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Welcome to Firstlinks Edition 529 with weekend update

  •   5 October 2023
  • 22

The Weekend Edition includes a market update plus Morningstar adds links to two additional articles.

Among many behavioural tendencies that impair decisions is confirmation bias, where we interpret and look for information that is consistent with our preferences or beliefs. It may prevent opposing views entering deliberations. A property fund manager will find data which shows rentals rising and high occupancy rates. A fixed interest bond manager will read commentary to justify lower interest rates and falling defaults. A private equity manager will point to the volatility of listed equities and better values of private assets. And so on.

The theory is that there are three types of confirmation bias: selective search, selective interpretation and selective recall. Politicians use all three, as well as simply choosing facts to suit an argument. Treasurer Jim Chalmers is finding data points to justify the new tax on super balances over $3 million that are irrelevant to that threshold. This week, Chalmers introduced a short consultation period on the Exposure Draft.

In announcing the legislation, Chalmers previously said:

"The average superannuation balance is about $150,000 and the few people with balances above $3 million hold an average of almost $6 million in their accounts. As the Prime Minister said, 17 people have gotten over $100 million and one person's got over $400 million. And think about this example: a $100 million fund earning a 5% return receives a tax break upwards of one and a half million dollars a year compared to a return outside of superannuation taxed at the marginal rate. So it takes 100 average wage earners paying the average amount of tax to pay the tax break for that single super account every year."

Let's consider the selective bias in this statement:

1. The new tax is on balances over $3 million so quoting the impact of a few people over $100 million and one over $400 million is hyperbole. 

2. Measuring the impact against marginal tax rates disregards how people will respond. They will not withdraw from super to pay tax at 45%. They will either leave money in super and pay the extra 15% tax or use another investment structure such as a company, or even buy a bigger home and pay no tax.

3. The '17 people hold over $100 million' is a great headline but for all the effort and compliance work involved, the tax will raise only $2 billion a year, even assuming no change in behaviour. It's hardly meaningful tax reform although the Treasurer likes to call it that. In the Tax Expenditure & Insights Statement, Capital Gains Tax (CGT) exemptions total $72 billion and the family home exemption alone is worth $48 billion. Where are the stories about people with homes worth over $10 million making tax-free capital gains? No way, sacred cow.

4. Chalmers is ignoring the main objection to the tax. It is not so much the amount but the way it imposed, taxing unrealised capital gains. Most people in the industry accept the need to cap super benefits but this calculation method is a radical departure from normal tax policy and introduces anomalies.


Misinformation comes in many forms. There is so much misleading information in the media that it's difficult to know what to believe, as we cannot be expert in most subjects. As Morgan Housel wrote recently:

"Most fields have only a few laws. Lots of theories, hunches, observations, ideas, trends, and rules. But laws – things that are always true, all the time – are rare ... The strongest-held beliefs are usually on topics with the most uncertainty. No one is as passionate about geometry as they are about religion."

Australia's Department of Home Affairs has established a 'Strengthening Democracy Taskforce' because, they say, our democracy is a national asset that should be protected.

"Democracies around the world are under threat from a range of anti-democratising forces, including foreign interference, rising disinformation and discord online, populism and polarisation, and declining reserves of public trust."

General Angus Campbell, Chief of the Australian Defence Force, recently told the Australian Strategic Policy Institute that:

“This tech future may accelerate truth decay, greatly challenging the quality of what we call public ‘common sense’, seriously damaging public confidence in elected officials and undermining the trust that binds us.”

Social media platforms X (formerly Twitter) and Facebook are withdrawing from news content and focussing more on entertainment and viral trends. The chart below shows how traffic referrals to news sites have slumped. It compromises the ability of voters to receive accurate information as fewer people can source reliable news on social media platforms.   

Consider a social issue regularly in the news, the problem of rising inequality, and some recently-released charts on Australia. Most people accept that rich people should pay proportionally more tax than poor people, but what's the right level? The Australian Taxation Office reports:

* At the bottom end, 43.8% of adults pay 3.2% of net tax.

* At the top end, 11.7% of adults pay 55.3% of net tax, of which 4.1% pay 35.4%.

If asked the question, how much of net tax should the Top 10% of income earnings pay, how many people would say much more than 50%?

