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ABC News
14-07-2025
- Business
- ABC News
How Australia's superannuation system subsidises the wealthy
What's the definition of reform? It all depends on who you're asking. The Macquarie Dictionary neatly sums it up as thus: "The improvement or amendment of what is wrong, corrupt, etc." But when it comes to money, and particularly taxation, the righting of wrongs is chucked out the window. Self-interest reigns supreme. Everyone, it seems, claims to want tax reform. But you only need to scratch the surface to figure out that what they really want is to not pay any tax at all, and to let someone else pick up the tab. Never has that been more evident than right now with the growing chorus of opposition to the federal government's plan to claw back some of the tax breaks available to the nation's richest households. The backlash underscores the difficulty in implementing real reform. Only a tiny fraction of the population will be impacted by the proposed changes — which will claw back about $2 billion a year in revenue — and, on any reading, they hardly need to be on the receiving end of social welfare programs. Treasury advice provided to the Albanese government after its re-election revealed this week by the ABC, the need for higher taxes and spending restraint to put the federal budget back into balance. But the tax system is not merely an instrument for raising revenue. It is also an important tool for distributing national income to minimise the harmful impacts of wealth inequality that can erode social cohesion, harm economic growth and lead to political instability. For all the noise over the mooted superannuation changes, it simply is an attempt to partially close off a loophole that has been used to set up tax shelters for the rich rather than provide for retirement. Even after the changes, wealthy individuals will still be able to provide themselves with a generous tax-free income. Younger Australians, meanwhile, on much lower wages will still be forced to carry the can, subsidising a cohort of well-off retirees for health care and aged care services. It's the kind of intergenerational wealth transfer that has raised concerns for many economists. Somewhere out there, there's a self-managed super fund with more than half a billion dollars. If the person behind that fund is retired, in a half decent year, the fund would be throwing off around $50 million or so in income, a little under $5 million a month. Most of that income is taxed at a mere 15 per cent, a rate way below the level of most working Australians. That's now about to change although the privileges aren't being entirely stripped away. But it's generated an enormous backlash from the wealthy and powerful section of society. The Australian Tax Office no longer reveals the size of the top individual funds. Perhaps it is too embarrassing. The latest figures, obtained last October for the 2022/23 year by the Australian Financial Review, show that the 10 biggest self-managed funds had an average of $422 million each in assets and 42 funds had more than $100 million each. Clearly, super funds of this magnitude aren't about a retirement income. They're tax shelters. Once the beneficiary has retired, the earnings from super funds are mostly tax free on balances up to $2 million. That limit, introduced by the Turnbull government, was an attempt to haul in the runaway expenses of the overly generous superannuation system. When first initiated, the limit was $1.6 million but it has been frequently lifted to keep pace with inflation, including just a fortnight ago. Beyond the new $2 million limit, retirees are obliged to pay just 15 per cent in tax on earnings and only on the portion above the limit. That's below the tax rate for a worker pulling in a meagre $18,200 a year where the tax rate is 16 per cent. Even apprentices and those just a little beyond the minimum wage have some of their earnings taxed at 30 per cent while tax rates for those higher up the scales hit 37 per cent and top out at 45 per cent. Under Jim Chalmers' proposed new system, another cap will be put in place. Funds with balances between $2 million and $3 million will continue to pay 15 per cent tax on earnings between those bands. Those with more than $3 million will pay 30 per cent on earnings above that upper limit. That's still below the top two tax rates for those who actually work for a living and represents a generous subsidy, a social welfare payment, for those sitting on massive retirement funds. In an average year with 7.5 per cent returns, a fund with almost $2 million will deliver a retiree close to $150,000. With the kind of returns we've seen in recent years, up to $200,000 wouldn't be a stretch. That's a pretty decent income. And it's tax free. Once the fund grows beyond $2 million, tax starts to kick in but only on the earnings above the $2 million threshold and only at 15 per cent. Bear in mind that most retirees in this category would likely own their own home. With a fund approaching $3 million, kicking back almost $300,000 a year, the tax bill on that income would be a mere $15,000. On any measure, that is a large income capable of supporting someone in retirement. Compare that to a young Australian worker struggling to make ends meet and pulling in the average $102,000 a year. He or