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Unexpected results from Federal Election survey

There was a strong response to our election survey, with some surprising results.

We acknowledge up front that the results from opt-in polls are not as significant and independent as those using a statistical method to pick respondents. It’s important how people are selected, and where the respondents choose themselves, pollsters argue the sample does not reflect the general sentiment.

With this qualification, there were some unexpected results from the 530 responses to date. The hundreds of comments in the survey give more insights into the ways our readers are thinking. The survey will remain open for a few more days in this article.

The full survey results are linked here.

Q1. Did the Government’s proposed changes to superannuation policies influence your vote?

The majority of respondents advised that the proposed super changes influenced their vote (although as one person commented, the question assumes an adverse reaction). The public debate has been intense since the election on whether superannuation issues were significant enough to change votes. This result and many of the comments provide evidence that the changes did motivate voters.

Q2. Which proposed change had a significant impact on your vote?

While responses were evenly spread and multiple answers were allowed, the breaking of a previous commitment gathered the most votes. Some of the comments mentioned the reduced concessional cap of $25,000 as a major factor, reducing the ability to salary sacrifice into super.

 

Q3. Do you believe the proposed superannuation changes affected the overall election outcome?

Another unexpected result, with the majority of people believing the super changes had some impact on the election result, and only 14% going for the firm ‘no’.

Q4. How do you compare the Government’s proposed super policy changes with Labor’s? 

While 36% said the changes proposed by both parties were unacceptable, 28% nominated that Labor was as bad or worse based on their proposed $75,000 tax-free earnings threshold. Only 21% said the Government was worse due to the caps on contributions and the new tax-free limits. This suggests many people not only changed their vote away from the Government but also Labor due to both parties breaking previous promises. Perhaps it explains some of the success of independents in the election, especially as a Senate protest vote.

Q5. Do you expect the election results to lead to changes in the super proposals?

Over two-thirds of respondents expect changes, due both to a backlash within the Government, and problems in the Senate. Question 6 invited further comments and the responses are worth reading.

Concluding comments

This issue will run for months. Foreign Minister Julie Bishop said she visited 80 electorates during the campaign and told Malcolm Turnbull and Scott Morrison that she was hearing a lot of negative feedback. Two Government Senators have called for a review. On 9 July 2016 in The Australian, Economics Editor Judith Sloan wrote a column titled, ‘That was not such a good idea after all’, including:

“The superannuation issue came close to derailing the Liberals’ campaign as floods of complaints were fielded: party resignations from longstanding members were reluctantly accepted; donations dried up; and previously willing volunteers refused to help in any way.”

In my opinion, the most likely change is the removal of the backdating to 2007 of the $500,000 non-concessional (after-tax) limit. Not only will it be complex to administer and require data going back further than some tax records, but it is the change most vulnerable to the retrospective argument.

 

17 Comments
Laine
July 15, 2016

The new rules will add yet another layer of complexity to the retirement income system. We need a whole new approach.

All seniors over pension age would get a tax free amount equivalent to the current couple pension rate with no assets or income test.

Single pensioners would get a means tested additional amount so their pension stays at the current single rate.

All other income becomes taxable for retirees.

Super becomes a means of saving so you get a better income in retirement than your basic pension amount.

After retirement super fund managers can still look after your money for you. They pay you an income and look after the tax (which is calculated by the ATO as they know all your sources of income).

The overall benefits are huge and the system would pay for itself.

The government saves on administration costs.

Everyone has the same benefit so the system is fair.

People are encouraged to save as they receive a meaningful benefit from their savings when they retire.

There is no longer a discouragement for seniors to work beyond 65.

Seniors are not losing benefits when they downsize their home.

This makes for more efficient allocation of the current housing stock with families in larger homes and seniors in smaller homes.

The additional pension outgo would easily be covered by lower administration costs and the extra tax now paid by wealthy retirees.

