suspected Ms Plibersek's position was more about internal Labor politics than advancing the cause of same-sex marriage. 

Labor's platform currently supports same-sex marriage but does not make it compulsory for Labor MPs to support it in a parliamentary vote. Opposition Leader Bill Shorten is on the record as a supporter of a conscience vote on the issue. 

The fact that Labor has allowed its parliamentarians a conscience vote has been one of the primary arguments of those lobbying for the Liberal Party to overturn its binding opposition to gay marriage.

Liberal politicians have traditionally prided themselves as having more freedom to vote according to their conscience than Labor politicians, who risk expulsion from the party for crossing the floor.

"I have always been distrustful of the Left on this issue and now my personal fears have been realised," Senator Smith said. 

A spokesman said Ms Plibersek would not comment on internal Liberal Party issues. Earlier she said Labor should adopt a binding vote on the issue because same-sex marriage is an issue of legal discrimination, not conscience……

We'll see what NSW National Party MPs are made of as a party member pushes for Megasco to commence drilling for tight gas on one of his farms

Northern Rivers communities and Bentley in particular need to keep a sharp eye on National Party MPs, particularly those with electorates on the North Coast, as it appears that former Lismore City councillor National Party member Peter Graham may be trying to play the political mates card in order to activate the terms of his access agreement with coal seam & tight gas miner Metgasco Limited.

Echo Netdaily 27 April 2015:

A Bentley landowner is hoping the state government will support any moves by gas mining company Metgasco to begin exploring for gas on his property.

Farmer Peter Graham, a former Lismore city councillor, signed an access agreement with Metgasco in January 2012, which covered his family’s land at Bentley.

Before any drilling could take place, thousands of protestors set up camp on land adjacent to the Graham’s property, vowing to stop any drill rigs from entering.

With reports of up 800 police set to ‘break’ the Bentley blockade, the state government announced that it was suspending Metgasco’s drilling license.

Last week, however, the NSW Supreme Court overturned that decision, describing it as unlawful.

Now Mr Graham wants Metgasco to get on with the job, arguing NSW Premier Mike Baird was supportive of the industry.

‘Throughout the state election both Labor and the Greens were saying that Mike Baird was supportive so I assume that support is still there,” Mr Graham told ABC radio.

He rejected claims that there was no gas shortage, saying NSW was buying gas from Queensland instead of developing a local industry.

Mr Graham said he was concerned that local Federal National MP Kevin Hogan and state National MP Chris Galaptis had spoken out against the industry.

‘It does concern me and I have to talk to my National Party friends.

‘I need to sit down and talk with them, and the industry needs to sit down and talk with them,’ he said......