So that's one picture of tax addressing inequality.

Then last week, the Australian Council of Social Service (ACOSS) and University of NSW, as part of its Poverty and Inequality Partnership, produced an Inequality in Australia 2023 Overview. It paints a picture less of the wealthy supporting the poor but more like a country where the rich get richer.

"Australia’s wealth gap has continued to grow over the past two decades, with superannuation and property investment driving inequality across the country."

Here are three slides from the Report.

First, the share of all wealth held by each wealth group divided into quintiles. The top 20% holds 64% of wealth, while the bottom 40% holds about 6%.

Second, the two largest components of household wealth are own home (net of mortgage) at 38% and superannuation (22%). Australia is a country where home ownership and superannuation primarily determines where someone stands in the wealth stakes.

Third, between 1999 and 2019, the wealthiest 5% experienced the largest percentage increases in after-tax income, despite what the ATO tax tables show. But the lowest 40% increased their after-tax income by the same percentage as the highest 20%, and it is in the middle tiers - from 41% to 80% - that have experienced the smallest increases.

As the ACOSS/UNSW Report says,

"Since wealth begets more wealth, wealth inequality rises more persistently than inequality of income."

My overall conclusion from the Report is that inequality increases when asset prices rise fastest, and with most wealth in houses and super, inequality rose in the period to 2007 before the GFC, and probably since 2019 with equity and property markets doing well. Our surging property market and strong jobs markets are the main reasons Australians in general are among the wealthiest people in the world. For the main part, whether Australia looks like it is moving to become a more or less egalitarian society reflects market values of assets.

Over the long term, expect superannuation and residential property to perform well and become more of a target for governments seeking to address budget deficits and inequality. Confirmation bias will continue to justify policy decisions.

This week, David Knox runs the numbers on whether government revenues are worse due to superannuation benefits, or do the savings in the Age Pension justify the tax breaks. We can be sure we have not seen the end of superannuation changes even if Treasurer Chalmers says the $3 million tax is the only one for this term of government.


Which all makes the Stage 3 tax cuts an even bigger political issue, although discussion has dropped away in recent months. They are legislated to begin on 1 July 2024, now only nine months away, and taxpayers in the $45,000 to $200,000 bracket will pay a marginal tax rate of 30%. Economist Chris Richardson estimates they are the economic equivalent of three interest rate cuts, suggesting this will temper any official reductions in cash rates. The best guess from here is a cash rate at around the current level for at least 18 months.

ASX 30 Day Interbank Cash Rate Futures Implied Yield Curve (as at 28 Sept 2023)

There has been a change in market sentiment in the last month or so, now believing inflation will remain elevated with the robust economy preventing rate falls. Oil prices are higher than expected and the new Reserve Bank Governor, Michele Bullock, is already warning about further rate increases.

The S&P/ASX200 is close to a one-year low and bond yields are at a 10-year high as we move into the last quarter of calendar 2023. September 2023 gave away earlier modest gains in Australia and the index is down another 2.5% in October to date. If you feel your portfolio has gone nowhere, combined with losses in bond funds, you're not alone. Those with more US exposure, especially to tech, have done better, but have also given some back recently. 

(Chart source, OwenAnalytics) 

The challenge for investors is realising that every year, regardless of how well they perform overall, stockmarkets have a solid drawdown (market loss) at some stage of the year, as shown below for the S&P500 index. If there is a company that an investor wants to own, this period can deliver a cheaper opportunity.

For those seeking the safety of long bonds, watch out for duration risk. The rise in interest rates now means that the Vanguard Extended Duration Treasury ETF in the US has now experienced a larger drawdown than the S&P500 index during the GFC. 

Source: Jack Farley


The ATO has issued a special notice to taxpayers about CGT on rental property, shares and crypto assets, saying they are seeing many mistakes in tax returns, including using a family home for income. Assistant Commissioner Tim Loh said the ATO receives reports on over 600 million transactions a year, including from property titles offices, revenue agencies, exchanges and share registries. He said:

"Generally, your main residence (your home) is exempt from CGT, but if you’ve used it to produce income, such as renting out all or part of it, including through the sharing economy, like through Airbnb or Stayz, or running a business from home, then you may have to pay CGT ... If you think you can slide under the radar and avoid reporting a capital gain, think again."