Retirees would only be paying net tax if their income was above around $100,000 for a single or $200,000 for a couple.

At that point they would still be paying less than 40c in the dollar tax on their additional income. Current pensioners lose 50c of their pension for every dollar of income.

We would have a system that was easy to understand and easy to implement.

Ramani
July 15, 2016

Chemistry teaches us individually harmless substances can, when combined, blast everything into smithereens. Ask Nobel. So it is with human behaviour, super reforms being an instance.

Saving for own retirement; leaving a legacy; maximising legal concessions; not depending on age pension - all very worthwhile.

Taking beneficial changes, even if retrospective, without demur; asking for such changes; objecting when some changes turn adverse - all very natural.

Faced with inevitable insolvency of the burgeoning unfunded age pension system, both major parties have agreed some benefits must be wound back. Otherwise we would be toast (or Greece).

As national savings involve give and take, givers complain even if they have been takers (relative to marginal tax rates, an opportunity benefit).

Amid all the changes, it is poetic justice that our self preservation is constant. The weakened Government has a tough job ahead, and for our collective sake, it should succeed.

Ben
July 15, 2016

The Howard-era changes now followed by the present changes lurching the other way leave us with a system worse than we started with. The Coalition can't be trusted to sensibly run superannuation policy.

Fred Randall
July 15, 2016

We need to bombard politicians with the definition for the purpose of super to be "to minimise the number of people needing a pension".
All other ideas receive a backlash from pensioners, many of whom legitimately planned their retirement around the rules at the time they entered the system.
This definition should result in better treatment of people who saved for their retirement and thus encourage more people to save.
The definition would allow for the passing of funds from one generation to another thus improving the chance of the next generation being independent in retirement.
We need to stop the rort of people buying a $2 million house in order to qualify for the full pension.
Can Pat Connelan (above) explain why a person who blows all they earn during their working life should be more "entitled" to a taxpayer paid pension than someone who saved to help his/her kids out.!!

Pat Connelan
July 15, 2016

Stephen, do you understand how a progressive tax system works? Even the superannuation industry recognises that the tax changes announced by Costello in 2007 were obscenely inequitable. As for the fruits of hard work, low income teachers and health workers and retail staff work hard too. But they get no tax incentive to save more for their retirement because under the current system they don't earn enough. If you think there's nothing wrong with that perhaps do a course in economics

bigjulie
July 15, 2016

Kamikaze Turnbull.
"Even after I lost 14 seats, I am unscathingly infallibly correct. If I go down in rancid flames so will that Liberal Party".
Superannuation "bait and switch" was morally wrong and the electors knew that the Sheriff of Nottingham was callously plotting with Shorten to inveigle into their meager piggy banks.
He should man up and admit he was wrong to betray previous Parliaments' inviolate promise. Otherwise, the Liberal Party is kaput. So too, the two Big Spender Pirates.
Senator Eric Abetz is correct. What a star! A contract was made: you do this and we will do that. This cannot be broken. Change the rules for future contributions but honor the prior commitment. Safe harbour for the retired Tribal Elders or all sink.

Roger Farquhar
July 14, 2016

The problem with these polls is that they don't cover a large proportion of the community so are subject to bias. Looking at the demographics and individual seats eg Julie Bishop, who was returned with an increase, it would seem that the super issue has been overblown by disaffected politicians and is not supported by voters.

Alfred Ellis
July 14, 2016

My wife and I have uneven pension account balances. This did not matter when we were building our respective balances. However, the introduction of RBLs (surely a retrospective change !) means one account is considerably in excess of the $1.6m cap, whilst the other is less than the cap. The PM has said that a couple can have a $3.2m cap and pay tax on the earnings on account balances above this figure. We would accept the changes on that basis. However, because of existing super rules, we are unable to even up our account balances. RETROSPECTIVE CHANGES TO TAX LAW IS BAD LAW and should not be introduced.

