While many wonder what this war and stock market falls will do to our super balances, Treasurer Chalmers and the Greens have been cooking up a war with Australians who’ve built up their super balances. And there’ll be super giveaways for lower income Aussies.
While the investing world holds its breath over the course of the Iran war, with President Trump telling us that the war is “very complete, pretty much”, stock markets were higher on the related fall in the oil price from Monday’s highs of US$120 a barrel to now US$85.
This fall wasn’t purely linked to the President’s surprise revelation. It was helped by the G7 group of nations indicating they would tap their reserves of oil to ensure global supply wouldn’t be too stretched so as to create recession-creating price levels for what’s called ‘black gold’ or ‘Texas tea’. (Beverly Hillbillies TV fans might recall those nicknames for oil!)
Before the closing bell on Wall Street, our stock market is tipped to open up 46 points at the start of today’s trade. Our dollar is up to 71.42 US cents, which is another indicator that recession fears linked to the war smashing the oil price is becoming a lesser issue.
Our dollar is a good indicator for global economic fear because we’re a big exporting country.
And while many of us watch this war wondering what the latest and possibly future stock market falls will do to our super balances, Treasurer Jim Chalmers and the Greens have been cooking up a war with Australians who have built up their super balances. Meanwhile, there will be super giveaways for lower income Aussies.
News.com.au writer Joseph Olbrycht-Palmer has reported what we’re bound to see show up in the May Budget. Here are the likely hip-pocket affecting ideas from Labor and the Greens:
- Income from super balances between $3 million and $10 million will be taxed at 30%.
- That’s double the current flat concessional tax rate of 15%.
- Accounts higher than $10 million will be taxed at 40%.
- Around 90,000 of people will be affected, which is about 0.3% of super account holders.
- The threshold for the low-income superannuation tax offset (LISTO) will be raised from $37,000 to $45,000.
- Currently, the LISTO offsets the tax paid on concessional contributions to super for anyone earning under $37,000 to ensure super is still tax effective for Australians on low incomes.
- The maximum rebate is capped at $500 but will go to $810 a year.
- The plan to tax unrealised gains has been dropped.
- 1.3 million workers will benefit from this.
As with many economic policies for the Albanese Government, there’s a probable political pay-off as Chalmers happily pointed out yesterday. “We welcome this development and thank the Greens for their constructive engagement on this Bill,” he said. “Passage of this legislation, which is before the Senate, will mean more super for around 1.3 million Australians, including around 750,000 women and around 550,000 young people under the age of 30.”
The 90,000 people today and the ones in the future whose super balances will grow in coming years will not only regret putting a lot into super and being committed to growing it, but they’ll come to financial advisers like me to legally lower their tax bills on their investments, while still netting good returns.
It will make property more popular, as the challenges of the stock market with curve balls such as Donald Trump, the Iran war and the AI threats affect returns and the Government hits successful super savers with higher taxes.
All this won’t be great for property prices at a time when all governments are failing to solve our housing supply problem.
In 2023, The Australian looked at the most highly regarded and lowest regarded occupations. It came from Governance Institute of Australia’s Ethics Index 2023.
The highest were firemen and women, ambos and pharmacists, while the lowest three were federal politicians, directors of foreign companies based here and real estate agents.