In my article this week, I look at how SMSF trustees invest based on three different data sources, then dive deeper into the most popular listed companies, managed funds and ETFs used by SMSFs. There remains a local bias, as most trustees make their own investment decisions based on what they know and understand.

Graham Hand

Also in this week's edition...

Bonds look set for their third straight year of losses, something that hasn't happened over the last 100 years. James Gruber analyses what's behind the carnage in bond markets and asks whether this is the start of a generational bond bear market

More Australians are investing overseas and recent data suggests many are choosing to hedge their international exposure. Vanguard's Duncan Burns investigates whether hedging is worth the cost, and if so, which investors it may suit best. 

Another episode of the Wealth of Experience podcast is out and this week features special guest, personal finance guru Noel Whittaker. Noel offers his key tips for making the most of your retirement. He discusses the mistakes that people make with SMSFs, why super remains a good vehicle for retirees, how estate planning is a 'minefield', and the financial traps to avoid with aged care. Graham looks at LICs and Peter checks in on bonds.

Fidelity's James Abela compares mid-cap stocks to a middle child: both tend to be overlooked and underappreciated. He explains why mid caps offer potentially more growth than large caps and less risk and volatility than small and micro-caps. 

Clime's Will Riggall says while bond yields are more attractive than they were a year or two ago, they're still not high enough to compensate for the risks of persistent inflation. Will suggests equities offer the best prospects for income oriented investors.

Two extra articles from Morningstar for the weekend. An ASX stock is added to the global best ideas list, while Jon Mills raises coal stock fair values due to increased coal price forecasts.

Lastly, in this week's White Paper, Franklin Templeton explains why it no longer expects a technical recession in the US and that central banks will keep interest rates higher for longer. 


Weekend market update

On Friday in the US, stocks shook off early losses finishing higher after investors digested the latest jobs report. The Nasdaq was up 1.6%, while the S&P 500 added 1.2% and he Dow rose 0.9%. The 10-year Treasury yield surpassed its highest level of the year, surging  to 4.858% after the jobs report, the highest since July 2007, before settling at 4.783%. Brent crude oil fell again, by 0.6% to US$84.58 a barrel. 

From AAP Netdesk:

The local share market on Friday finished higher ahead of the US jobs report.
The benchmark S&P/ASX200 index closed up 28.7 points, or 0.41%, to 6,954.2, while the broader All Ordinaries added 25.5 points, or 0.36%, to 7,143.0.

For the week the ASX200 fell 1.3% in its third straight week of losses. It's also down 1.2% for the year after closing at an 11-month low on Wednesday, and 6.9 per cent from its highs of late July.

On Friday the ASX's 11 official sectors closed mixed, with four higher and seven lower.

The financial sector was the biggest mover, gaining 1.2% as all the Big Four banks finished in the green. Westpac added 2.1% to $21.44, NAB rose 1.5% to $28.94, CBA gained 1.1% to $100.04 and ANZ added 0.9% to $25.32.

But Magellan Financial Group was the worst loser in the ASX200, plunging 18.5% to a decade low of $7.69 after the investment manager disclosed it experienced net outflows in September of $2 billion.

GQG Partners in contrast rose 3% to $1.36 after reporting its funds under management grew $US1.8 billion in the September quarter, to US$105.8 billion.

In the heavyweight mining sector, Rio Tinto added 1.1% to $113.19, BHP climbed 1.2% to $43.97 and Fortescue Metals gained 1.4% to $21.06.

Lithium miners Allkem and Pilbara fell to six-month lows - dropping 2.9% to $10.69 and 0.8% to $3.91, respectively - amid a drop in demand for the battery metal on the back of the US autoworkers strike. Nickel, copper and lithium miner IGO fell 4.4% to a more than one-year low of $11.06.

