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Joe Hockey is the new Super Nazi

07/03/2015


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Joe Hockey is floating the idea that you can dip into your super to help you buy a house. Sound’s like a good idea doesn’t it people? Lets test that. Superannuation contributions are taken out at 9% of your current salary. So if you have been working for 10 years and are on an average salary of $45k a year, you would have access to a whole $40k! Sounds good huh? Except when you look at the cost of houses. The median cost of a house in Sydney is now $1million dollars. That 40k from super will sure go a long way huh?
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And there are other little problems in the Hockey version of reality. Problems he and his party created. Problem one is people on $45k pay more tax on their contribution to super than in income taxes. Further, those who contribute millions into super, pay a smaller percentage of tax than people on low wages. Another new Hockey initiative were you subsidise the rich and abuse the poor for not being rich.
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But lets say you are on more than $45,000 a year. That you went to uni and are now on the average wage of $66,000. And of course, all that uni training means you have a loan to pay off. Your loan maybe somewhere close to $100,000 dollars. Some say less. Some say more. But either way, before you earned a cent in superannuation, you have a considerable loan to service if the coalition have their way. So out of your $66,000 a year salary, $6500 (or nearabouts) is going into Super. After 10 years you have a whole $65,000 or around there in your super. And house prices still are around $1 million dollars.
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To even collate enough for a 10% deposit for a loan out of your super (or around $100k), and you are on a salary of $45,000 a year, you would need to work for twenty years before you had enough in super. If you are on a salary of $100,000 a year, you will need only 10 years, but this assumes you have already paid off your student loan.
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So thats people getting their first home in their 40s for those below the average wage and mid thirties for those who earn above the average wage. But is this what Hockey really means? That first home owners buy their home out of THEIR super. Or does he mean that first home buyers can buy their home out of their PARENTS super. Because even after contributing for 32 years into a super fund, based on a wage of $46,000 a year, you would have somewhere between $300k and 370k (depending on your super fund fees). And even after 32 years of working, your super amount only covers around 40% of the cost of a median priced home in Sydney.
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Now there ARE houses on the market that are well below the median Sydney price of $1 million in Sydney. But you have to go out a fair distance. Still, it is possible to get a cheaper home, but it comes with less services and more travel time.
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Lets face the real message here. The coalition HATE super for those on low incomes. They hate it because it means employers have to ‘suffer’. The whole purpose of taxing low income workers’ super higher than income tax for same low income people is to have those people reduce superannuation contributions to the bare minimum. And like in the Seinfeld episode, Joe Hockey’s super kitchen does not come with bread for all. Just the very few that they like.
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The coalition have ALWAYS had their eyes on peoples superannuation. They hate the idea of poor people getting ahead through savings. They hate the indigenous. They hate the poor. They hate pensioners. They hate students. And they hate super. Luckily in less than 18 months, we get to shake them off the political landscape.
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A. Ghebranious March 2015

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