Rob Johnson
July 14, 2016

I thought the whole idea of super was for us to put more in, to avoid having to reach into government coffers later in life. Every new lot which is voted in has the latest bright idea of the purpose of super, and the requisite rule changes. Both parties are now re-introducing Paul Keating's Reasonable benefit Limits, with a new method of calculating it.
Nothing new under the sun.
Maybe we need a new single issue party - "Save our Super" ??

Pat Connelan
July 14, 2016

Well, there's a surprise - wealthy old white men resentful at their tax lurks being taken away. If super's goal is to lessen reliance on the age pension, why target tax concessions at people who will never call on the pension anyway? The super changes are good policy and are opposed only by greedy, already wealthy people with their snouts in the public trough.

Stephen
July 14, 2016

Spoken like a true champion. Will your snout be in the trough when you claim a pension that these supposed greedy rich people will not be able to claim? Have you ever thought that superannuation works for those that save hard to make themselves a better life after work rather than spend it all?? Response from an ignorant standpoint. Take a long hard look

Peter
July 15, 2016

Good comment Pat

Patrick
July 14, 2016

Good to see grey power having an effect. The Liberals showed complete arrogance towards superannuants in effect saying we can do what we like when we like with your super.

Anton
July 14, 2016

Excellent comment about Turnbull/Morissons arrogance. It seems from reports that they still have not learnt.

David
July 16, 2016

We all know that the superannuation benefits brought in by Howard and Costello were far too generous and have gradually been wound back - as they should be. However the planned changes were introduced far too suddenly - one presumes because much of the budget was strung together at the last minute. It would have been far better to have raised the possibilities long before budget time to assess their acceptance, and in this even confirmed liberal voters like myself accuse the PM and Cabinet of arrogance.
There was undoubtedly retrospectivity in back-dating non-concessional contributions to 2007 so that all those who had left their non-concessional contributions until June were caught out and very annoyed.
$25000 for 40 years plus $500,000 non-concessional amounts to $1.5 mill, and at 3% is $45000 pa which will be entirely insufficient in years to come.
Having said that a Coalition government is our only hope of economic stability and politicians who have some financial responsibility and do not owe allegiance to selfish and unscrupulous unions.

R. Skinner
July 14, 2016

While people are focusing on the changes listed above, the real problem for most Australian pensioners lies in the changes to Centrelink asset test threshold levels and changes to the so called taper rate.
Currently pensioners who have assets above the lower threshold level,(currently $205,500,) lose $1.50 of their pension for every $1,000 they are over that threshold amount.

As of 1-1-2017 the government proposes to double the amount that pensioners lose. $3.00 per $1,000 will make a huge difference to over 235,000 pensioners who will have their pensions reduced and more than 90,000 who will lose their pension entitlements totally according to financial analysts.

Take a pensioner home owner couple with a superannuation balance of $450,000 combined. (Not an overly large amount of money for people who have been in superannuation all their working lives.) The lower threshold limit will be set at $375,000 in the new year, so for every $1,000 over that amount they will lose $3.00 of their combined pension payments. This equates to $225 less pension every fortnight that the couple will receive ($5850 per year.)
People should start writing to their federal senator and local federal members demanding that this be stopped, or at least raise the lower threshold to say, $500,000. The proposed changes, while putting more in government coffers, will cause pensioners to have to draw down on their superannuation savings faster in order to maintain their current lifestyle.

The changes listed above will probably be overturned due to voter backlash at the recent election, and the people with large superannuation balances, who least need government support, will benefit over those who most need pension support in order to maintain a comfortable lifestyle in retirement.

Larry Warton
July 19, 2016

Agreed but it gets worse
Assume married couple $500k super plus $75k non cash assets incl car.
Equates to $200k over lower threshhold equals $600 f/n less pension.
Couple left with total income of $20k super earnings & $8k pension, total $28k.
This is $30k less than what is quoted as min. required to survive.

 

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