From Shane Oliver, AMP:

  • Global share markets were mixed over the last week. US shares initially fell as higher bond yields continued to pressure valuations not helped by political uncertainty with the replacement of the House Speaker, but then rebounded from technical support on Friday helped by a “goldilocks” (not too strong, not too weak) interpretation of the latest jobs data. This saw US shares rise 0.5% for the week. Eurozone shares fell 1.2% for the week and Japanese shares fell 2.7%. The poor global lead saw Australian shares remain under pressure despite the RBA leaving interest rates on hold with the ASX 200 falling 1.3% for the week. From their July highs to their recent lows US & Australian shares have had a fall of around 8%. Bond yields rose further. Oil prices fell sharply on concerns about slowing demand and metal and iron ore prices also fell. The $A fell, reaching an 11-month low, with the $US flat.
  • We continue to see the RBA leaving rates on hold ahead of rate cuts next year, but with a 40% chance of a final rate hike by year end. As widely expected, the RBA left rates on hold following its latest board meeting with new Governor Michele Bullock making little change to the post meeting statement. With inflation still high the RBA understandably retained a tightening bias indicating that the risk of a further increase in interest rates remains high and poor productivity, signs of a pickup in wages growth, the rise in petrol prices and the fall in the $A reinforce this. So we are allowing for a 40% chance of another hike with the November meeting (after quarterly CPI data and revised RBA forecasts) and the December meeting (after quarterly wages data) being the ones to watch. However, if as we expect the economy continues to weaken as past rate hikes increasingly bite this will maintain downwards pressure on inflation heading off any further rate hikes and ultimately allowing the RBA to cut rates next year, starting around June.
  • But won’t the rise in petrol prices and the fall in the $A force the RBA to hike? While both may concern the RBA its more complicated than commonly thought. First, the rise in petrol prices is occurring against a very different background than was the case 18 months ago. Then many commodities and prices were up with supply shortfalls, people wore it as they were happy to be free from lockdowns and monetary policy was easy. Now many other commodity prices are down, goods prices have generally weakened, reopening euphoria has long faded and monetary policy is tight which has hit households. So, while higher petrol prices add directly to inflation the flow on will be limited or negative as its more likely to act as a tax on spending. Second, in relation to the fall in the $A it hasn’t fallen enough yet to be a major problem, the pass through of changes in the $A to consumer prices has not been as strong in recent times and while the lower $A partly reflects Australian rates being below those in the US it also reflects “risk off” sentiment amongst global investors and is a sign of concern about the outlook for commodity prices and global growth which is potentially deflationary, not inflationary. So the RBA shouldn’t be rushing into another rate hike just because of higher petrol prices and the lower $A.

Curated by James Gruber and Leisa Bell

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Manoj Abichandani
October 09, 2023

It is easier to build wealth outside of super than in super for the simple reason that borrowing in super is limited to purchase new assets whereas outside super you can use existing assets as equity.

Reaching $3 M in super is an achievement and members should be congratulated and given medals as they will never be dependant on future taxpayers

15 years back when last of the baby boomers were 45 years old were told by Costello to move a million in super as after 60 years all income on it will be tax free

Many of us sold investment property outside of super to contribute into super and purchased property - lucky for us that these properties doubled and we contributed concessional to reduce our LRB.

It took us 15 years to plan for our future - we saved because all wealth accumulation books told us about fun of delayed gratification

Previous guy broke 2/3rd of Costello’s promise by bringing in TBC in 2017. If average balance above $3 M is $6M - about 33% ($1.9M) is only tax free

I think it is only fair that they give us 15 years and bless us to enjoy our delayed gratification. After we are 75 years old - frankly, nobody will care, if still alive

Hence my submission to Chalmers would be (on behalf of 80,000 of us) is to honour a promise made by your predecessors and take the extra tax from members who have $3 M who are over 75 years old

We have age based contribution rules, it will be not difficult to link age of the member in Div296 Tax

This new rule of over $3 M can be for all members going forward and not for those who have been planning it for the last 15 years

Remember we all 80,000 have enough time and can all gang up and be at every polling booth in the next election - those interested in joining my “No Div 296” political party - find me

Alex Dalley
October 09, 2023

I agree with Mark Hayden, dont get caught up on the cap amount.

Be it 3mio or 2mio or 4 mio, it doesn't matter. As the wealth inequality data shows, earnings on even a 2 mio balance would be more than the majority of Australians can expect to comfortably live off.

I am much more concerned about the lack of debate around the *non-indexation* of the cap. Contrary to June's point I dont think you covered this explicitly Graham.

