Why enabling Superannuation Funds to achieve higher rates of return is critical for the national interest?
Australian superannuation rates of return achieved over the longer period by superannuation funds will impact both on the living standards of future retirees, and government levels of spending required to pay aged pensions. Australia’s growing aged population poses a frightening challenge to future governments trying to fund a safety net for those dependent on the public purse.
A superannuation fund should desirably aim to achieve a minimum average 5% net return above inflation over time on capital employed, to enable the amassing of sufficient capital to provide superannuation recipients with the means to become self-funded post retirement. The current concessional superannuation rates of tax levied during a respective fund’s accumulation stage are designed to facilitate that process, and only a foolish legislator would increase this rate, as increasing the degree of difficulty for the populace to become self-sufficient will dramatically increase the number of retirees who consequently become government dependents.
STR intends to lobby against any taxation changes to superannuation rules that will adversely affect the rates of return SMSF holders can earn on their investment. Much work and skill are entailed in building the capital base of an SMSF over time to afford its member(s) the means not to have to partially or wholly depend on receiving an aged pension. Governments (and particularly socialist governments) who lack the fiscal discipline to live within their means have a bad habit of resorting to plundering softer targets (i.e. In the form of Superannuation tax concessions) to fund whatever foolish populist spending that they are pressured to enact.
The long-term consequence of increasing government taxes on SMSF’s and industry funds would be to force increasing numbers of retirees to claim the aged pension, so it follows that in time government revenue would no longer be able to fund either pensions or the social security safety net that Australians have always taken for granted.
A rich country like Australia should be able to continue to provide a safety net for those unable to fend for themselves, but the growth in government spending, when unaccompanied by increased productivity, threatens our capacity to provide for them. Increasing the degree of difficulty for people to become self-sufficient, under whatever fraudulent or class war type pretext, is to bequeath a lower standard of living to future generations.
When building the value of their respective SMSF’s readers can help their country by both not becoming a drain on the public purse, and stimulating the economy and creating more jobs and opportunity for our youth by having more disposable income to spend in retirement. Retirees self-interest is to enjoy a better standard of living, which also accords with the national interest.