Government is right to tackle great super rort

Sydney Morning Herald

28-05-2025

The government's super tax proposal looks like a slow and gentle method of reversing the superannuation rort created by Peter Costello (' Ignore rich men's super tax whine ', May 28). His opening of the floodgates before the 2007 election let the richest few per cent of the population put huge amounts of money into super, where they have happily been dodging taxes ever since, with 10 per cent taking 40 per cent of the tax concessions. After the change, we will see many of them pull their money out of super and put it somewhere else. Even if they use family trusts to split the tax load, they will still pay more tax than they do now. The farmers with self-managed superannuation funds need only make a lump sum withdrawal of the capital gains asset to avoid the new tax. They might have to go back to a family trust for estate planning instead of using super. They look like a bunch of rich whingers to me. Alan Stanley, Upper Corindi
The issue is not whether income from super funds should be taxed, but whether it is fair to tax an unrealised gain. Sure, increase the tax on an actual amount, not a perceived amount, I believe everyone would accept that. It's more than fair to increase the tax on the initial drawdown from super at the beginning of the retirement phase, rather than what is 'perceived' throughout the life of a fund. Test what is fair in taxation, not a perception that will be open to conjecture. Pankaj Rao, Merewether
Ross Gittins is correct again in his criticism of rich old men. I believe such people are simply expressing their fear that their encouraged utilisation of a system developed to support retirement may not be passed on as a wealth inheritance. While I have nowhere near $3 million in superannuation, I have been advantaged and subsidised in both the accumulation and pension stages and can live comfortably because of it. I support the extra taxation on superannuation above $3 million. Thank you, Ross, for your clear articulation of these points. Howard Clark, Ryde
It is not just rich old men who do not wish to pay more tax. The 2019 election result, where Labor was struck down for having the temerity to advocate far greater fairness in taxation, was a salutary lesson about the problem in Australia. There is universal love of good government services, but most of us hope someone else will pay for them. Unfortunately, for anyone with the most basic knowledge of economics, the present government debt and projected deficits for at least a decade illustrate that the 'someone else' is an unrealistic dream and significant tax changes are essential if Australians really want their services and ultra-expensive defence hardware to keep us safe. John Howard's GST showed that new taxation can be introduced, but it will be essential to propose the changes before an election with the realisation that very likely a number of seats will be lost due to an aggressive opposition campaign. There is no doubt this must be done. However, it will require courage. Geoff Harding, Chatswood
Ross Gittins describing the Treasurer's new proposal to tax unrealised gains as 'a messy way to tax earnings' is an understatement. You can be sure that funds above $3 million will be deployed to other investments where this tax will not apply. The upshot being that the expected tax recovery just won't happen. Why not index the $3 million threshold now so that the younger cohort are not discouraged? The rule changes to limit concessional contributions, along with limits to borrowings against property in super, was reasonable, however, in principle super rules should be 'set to forget' so that there can be faith in the system of planning for retirement by all. A bigger broader tax reform is required. Bruce Hall, Avalon
Ross Gittins fears that if we don't fix our tax system to make things fairer for the young, we could be heading for the US disaster where the unscrupulous have weaponised the disadvantaged to grab power and give themselves tax cuts in a budding dictatorship. He sees Labor's proposed super tax changes as a reasonable start in levelling the playing field. There has been an almighty fuss about two elements, no indexation in the legislation and taxing of unrealised capital gains. Labor will have its work cut out to explain the changes better, or it may think that, with its huge majority, it can push the legislation through. The diminished Coalition might be desperate for something to campaign on. Super is only one area crying out for tax reform: 24 out of 38 OECD countries, including the US, UK and most of Europe, have inheritance taxes. Who's for a tax summit? Gary Barnes, Mosman
As usual, Gittins' common sense prevails over dollars and cents. Peter Bulkeley, Parrearra (Qld)
When are we going to wake up to ourselves over super? The way super funds are taxed will not change, meaning those in pension mode (cap of $1.9 million) will still enjoy tax-free earnings, as will those still rolling in it with the accumulation phase at only 15 per cent. The proposed change only affects individuals with total amounts in super exceeding $3 million, and only that portion over that amount. A minor inconvenience for those so lucky. Michael Blissenden, Dural
Exactly, Ross Gittins. Johanna White, Woonona
Spend all your wealth. Don't leave anything behind (' Plan to prevent a nasty inheritance dispute ', May 28). Mustafa Erem, Terrigal
Out of space touch
Talk about flogging a dead horse. Scott Morrison is now urging (' US missile system a chance for AUKUS in space: Morrison ', May 28) us to spend yet more money on his defence fantasy. When the reality of thousands of underwater killer drones bites, the core of this enterprise will collapse, leaving just a few enriched people courtesy of gullible governments. Greg Baker, Fitzroy Falls
Scott Morrison still appears to be out of touch with reality. We can't afford the questionable undersea AUKUS arrangements he arranged as prime minister. The US administration is in disarray, the US president is the defender of his own truth, using the world to enhance his own wealth. Why on earth would we commit to Star Wars? What about the moral and ethical questions raised by such a proposal, let alone our involvement with it? This idea sounds like another wedge from the former minister for everything. We don't need bulldozers in space. Geoff Nilon, Mascot