It sounds like a lot now, but 3mio will not be worth much in 60 years when my daughter retires. And in 90 years when my grandchildren retire ?! Even assuming 2% inflation, the risk free earnings on 3 million balance in 60 years will basically be a minimum wage, if that.

This small change means that this generous pension system will not be inherited by our grandchildren.

This further perpetuates intergenerational inequality. Lets not even start on the mitigation costs of climate change or the missed opportunity of building a decent sovereign wealth fund using mining boom super profits.

October 08, 2023

?I don’t get all the angst about the additional 15% taxation of earnings including unrealised gains for that component of super balances above $3m. If the govt had instead just put a hard cap on super of $3m would people be screaming as much as they are? (Or would the inevitable screaming be justified?)

But a hard cap would be too difficult administratively so they opted for this “soft cap” mechanism. The govt wanted to make super above $3m relatively unattractive (plus raise some revenue) and have achieved their objectives with this proposal.

As for the view that this tax on unrealised again is unprecedented and the beginning of taxation of unrealised gains in other areas I will wait until there is any evidence of this. (And in selected areas - say those with multiple investment properties - it might not be a bad thing for helping to improve housing affordability).

This will clearly be a problem for SMSFs with portfolios of concentrated or levered exposure to illiquid, often associated, assets. Some question whether this was ever a sensible way to invest for retirement and those impacted still have several years to restructure portfolios for more flexibility.

I do agree that the lack of indexation will be a real issue in future years especially for younger people making commitments to super today. No indexation smells that the govt wanted a lower cap (say in line with the $1.9m pension TBC) but did not have the courage to announce it now.

October 08, 2023

I don't know why so many boomers (those born between 1946 and 1964) are getting upset about the new $3m; the oldest would be hitting 60 next year and so will be drawing down on their accounts, plus the majority will not have anywhere near $3m in their super account (we always hear about how super was brought in too late for them to enjoy), will never get near that figure and will also likely not be subject to the tax, thanks to the grandfathering provisions that - let's be honest - will likely come in (any Government not doing so and seeking re-election would be political suicide, given the numbers of boomers overall, versus those of other generations, that also don't care about super). Super was always about boomers, by boomers, for boomers, and this is just them - as the politicians - pulling the proverbial ladder up after they have climbed it.

It will only affect Gen X and everyone else after them. Why the faux outrage ? Boomers won't care about those following them and this tax is clear evidence of that. The Government of the present day will be long gone and waiting a LONG time before any incoming one gets their hands on anyone's $3m+, so it's all about penalising those who follow as Gen X, Y and Z, not the 'here and now'.

Former Treasury policy maker
October 08, 2023

Well Chris, this particular boomer (who is older than 60 so get your maths right) isn't so much complaining about there being an extra tax on a balance above $3 mn but on the very poor policy that is going to implement the new tax. Plenty has been written about the taxation of unrealised gains and how that will play out unfairly - eg if you have an investment that has dropped in value in the untaxed environment, but now recovers you'll be paying tax on it even if it's not yet back to where you bought it. That stinks from just about every angle when Tax Policy 1.01 unit on Good Tax Policy is studied. And there are more.

Other boomers might be arguing differently, but if you read carefully most of them are concerned about the inequity and clunkiness of the way this is going to be implemented, rather than the existence of a new progressive step in the super tax regime.

BTW the oldest baby boomer was born in 1946 meaning that they have turned or will be turning 77 this year.

October 14, 2023

Nice ad hominem attack but didn't actually answer any of my salient points. But let's look at the bigger picture, at 60 or 77yo, they won't have the issue of later generations; that of paying tax until it (hopefully) gets back to where we bought it (inflation regardless). Still not really enough to complain about.

Peter Chegwyn
October 08, 2023

At 86 I find the proposal very unfair. Apart from taxing unrealised gains and no indexation of the cap it is silent on putting politicians in the same camp.

October 08, 2023

Hi Graham,

I really appreciate your work on this each week. Well done.

I had trouble finding this week as the main links seemed to be take me to the previous edition? Not sure if this is an issue my end or yours?


