retirement-age-raised-to-70

Retirement age raised to 70

Estate Planning, Wills and Estate Planning
https://www.genders.com.au/retirement-age-raised-to-70/

For a long time the official retirement age in Australia was 65 for men and 60 for women.

This was gradually changed to be 65 for everyone. Then the Labor Government increased it to 67 and in April 2014 the Federal Liberal Treasurer Joe Hockey announced the Government’s intention to increase the age of eligibility for the aged pension to 70.

The rationale behind this is that we are living longer on average, and the social security system cannot sustain the current level of payments for a longer period, especially with relatively fewer Australians remaining in the workforce.

Capping or removal of CGT exemption on family home

Capping or removal of CGT exemption on family home

Estate Planning, Wills and Estate Planning
Capping or removal of CGT exemption on family home

At present, the family home (principal place of private residence) is exempt from Capital Gains Tax.  Some analysts have suggested that this concession is skewed towards the wealthiest in the community, and there is a push to remove this exemption for the most expensive residential properties.

In 2009 a report by the Brotherhood of St. Laurence and the Australian Housing and Urban Research Institute claimed this CGT exemption is worth on average $10,000 a year for the wealthiest 20 per cent of home owners, but worth just $1200 a year for the bottom 20 per cent of households.  The suggestion is that it is unfair that those on the highest incomes are getting much more benefit than anyone else.

Increased tax on Super contributions

Increased tax on Super contributions

Estate Planning, Wills and Estate Planning
Increased tax on Super contributions

During its last term in office, the Federal Labor party introduced a superannuation charge for people earning more than $300,000 annually, taxing these people’s contributions at 30 per cent, while everyone else pays 15 per cent on contributions.

In April 2015 the Federal Opposition (Labor’s Bill Shorten) proposed to lower the threshold to double the superannuation tax on contributions to 30% for many Australians to raise more than $5 billion over a decade.

Increased Super Guarantee Charge

Increased Super Guarantee Charge

Estate Planning, Wills and Estate Planning
Increased Super Guarantee Charge

In 1986, 3 per cent superannuation was awarded by the then Conciliation and Arbitration Commission as part of a productivity and wage package. Over time that increased progressively. For a long time it was stuck at 9%. It is currently 9.5% in 2015–16, and incremental increases are legislated each subsequent year to get to 12% in 2019–20.

In the 1995-96 Budget, the then Treasurer outlined the Keating Government’s proposal to further increase superannuation contributions to 15 per cent.

In this “immediate gratification” society, it doesn’t take much imagination to see that governments don’t trust individuals to behave in a way that gives them sufficient savings for their own needs later in life. This obviously has consequences for the public purse, necessitating subsidisation by the state (at taxpayers’ expense). For governments, mandatory savings schemes like Super are also a mechanism to shift reliance on future tax-payer funded pensions to private savings.

Death duty or inheritance tax reintroduced

Death duty or inheritance tax reintroduced

Estate Planning, Wills and Estate Planning
Death duty or inheritance tax reintroduced

On 15 October 2009 the most senior tax-policy advisor to the Australian Federal Government, Dr Ken Henry (Chair – Australia’s Future Tax System Review Panel and Secretary to the Treasury) gave an Address to the Committee for Economic Development of Australia.

In that address he identified 6 areas of future opportunities and challenges governments will need to address in respect to taxation. At the very top of his list was: “the ageing of the population, posing challenges for the financing of retirement incomes and of increasing health and aged care needs”.

Dr Henry said that taxes levied on broader bases would be more efficient policy tools, probably more equitable and certainly more transparent ways of raising revenue. Without such tools, governments would otherwise be compelled to continue to rely on bad taxes to achieve their spending objectives.