Budget gets negative planner response

Financial planners have been overwhelmingly underwhelmed by the Federal Budget, according to a survey conducted by financial services technology firm, Midwinter in the immediate aftermath of its tabling in the Parliament.

The Midwinter survey revealed strong negativity amongst financial advisers towards key elements of the Budget changes, particularly those relating to superannuation.

What the survey also revealed was that nearly 80 per cent of respondents would be initiating client reviews because those clients would be impacted by the Budget changes.

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The Midwinter survey canvassed the views of 103 advisers with the result that 57.4 per cent believed the Budget would have an overall negative impact on their clients, with only 6.7 per cent believing it would impact their clients positively.

What is more, only 25.5 per cent of respondents believed the Budget would impact their own advice business positively.

The results showed that 87.3 per cent of planners surveyed said they felt negative toward the proposed lifetime cap for non-concessional contributions of $500,000, while 86.4 per cent said they felt negative toward the proposed lowering of the concessional contributions cap to $25,000.

Just as importantly, the removal of tax exemption for fund earnings on transition to retirement (TTR) pensions achieved a 73.5 per cent negative response.

Commenting on the outcome of the survey, Midwinter managing director, Julian Plummer, said the Budget changes had prompted his company to prioritise changes to its systems, and that if the Federal Opposition offered its support to the Budget changes, Midwinter would not be waiting for Royal Assent before moving on the issue.

"We will certainly prioritise the contribution cap reduction, but may look to "wait and see" what happens with the rolling concessional contribution cap and the lifetime non-concessional contribution limit," he said.

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Given the position that the government is in, the budget is about as fair as it could be. Politicians don't normally impress me, but i think the budget was a good one overall. Good for the country. If it makes a little more work for us planners, then 'suck it up princess'. Put your thinking cap on and get to work. Super was made too good and not affordable for the nation with our aging population. something had to be done to tighten up use by wealthy as a tax minimisation scheme. a $1.6m pension account per member is very fair.

The removal of the restriction on contributions for those over 65 is welcome and long overdue.
The lifetime NCC cap is retrospective from 2007. So then should be the ability to aggregate unused concessional caps be made retrospective to 2007.
The fact that it isn't demonstrates that this is actually not about fairness but about higher tax.
And can anyone explain to me why it is that deductions for super contributions are capped, yet deductions for negative gearing are not?
Negative gearing is systematically rorted when property owners charge less rent (for their own reasons), and require the taxpayer to contribute to the difference. This is effectively a taxpayer funded rent subsidy. I have seen individuals receive hundreds of thousands of tax refunds because they serially negatively gear. There should be a lifetime cap. But politicians won't touch this.

Nil tax on pension accounts was always very generous however this was coupled with the GST which was effectively there to capture retirees taxes at the consumption end rather than the saving end.
The real issue with the budget changes in superannuation for all advisers is that you can no longer rely on superannuation changes being 'prospective'.
We have always been wary of short sighted governments looking at the pool of super money and trying to shore up their abysmal fiscal policy by helping themselves to our savings.
Our retirees have saved their superannuation through periods of massive taxation (up to 60% at times) and the one thing we could fall back on when they questioned whether THEIR money would be there in retirement - especially when they were committing to lock THEIR money up for 20-30 years was that the government changes policy prospectively - you could 'trust' the rules as they were when you made your contributions.
This government has now set the precedent of 'retrospective' changes that no doubt many future govts will follow. Greedy self funded retirees who have sacrificed life style to save for their retirement and remove the strain on the public purse should be pilloried as selfish for making those sacrifices. These are the same people who contributed most to Australia's taxation revenues through their working lives.
I would challenge any adviser to look a 40 year old client in the eye and tell them to lock their money up for the next 25 years and trust the government to leave their retirement funds alone.
The current changes will effect only a small number of clients immediately, though the Non-concessional caps will impact most severely on the 50 and above age groups, who have finally reached a time in life when they can start funding their retirements properly. It should however send a very significant warning to all advisers and clients that it is likely to be just the first grab..

The facts are that in the 1950s after I left school the top marginal rate was 75%.
From the mid 1950's to the late 1970's the top marginal rate was from 66% to 69%.
On top of that we paid (unseen) wholesale sale taxes of on average 15%. My wife and I NEVER got Child endowment, parenting allowances, maternity allowance, first housing assistance, nor any Govt support while bringing up our now 50 year old daughter.
And this rapacious Govt is now socking us because we saved well and sacrificed for our retirement and Scott says it is only fair if we and others our age share the burden NOW.
Meanwhile the "young" continue to enjoy millionaire lifestyles propped up with Govt handouts and scream because they find buying a home difficult.
Give us a break!
Stop hitting those who have built this country through hard work and sacrifice! Or is that too difficult a political sell? In fact, just knock us off and we will not be a "burden" with our high super balances!

As an adviser for the last 15 years I have never seen so many changes to super in one budget, that are so detrimental. Removal of anti detriment payments, (you won't see big retail super funds or Union funds complain about that) a lifetime cap from budget night, reduction of concessional contributions the list of goes on. They've really hit the honey pot this time around. Near or recent Retirees seem an easy target.

Getting rid of the 10% test for super & allowing super contributions to age 75, irrespective of a worktest, are excellent initiatives, & should have been introduced a decade ago. However the issue is that aspirational voters have been advised by Scott Morrison that $1.6 million in a tax free pension fund can produce up to 4 times the age pension, but in the same breath he won't let them contribute more than $500,000 in after tax contributions [if you are starting from scratch]. It’s a bit like giving someone a two car garage, but then not allowing them to have an auto garage door remote to use it. Unbelievable.

In my opinion introducing tax free earnings in pension accounts was always too generous. They did it at the same time as removing any tax on money coming out of super after age 60, those 2 changes were never going to be sustainable. They should have just bitten the bullet and reinstated 15% earnings tax on all money in super and pensions whether TTR's or not. Sure people would complain but at the end of the day they are only paying tax at a rate of 15%, what else are they going to do.....put it into property and pay income tax rates on the rent? That one change would probably produce more revenue than the other silly changes they are looking at making. On the positive for us Financial Planners there's no way any average person will be able to understand what they can and can't do with super so we'll get a lot more work.

The generosity "problem" has been solved with the new $1.6 million pension cap. The new problem is how to get $1.6 million into super - for many aspirational voters, its pretty much impossible.

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