Tuesday, April 10, 2018

Go away, Adam

Hasn't Adam Creighton long argued that the family home should not be exempt from the old age pension assets test?   A truly enormous change that would have very far reaching consequences for many on the age pension.

Yet here he is today, co-writer of an article of the type we will see re-cycled endlessly in The Australian before the next election, taking a sympathetic approach to rich self funded retirees whining about how Shorten's changes to dividend imputation would reduce their income.

Apparently, Creighton has oodles of sympathy for self funded retirees who pay no tax on superannuation earnings, but very limited sympathy for pensioner folk who are the (often inadvertent) beneficiaries of capital gain on a asset which doesn't produce income for them:

Labor’s push to slap a minimum 30  per cent tax on dividends hasn’t only enraged tax purists by tearing up an 18-year-old tax principle, it’s incensed the nation’s million-plus army of self-funded retirees who are increasingly asking “why did we even bother saving?’’

Opposition Leader Bill Shorten’s policy to cease cash refunds for dividend franking credits should Labor win the election has potentially left up to one million self-funded retirees out of pocket.
John Bolton, a 64-year-old ­retired lawyer from Caloundra, in southeast Queensland, said Labor’s plan to “defraud” him of his retirement savings had made him reconsider a lifetime of hard work, describing the proposed changes as “grossly unfair”.

“I’ve had my children, I’ve raised my family, I’ve done a lot of free legal aid work and made my contribution to society,” Mr Bolton said. He likened Labor’s plans to “playing a game of football and the referee saying ‘that’s no longer a goal because I’ve changed the rules’”....

Despite his effort to put aside enough money to ensure he would not be a drain on public funds, Mr Bolton said Labor’s proposal meant he was seriously considering going on “back-to-back overseas trips until my money runs out so I can seek a pension”.

The former lawyer, who retired earlier than anticipated after his wife was diagnosed with terminal cancer, said he had always adopted a practical financial approach, working 10-14-hour days, weekends and public holidays for most of his working life. “I have planned my life around the rules as they exist,” Mr Bolton said. He said he cried when at 24 he had to sell his boat in order to ­afford his first home, but “it was just what you had to do”.

“Unlike the kids of today who claim they’re priced out of the housing market when they can’t live on Sydney’s north shore,” Mr Bolton said. “We sold our toys and bought a block of land for $8500, about an hour out of town.’’
Yeah, sorry about your wife and all that, Mr Bolton, but telling the story of crying at 24 when you sold your boat to buy a block of land - yeah, I would have held that bit back if you're hunting for sympathy.  Also - there are other ways to arrange your investments to reduce the effect of the change.  But no, you go and spend it all on yourself in a fit of pique that governments sometimes reverse poorly justified policies. 

And Creighton I still think is awful on policy.

1 comment:

not trampis said...

Hard to have sympathy for a person who is living tax free and gaming the system by getting dividends tax free as well despite having a large overall income.