@lindseym1013 Div 293 was introduced over 10 years ago unindexed, and not only has the nominal threshhold not gone up since then, it's actually gone down. There's no knowing what future governments will do, so all we have at the moment is the current policy, which is that they deliberately do not want it indexed, and have not announced any intention for it to change in the future. If they wanted it indexed, they could have simply indexed it to the 1.9m balance transfer cap.
You can also run a calculation for someone making $80K at 25, would still hit 3M using historical inflation and historical returns, with only mandatory contributions at current levels and wages only tracking inflation (in reality most people people get promotions and career wage increases far outstrip inflation - so actually even those earning considerably less can probably hit the cap with decent returns and decent career progression) .
@resjudicata Div 293 was introduced in 2012 with a 300K threshhold. What is your prediction for when the threshold will be raised above 300K? (It's currently 11 years later and has been lowered to 250K, and there has been no talk of raising it, although there have been suggestions of lowering it further).
Regardless, there is already a super threshold indexed to inflation (the balance transfer cap). It would have been very easy to index this threshold as well, if the goal was for it to only affect the very wealthy. Since they chose not to, that is clearly not the actual goal. The general trend for governments of both parties over the past couple of decades has been to increase taxes on super.
@veranup At launch less than 1% of people will be effected by the 15% extra tax for balance over $3 million. So I would guess theyll probably let it ride for a long long time maybe until it starts to effect say the top 10% of people would feel right then begin indexxing.
Bringing it in at $3 million was a very "soft" starting point giving people fair time and warning to react. They will let it go at this level for many years maybe decades until it really starts grabbing very solid tax dollars from the top end of town. Australians were really pleased to see this change which stopped the rorting of the super system from a wealthy minority. If anything I reckon well see that tax rate bumped up even higher in the future.
Now of course these people are a very vocal and very greedy minority so we can safely ignore all their whinging.
Gotta remember superannuation was a tax scheme created to support people to self fund a modest retirement and not require a pension.
It is NOT and never WAS a scheme to help wealthy people reduce tax or support luxurious retirements and inheritances to family.
Seriously in 30 years time (and even not too soon), 3mill is not going to be "wealthy status" that's just more of a "nice retirement status" it's not just black and white.
But with this policy it's more like "you can't have nice things in your retirement" and for that you'll pay extra taxes.
I mean, if it was truely for "accumulation of wealth by the wealthy" then that 3mill should really be a 10mill threshold. Then you're clearly out of the "nice retirement" and into the "true wealth status" level.
I read what you said, so in the new age society you aren't allowed (as you said it's preventative action) to be wealthy, yeah I got it... nice dystopian world you want...
@angelh0809 You can’t be so dense and then demand to be treated like an adult. Since you’re so disadvantaged by you natural abilities I’ll be simpler for you.
What everyone with half a brain gets is that anything to do with super, only impacts super. People with half a brain don’t need to be told that the $3M threshold is to prevent wealth accumulation WITHIN SUPER. People with half a brain don’t need that spelt out becuase they aren’t dumb enough to think that a mechanism tied to super exists out of super
So for dumb dumbs
The $3M is to prevent wealth accumulation INSIDE SUPER. Because super is not supposed to be for wealth accumulation.
If you want to accumulate wealth outside, go for your life. The $3M threshold has zero impact on you doing so. Only a complete moron would think that a super mechanism extends out of super. Thoughts and prayers for those they do.
@lindseym1013 Agree - property leased to member’s business is usually the way. I work with SMSF’s. One younger (mid 30s) client couple bought a poor condition farm block for sub 400k under 5 years ago from a desperate seller, recently sold for $1.5m+ after leasing it to themselves for a few years and fixing the soil situation. Just bought another farm for 1.5m+ intending to do the same turnover on it. That couple will easily clear the 3m cap without making any further contributions.
The other common way to quickly explode up to that kind of figure is CGT retirement exemption / active asset contributions.
@kodybricen The cap stops non concessional contributions from being made once reaches 1.9m concessional contributions upto the cap (currently $27.5k) are still allowed and the cap doesn’t include investment earnings
FYI, the cap was only introduced in 2017 prior to that the concessional cap was 35k and non was 180k
Keep in mind most people with balances in excess of 3m today are more then likely been working for 40+ years and more then likely in a defined benefit which was a lot more generous.
@angelh0809 It's not a new tax... it's a removal of a subsidy for those that don't need it. $2m is enough for retirement, there is no justification for subsidies over that amount