I am sure many Australians will be pleased to hear of Scomo's pride in pushing for an expansion of our AUKUS commitments into space. And for those who have doubts, you can be assured that this expansion has nothing to do with politics but, instead, his long-held concerns for our security. Could this be called the MITA Project? Money into thin air. Richard Tainsh, Potts Point
Focus on DV needed
I wish we could put as much time and resources into solving domestic violence as we are putting into Taskforce Falcon (' Tradie death spur for gang crackdown ' May 28). Murray Coates, Burra
No-voters claim win for the haves
Another case of the haves having total disregard for the have-nots, many of whom have supported the racing community (' No vote wins by a nose ', May 28). For the likes of Gai Waterhouse to use her influence to block the sale of Rosehill is disappointing.
Her family has prospered off the backs of punters, especially their involvement in online gambling, which has damaged so many lives. It's time regular punters recognised that horse racing is the sport of kings, the elite of Sydney, but for the man in the street, it's a mug's game. A missed opportunity to house many. Carole Hayes, Newtown
I'm a longstanding ATC member and punter who voted no, but I think there is a solution that can meet the government's housing objectives and deliver a financial windfall to the racing industry, albeit on a reduced scale of what was proposed with Rosehill. Sell Canterbury racecourse. It does not have the size of Rosehill but is more conveniently located to the city and will soon be connected to the Metro. It only hosts a handful of meetings per year, mainly at night during summer, and does not have any training facilities. The reality is Sydney only needs two tracks. Rosehill and Randwick are geographically best situated. Mind you, apart from a handful of meetings at both tracks throughout the year, I find the atmosphere at my local bowling club on a Saturday for a beer and a bet more enjoyable. Mike Kenneally, Manly
Now that the sale of the Rosehill racecourse has been voted down by the ATC, the government has been handed a golden opportunity to improve safety on our roads. The government should use its powers of resumption, or compulsory acquisition, to acquire the course for a more realistic figure than the $5 billion that has been touted.
The course should then be developed by turning it into a suburban street landscape, complete with all road markings, traffic lights, school zones, road works signs etc. The site would then become a place for driver training. This would remove learner drivers from busy streets, thereby increasing their safety and the safety of other drivers and pedestrians. The government would receive income from the rental paid by learner drivers for the use of the facility. Learner drivers would have the opportunity to actually learn how to drive a vehicle, rather than the present system of just teaching them how to make a car move and stop while strictly adhering to road rules.
Only when all this has been achieved should they be allowed to drive on public roads, and to take their driving test. Warwick Farm and Canterbury racecourses should be developed in the same way. Stephen Healion, Wang Wauk
That the Rosehill racecourse will not be sold is good news. First, the taxpayer saves $2.2 billion for an additional metro station. Secondly, 25,000 housing accommodates a population of 62,000. But overseas migration into Sydney was 120,000 in 2023-24. So Rosehill would numerically fill up in six months. That shows us that immigration must be reduced. Matt Mushalik, Epping
The NSW government should not abandon its plans for a Rosehill station on the new Parramatta Metro. Rather, it should show foresight in building infrastructure that will support development in nearby Camellia and the possible future sale of Rosehill Gardens. If the ATC and racing in Sydney are in the financial straits suggested by Peter McGauran, the ATC chair, this won't be the last time a sale might be on the cards. Philip Cooney, Wentworth Falls
Selective mismanagement
Having been fortunate enough to attend a selective school from 1964-69 (Letters, May 28), I feel somewhat qualified to comment on the latest controversy surrounding how
the selective schools system is now being managed, or perhaps mis-managed.
At the time of my attendance I believe there were only four boys' and four girls' selective high schools (all in Sydney), plus Hurlstone Agricultural which was co-ed. Candidates could only apply for one school, i.e. the nearest to their home. Also, at least in the case of my old school, Sydney Technical High, roughly 50 of the 200 who commenced year 7 were local lads, i.e. students for whom 'Sydney Tech' was their nearest high school. Perhaps it's time to reintroduce such a system to bring some sanity and diversity back to 'selective' schools? Martyn Yeomans, Sapphire Beach
When I came 23rd in the half-yearly exams in 6th class in 1955, I was told a selective school was out for me. I really wanted to go to the same high school as my sister. Determination made me third in the yearly, so I made my dream. Sadly, trauma occurred and I failed every subject in high school third year. With further perseverance, I continued and enjoyed training as a general nurse. Rise in self-esteem provided me with a valued career and valued knowledge. Judy Nicholas, Kambah (ACT)
Royal luck
It's a good thing Princess Ingrid Alexandra from Norway is living on campus during her education at Sydney University (' Princess Ingrid Alexandra swaps royal duties for student life in Sydney ', smh.com.au, May 28). It means she won't have to find somewhere decent to rent, or battle Sydney's train network to show up on time. Viv Munter, Tumbi Umbi
Gen S
I'm feeling a bit left out as I don't seem to fit into any of the popular categories (Letters, May 28). Born in the 1930s I am certainly not a Boomer, nor am I a Millennial or a Gen Xer. One of my grandsons says I am woke, if that helps. I am retired, widowed and self-funded. Guess that makes me a Survivor. Coral Button, North Epping
As a Boomer, I typically haven't got a clue about who is who in the generations war. I am compelled, however, to respond to the claim that Gen X is the coolest – mate, it was my mob who gave you the word. John Campbell, South Golden Beach