George B
October 08, 2023

In an alternative universe people with $100m in their super fund would be celebrated as super achievers and aspirational role models for the rest of us to emulate in the same way that elite sports stars are celebrated in this country. Instead the government has chosen to vilify such achievements which occurred legitimately under prevailing rules that various governments have presided over and tweaked from time to time. I have three concerns about the way the Albanese government has gone about the new tax on superfunds over $3m.
1. It will tax unrealized gains which if they turn out to be illusory may not be reversible.
2. It is effectively retrospective because it changes the rules after significant long term investment decisions have been made (in the past tax changes such as CGT concessions on long term investments such as property was grandfathered for existing stakeholders)
3. It will not be indexed meaning that the justification for the tax will lose more credibility over time

October 09, 2023

People being able to get $100M or even $10M in Superannuation was never the intention of Superannuation.

It's purpose was to fund or part fund ones retirement, not be a wealth creation tool.

Super used to have Reasonable Benefit Limits, RBL's whereby you could have twice the balance if using it for Super Pension Purposes than if you used it for lump sum purpose.

Howard and Costello allowed deposits of millions which benefited the rich at the time.

As mentioned by another here, what about a Cap? IMHO they should have a cap on Super Balances. $3M (indexed sounds about right) this is enough to fund anyone's retirement. If you have the means to save more than this there is no reason for it to be in the favoured tax treated realm of Superannuation. Save/invest any extra outside the Super system.

With the proposed system, they should allow those that have reached the $3M TSB that are under preservation age the option to take ut any amounts over if they choose. Add an additional clause to the Early Release Criteria saying Those with amounts above $3M on can withdraw those amounts if they choose.

Current proposal of no indexation is a bad idea but at least it is left open for future governments to change the figure down the track.

Will Wallis
October 06, 2023

The tax on unrealised gains is a significant concern for me, as my Super Fund is invested in shares and property. The values go up and down from year to year, and I am facing a difficult decision about whether to take the risk and pay the tax, move the investments to more stable options or simply move the Super money into another home, where a different tax arrangement applies.

I feel the new tax is really an attempt for the government to obtain the tax money early - all the large Super Fund owners will pass on soon and the "problem" will solve itself. When the RBL gets close to $3 million, which will not take long after a burst of inflation, the tax will be withdrawn, with no apologies for the problems it caused for the few.

Mark Hayden
October 06, 2023

Graham, please give us a break about the $3m non-indexed cap ! A couple with $6m can drawdown $360,000pa indexed (6%pa indexed) tax-free for a long time (and then drop the drawdowns at older ages). Let us not waste time on the $3m. Yes the unrealised gains needs addressing, but there are simple solutions available. There are plenty of other matters that deserve reasoned analysis and healthy discussion.

Graham Hand
October 06, 2023

... which is why I wrote: "Chalmers is ignoring the main objection to the tax. It is not so much the amount but the way it imposed, taxing unrealised capital gains. Most people in the industry accept the need to cap super benefits but this calculation method is a radical departure from normal tax policy and introduces anomalies."

October 06, 2023

Graham hit the nail on the head, it is the indexation issue for our children going forward...... and also bringing in unrealised capital gains. I believe that there is only one other country in the world that taxes capital gains in this way. There could also be the potential for "murky" valuations by large Super Funds (especially with unlisted assets) to get around some of the "unrealised" capital gains issues.

Peter Martin
October 07, 2023

I agree with Mark.

October 09, 2023

To the contrary, I thought it was was a beautifully-expressed thoughtful piece, typical Graham, thanks. Just skip any topic you are not interested in. The last minute is not the time to be thinking about these things for those of us who are either interested or affected.

Mark Hayden
October 06, 2023

Graham, please give us a break about the $3m non-indexed cap ! A couple with $6m can drawdown $360,000pa indexed (6%pa indexed) tax-free for a long time (and then drop the drawdowns at older ages). Let us not waste time on the $3m. Yes the unrealised gains needs addressing, but there are simpler solutions available. There are plenty of other matters that deserve reasoned analysis and healthy discussion.

Kevin Deeves
October 06, 2023

As a former (now retired) Australian Government Actuary, I am writing to express my concern at the proposed changes to superannuation tax.

As I understand it, there is no indexation included so that, in effect, the law is a deliberate proposal to remove tax concessions from future Australians.