she would be up for a tax bill just shy of $24,000. If they weren't paying exorbitant rent, they'd be weighed down by an enormous mortgage that would most likely be draining most of their income, leaving little room for any kind of discretionary spending. Superannuation and housing have contributed to an ever widening inequality gap in Australia during the past 20 years. According to a study by the University of NSW, Australians in the top wealth decile saw their riches grow a far greater rate than the bottom 60 per cent. Almost half of all the increased wealth went to the top 10 per cent of households since 2003. As our population ages, fewer workers will be forced to support an ever-growing number of retirees, many of whom will require expensive medical treatments and aged care. The mathematics clearly don't add up. At some point, revenue will need to be raised from somewhere other than lowly paid employees and the businesses that employ them. The obvious target will be a shift towards taxing wealth in addition to income. But that kind of shift doesn't come without a fight. Any change to tax regimes involves someone being worse off. And even if they remain better off than most others, powerful vested interests refuse to cede ground. That's precisely what we're witnessing now, where a little over 80,000 well-heeled individuals are digging in to ensure they not just retain their wealth but the ability to ensure it grows at the expense of others. According to the Grattan Institute, tax breaks on super contributions alone cost the federal budget $50 billion a year and disproportionately accrue to older and wealthier Australians. Malcolm Turnbull was labelled a turncoat for introducing the superannuation earnings ceiling. Jim Chalmers, in the meantime, has been attacked for not being bold enough, that a thorough overhaul of the system is required rather than tinkering around the edges. Perhaps the much-vaunted Economic Reform Roundtable will yield a breakthrough where everyone abandons self-interest and comes together to work in the best interests of the nation. Then again, maybe not.
The Age
07-07-2025
- The Age
Why our mushroom murder trial fixation is a sign of hope
The conversation descended, as it always does, to the mushroom lunch trial. Beef Wellington, specifically individual beef Wellingtons. Dehydrators. Asian grocers. Death caps, foraging, gastric band surgery, factory resets, Phone A and Phone B, grey plates and orange plates. The trial created its own lexicon of contenders for the Macquarie Dictionary's word of the year. Australians have been fixated on criminal trials before, but those can mostly be traced to universal themes and shared emotions. The backpacker murders and the outback killing of Peter Falconio played to deep Wake In Fright fears about the wide brown land. Kathleen Folbigg's and Keli Lane's trials touched the nerve of maternal filicide. Lindy Chamberlain's trials combined both. The public fascination with the mushroom lunch trial was different. There is something broader to be said about in-laws and cooking, but it was the trial's very singularity, its bizarre uniqueness, that connected it to the times we are living in. What does it have to do with us? How does it affect us? Nothing and not at all. When we are waking up each morning to discover what new atrocities were committed overnight, when we are asked whether nuclear war, artificial intelligence or climate change is the greatest threat to humanity, the mushroom lunch trial was trivia. But this is why it gripped so many of us, and it was actually a good thing. While pondering why I'm suddenly so well informed about beef Wellington, wild mushrooms and dehydrators, I came across a New York Times essay by Ken Jennings, host of the TV quiz show Jeopardy!, now in its 61st unbroken year. Since taking over from Alex Trebeck in 2020, Jennings had asked himself if such quizzes could 'survive the conspiracy theories and fake news of our post-fact era'. 'Facts may seem faintly old-timey in the 21st century,' Jennings wrote, 'remnants of the rote learning style that went out of fashion in classrooms (and that the internet search made obsolete) decades ago.' But if you look around, trivia quizzes – and therefore facts – have never been more popular. Media is spiced with quizzes for the reason that they suck in audiences. We get stirred up about the ambiguous wording of a question in the Good Weekend Superquiz. Pub trivia, imported from Britain since the 1970s, is booming among 18- to 25-year-olds. And let's not get started on those of us (guilty!) who use our phones less as communications devices than as pocket encyclopedias. 'Hold that thought, let me see what shows we've seen him/her in.' 'Don't mind me, I'm just checking.' As annoying as it can be, this behaviour does mean something. 'Trivia is far from trivial,' Jennings writes. He would say that, wouldn't he? But the supporting evidence is enlightening. It was January 22, 2017, when Kellyanne Conway, an adviser in the first Trump administration, defended spokesman Sean Spicer's false claims about the crowd size at Trump's inauguration. Chuck Todd, host of Meet The Press, asked Conway how Spicer could 'utter a provable falsehood'. Conway replied that Spicer was providing 'alternative facts'. Todd said: 'Look, alternative facts are not facts. They're falsehoods.'
