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There’s a hole Dear Liza, Liza a hole

03/09/2014


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The coalition argument that people will have their super money in their pocket is false.
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Money that goes into your superannuation account is taxed at a different rate than your wages are. Super has a concessionary tax rate of 15% on the the contribution. Instead, it will now be subjected to your marginal tax rate at more like 30% for the average wage.
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So for every $1000 that would have gone into your super as $850 after tax is now $700 in your pocket. More if your marginal rate is closer to 50%. The coalition now say the decision is yours. If you wish to contribute to your super yourself, you can.
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So lets do that. We now take the $700 (the amount that we have in our pocket now) and put it into super. As we do, we pay 15% contribution tax. $700 then becomes a contribution of $595. A loss to the worker of $255 from that $850 that would have gone in at the 15% tax rate rather than taxed as a wage.
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When the coalition say this is great news for workers, they are trying to spin you round like a record.
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[Correction. I have been advised that after tax super contributions are not taxed 15% (up to allowed limits). So the $700 would be fully added into super. But it is still $150 less than if contributed before tax. I also do not mention the $500 govt contribution to low income workers who will lose this from 2017 for the rest of their working life.]


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A Ghebranious August 2014

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From → Politics

One Comment
  1. Florence nee Fedup permalink

    When we lose our jobs, he is liberating us. Now he is freeing us of the need for a decent retirement He is giving us freedom to spend as we wish, that is after he takes a bigger tax grab. Of course, the boss does mot have to give us a rise, NO money to spend.

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