The following is a quick summary of how this will happen.

Assuming inflation has a 3.5% average over the long term, real value will halve every 20 years. I have used 3.5% because it is a nice round figure. Even though attempts are made to keep inflation within the 2% to 3% band, there are always going to be years where this is significantly exceeded and the 3.5% average I have assumed is probably on the low side, so actual effects are likely to be worse than what I write here.

Talking in real values of the Australian dollar being at the current level, the $3 million threshold will effectively halve in 20 years and halve again in a further 20 years. That is, a person now aged 20 will see all their superannuation over a current value of $750,000 (including unrealised amounts), taxed at 30% by the time they are 60. Such an change, without indexation, would effectively make self-funded superannuation unviable within a relatively short period. Even at cpi indexation the effect would be similar to what we now with the Medicare rebate, no longer of much use. Any indexation would need to be at an ‘average earnings’ level to be effective.

It is hard to see the bulk of the Australian population, once they understand the actual effects, seeing this proposed change and the effect on themselves and their children as acceptable.

October 09, 2023

Fully agree

October 05, 2023

Just scrap the costello non taxing of super pensions for people over 60 and most of the problems disappear.

You will be left with a withholding tax of 15% when super is in accumulation, and when the pension starts then the drawings out of super gets taxed at the persons marginal tax rate, less the withholding tax already deducted.

Then any residual upon death gets taxed appropriately

Problem solved

Jon Kalkman
October 07, 2023

The pre-Costello arrangements collected very little tax as I explained here:

And that explains why no government since has tried to resurrect these tax arrangements. The 2017 Transfer Balance Cap, introduced considerably more tax on super in retirement than Costello did. This new tax by Chalmers may collect even more.

Please note that the pre-Costello tax arrangements still apply today to death benefits. To minimise the tax on the death benefit your offspring receive, it may be worthwhile learning how that works.

john flynne
October 05, 2023

Unfortunately, the Treasurer is being selective he does not address other parties such as the PM who will have an equivalent of $6.4 million when her retires but will not affected by this change. One rule for some another rule for others. It was discussed at the outset they would look to do equally to all. Where is this paper or discussion ??? (very well hidden)
I would suggest that the tax on values above $ 3 million is inconsistent with Labor principles (they seem not to count these days or even know them.
I doubt whether many would object to the 30% on income. The moral and equitable way would be to tax it at 50% on the funds left after death.but that would take integrity


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Money withdrawn from super after age 60 is tax-free but less understood are arrangements that allows a couple over the age of 67 to earn up to $57,948 per year outside super and pay no tax with LITO and SAPTO.

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Investment strategies

Two proven ways to make big money in markets

Many ASX success stories – like JB Hi-Fi, Lovisa, and AUB – have followed one of two strategies: rolling out single store formats nationwide or consolidating fragmented industries. Here are the secrets behind these business models.

Investment strategies

The bank is still a terrible place to put your money

With the RBA having lifted interest rates by 4.25% over 18 months, many investors now see cash as an attractive investment option. That ignores the silent tax of inflation, which makes other assets better investment alternatives.

Little to fear from APRA's hybrids review

APRA's objections to hybrids are misplaced. If the regulator wants more safety in our banking system, it will come at the expense of effectiveness, and that's why wholesale changes to the hybrid market are unlikely.

Investment strategies

Rates higher = shares lower… is it that simple?

Typically, higher interest rates are associated with lower share market valuations, but not always and the relationship hasn’t been that strong over the long term. Company fundamentals will matter more over the next few years.

Investment strategies

Diversification is not a free lunch

Harry Markowitz said that “diversification is the only free lunch in investing” as holding a broader range of assets can result in better returns without assuming more risk. This has become accepted wisdom - but it isn't true.


Why Asia remains one of the world's best growth stories

China’s economic slowdown and the resilience of the US dollar have dimmed the lustre of many Asian economies’ strong growth momentum in the past year. But heading into 2024, Asia's growth story should reignite.

Podcast: Property picks, PE update, and Warnes on Michelle Bullock

Charter Hall's Steven Bennett talks through commercial property's challenges and opportunities, Schroders' Rainer Ender on private equity's bright spots, and Peter Warnes on how RBA hawkishness will impact rates and the economy.



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