Sydney Morning Herald
07-07-2025
- Sydney Morning Herald
Why our mushroom murder trial fixation is a sign of hope
The conversation descended, as it always does, to the mushroom lunch trial. Beef Wellington, specifically individual beef Wellingtons. Dehydrators. Asian grocers. Death caps, foraging, gastric band surgery, factory resets, Phone A and Phone B, grey plates and orange plates. The trial created its own lexicon of contenders for the Macquarie Dictionary's word of the year. Australians have been fixated on criminal trials before, but those can mostly be traced to universal themes and shared emotions. The backpacker murders and the outback killing of Peter Falconio played to deep Wake In Fright fears about the wide brown land. Kathleen Folbigg's and Keli Lane's trials touched the nerve of maternal filicide. Lindy Chamberlain's trials combined both. The public fascination with the mushroom lunch trial was different. There is something broader to be said about in-laws and cooking, but it was the trial's very singularity, its bizarre uniqueness, that connected it to the times we are living in. What does it have to do with us? How does it affect us? Nothing and not at all. When we are waking up each morning to discover what new atrocities were committed overnight, when we are asked whether nuclear war, artificial intelligence or climate change is the greatest threat to humanity, the mushroom lunch trial was trivia. But this is why it gripped so many of us, and it was actually a good thing. While pondering why I'm suddenly so well informed about beef Wellington, wild mushrooms and dehydrators, I came across a New York Times essay by Ken Jennings, host of the TV quiz show Jeopardy!, now in its 61st unbroken year. Since taking over from Alex Trebeck in 2020, Jennings had asked himself if such quizzes could 'survive the conspiracy theories and fake news of our post-fact era'. 'Facts may seem faintly old-timey in the 21st century,' Jennings wrote, 'remnants of the rote learning style that went out of fashion in classrooms (and that the internet search made obsolete) decades ago.' But if you look around, trivia quizzes – and therefore facts – have never been more popular. Media is spiced with quizzes for the reason that they suck in audiences. We get stirred up about the ambiguous wording of a question in the Good Weekend Superquiz. Pub trivia, imported from Britain since the 1970s, is booming among 18- to 25-year-olds. And let's not get started on those of us (guilty!) who use our phones less as communications devices than as pocket encyclopedias. 'Hold that thought, let me see what shows we've seen him/her in.' 'Don't mind me, I'm just checking.' As annoying as it can be, this behaviour does mean something. 'Trivia is far from trivial,' Jennings writes. He would say that, wouldn't he? But the supporting evidence is enlightening. It was January 22, 2017, when Kellyanne Conway, an adviser in the first Trump administration, defended spokesman Sean Spicer's false claims about the crowd size at Trump's inauguration. Chuck Todd, host of Meet The Press, asked Conway how Spicer could 'utter a provable falsehood'. Conway replied that Spicer was providing 'alternative facts'. Todd said: 'Look, alternative facts are not facts. They're falsehoods.'
