Government's proposed changes to super will hit everyone hard eventually

Alex Jamieson, leading financial advisor and founder of the highly respected AJ Financial Planning, has issued a stark warning to Australians about the federal government's proposed $3 million superannuation cap, describing it as a 'dangerous slippery slope' that could lead to a far broader and more punitive tax regime.
 

"This $3 million cap that is being proposed is a dangerous slippery slope," Jamieson said.
 

"Once it is in place, the next stop will be a New Zealand-style policy of taxing unrealised gains on other investments at a 33 percent tax rate. Anyone who thinks it will stop there is delusional.
 

"Once the government starts increasing taxes on superannuation it will eventually impact everyone.
 

"Make no mistake, this is a horrific tax grab that initially wields a sledge hammer to those who have worked hard, saved and made sacrifices putting their money into superannuation rather than blowing it on other stuff.
 

"The sledge hammer will then be used to hit everyone else.
 

"Superannuation is an easy target and a painful one for anyone who understands the importance of relying on superannuation to fund any type of reasonable retirement.
 

"Energy costs have gone up by some 40 percent over the last couple of years. Insurance and rates have doubled in some places. Aussies of all ages are going to need every ounce of superannuation they have to keep up with the cost of living in retirement.
 

"Seeing the government wipe out large chunks of it with more taxes is going to hurt. Many people may not realise it now, but they will soon if the government goes ahead with its proposed superannuation tax."
 

The government's proposal, also known as Division 296, remains on the table after the federal budget failed to clarify its status. With the SMSF Association confirming the policy will now be taken to the next election 'warts and all', Jamieson is urging Australians to look beyond the immediate headline and consider the long-term consequences.

"This isn't just about super. It's about the government signalling a broader shift toward taxing unrealised wealth across the board. It's a message that responsible saving and investing will be punished under the guise of fairness," he said.
 

Jamieson also pointed to unsustainable government spending as a key driver of poor productivity, rising inflation and a distorted private sector.
 

"Right now, 27 percent of GDP is being spent by the government and that level of spending is crowding out the private sector," Jamieson said.
 

"They wonder why productivity is poor. When the government takes up so much of the economy, it leaves less room for innovation, investment and entrepreneurial activity.
 

"Broadly, people have had a gut feeling that they're paying too much tax and that the demands for more will never stop. We're seeing exactly that play out now."
 

The SMSF Association has been vocal in its opposition to Division 296, describing it as 'highly flawed', while warning that the government's failure to amend or clarify the policy signals a lack of real consultation with the industry.
 

With the legislation stalled in the Senate and no changes in the budget, Jamieson believes the silence speaks volumes.
 

"The government is hoping Australians won't notice what's being quietly prepared in the background," Jamieson said.
 

"But anyone planning for their future especially through self-managed super needs to stay alert. This policy is just the beginning and it is a very bad one.
 

"The government is hopeful that it looks like they are only hitting the super wealthy and they can afford it, but little do Australians know that in fact, the government is intending to take their taxes much further and this is going to hurt a lot of people. By the time people realise this, it will be too late.
 

"This is why, people need to understand what is being proposed and make some noise.
 

"I strongly encourage Gen Alpha, Zs and millennials to experiment with Spam flavoured instant noodles as they won't be able to afford avocadoes in retirement if the government's superannuation tax goes ahead."
 

About Alex Jamieson
 
Alex Jamieson is the founder of Melbourne-based advisory firm, AJ Financial Planning. With a firm belief in responsible investing, Alex crafts investment portfolios for clients that not only meet their financial objectives but are also sustainable and match their ethical values.
 
A highly respected financial advisor, Alex is considered one of the country's leading experts on all matters financial planning, investing and retirement.
 
http://www.ajfp.com.au/