AU Financial Review
17-06-2025
- Entertainment
- AU Financial Review
Vapes are knock-off cigarettes. Fashion insiders should know better
The worst thing you can accuse a fashion person of is being unoriginal. Ripping off other people's ideas – and even worse, doing a terrible job of it – is the stuff of nightmares for those who consider themselves at the coalface of creativity. So I guess I just don't get how vapes – the ersatz cigarette, the pretend lung dart – have infiltrated fashion so thoroughly. Because if there's anything that proves the enshittification of this world – to borrow Macquarie Dictionary's 2024 word of the year – it's the idea of supposedly stylish people hitting up a vape. You want to talk about dupe culture making fashion dull and repetitive, robbing the industry of its one wild and precious life?
The Age
30-05-2025
- Politics
- The Age
This is fine: An existential guide to Australian politics
Albert Camus would have been a lousy goalkeeper. Think about it. The French-Algerian standing between the posts, his head in the clouds. Reports say the writer excelled for Algiers Racing Uni's First XI, but I have my doubts. Imagine relying on Albert as your last line of defence, the bloke spouting stuff like, 'The only real progress lies in learning to be wrong all alone'. Or: 'An intellectual is someone whose mind watches itself'. Wake up, Albie! The ball is coming! Tuberculosis intervened, sadly, the goalie trading gloves for philosophy, plus those olive-green novels – The Stranger, The Fall – that ask the big questions. Each title has been a staple of high school and Existentialism 101. Not that Camus used the term. Indeed he rejected the e-word, preferring instead to forge fables around the incomprehensibility of existence. As that's the central plank, that irksome query about why we're here, and what we should do about it. 'Man is the only creature who refuses to be what he is,' as Camus said. Which makes you wonder what we're meant to be. Precisely the conundrum heard in Canberra this month. Is it any wonder? How can a power bloc of two parties implode into a rabble, losing seats like musical chairs, going from Coalition to Noalition? Cartoonist Cathy Wilcox depicted a bisected couch, one parent per half, both insisting 'Mummy and Daddy still love you very much'. Question being, are Mama Ley and Papa Littleproud going through a break-up, or merely a break? Either way, whether this new reunion lasts, the existentialism burns deep, fanned by those pesky Camus questions. 'I can't go on, I'll go on,' as Samuel Beckett said, a handy left-hand opener for Trinity College, and another writer besotted by existentialism. Macquarie Dictionary defines the ideology as 'a group of doctrines – some theistic, some atheistic – deriving from Kierkegaard, which stress the importance of existence, and of the freedom and responsibility of the finite mind.' Existential first emerged about 1693 as an adjective for existence. A century on, Soren Kierkegaard co-opted the ism to refute the divine logic that Georg Hegel fancied, where the rational is actual, and vice versa. Lort, thought Soren: Danish for bullshit. In his milestone work Either/Or, the philosopher writes, 'There are two possible situations – one can either do this or do that. My honest opinion, and my friendly advice is this: do it, or do not do it. You will regret both.' Loading Remind you of anyone – federally, I mean? Hence the e-word's rise. Existential now applies to politics, the arts, deconstruction cuisine, eco-anxiety, and anywhere you look. Last year Flinders University revealed how doomscrolling – surfing online between Gaza and La Nina – breeds existentialism. Reza Shebahang, the study's lead, claimed the custom has 'dire consequences on our mental health, leaving us feeling stress, anxiety, despair and questioning the meaning of life'. Smart machines and AI inroads only deepen the abyss. Pushed to existential extremes, we feel like adjuncts to this thing called life. Avatars. Daydreamers in the goalmouth. Or characters living life forwards so that we might understand what we're doing in hindsight, to paraphrase Kierkegaard. If it's any comfort to party leaders, doomscrollers and general AI alarmists, remember that 'the key to being happy isn't a search for meaning. It's to just keep yourself busy with unimportant nonsense, and eventually, you'll be dead'. Camus? Beckett? Try Mr Peanutbutter, the easygoing labrador from BoJack Horseman.
