As a self-funded retiree, I have worked many long hours away from my family at significant personal anguish to achieve financial independence in our retirement. We are not considered financially well off, but ‘comfortable’. Irrespective of whether one is to attribute the loss of my ‘earnings’ to the GFC, bad fiscal mismanagement on behalf of the incumbent government, declining interest rates, [they] all contribute to continue to erode my ‘earnings’. I cannot improve my financial situation that is continuing to be eroded year on year that is outside of my control and I accept full responsibility for current SMSF earnings that I can manage and is within my control. We have what we have, we do not receive any commonwealth or state benefits and yet we constantly have governments meddling in superannuation aspects that will further erode earnings. I acknowledge that superannuation funds now exceed bank deposits in total and that governments cannot help themselves and want further access to our funds. LEAVE SUPERANNUATION alone and especially SMSFs in retirement in any shape or form. Our standard of living is declining due to reduced earnings from the SMSF and apart from being the largest percentage of eligible voters, you will force many current SMSF retirees to then become a financial burden on government, which then creates further financial pressure on government.
Bernie T, Australian SMSF Members Association (ASMA) member
In August 2013, only weeks out from the federal election, we asked our members what advice they would give the government and opposition in terms of SMSFs and the response above was typical of the fear many of our members have that the government, whether it is the current or a future government, will change the rules to their detriment.
The fact it is a discussion point when the Abbott government promised no changes during the first term of office is a point of great concern – tax review or otherwise.
As noted by member Bernie T above, people have gone without and made a sensible choice to do their own thing for themselves and their family by establishing and running an SMSF, and for politicians to make changes when people are fully supporting themselves and not living off welfare is, in simple terms, unfair and makes our members’ blood boil.
From that one survey we had more than 300 heated responses and we will survey our members again if any changes are proposed as their quality of life is under threat. And it is not just SMSF members who are affected.
There are also many millions of retirees in industry superannuation funds and retail funds who will be equally affected. So although we are speaking as the voice of SMSF members, we are reaching out for the broader group of superannuation members who have no representative voice.
Cooperation from professional associations needed too
It is also way off the mark when associations of professionals who make their living off servicing superannuation members, including SMSF members, make statements from ivory towers on the size of superannuation benefits, need for cutbacks, making changes to the borrowing rules and other such comments. As one of our members put it when asked in a survey on comments made by various associations on changing the borrowing rules: “Associations and vested interests get their way usually to the detriment of most SMSFs.”
A number of members of these professional associations have complained to us that the comments made are not representative of the vast interests of the professionals and could be professionally and commercially damaging. At the end of the day, they are left wondering whose purpose the statements really serve.
Superannuation is a trust thing
Superannuation is a long-term investment and with 9.5 per cent of salary and wages plus additional voluntary contributions going into compulsory retirement income savings structures, it is vital for the system to be stable and, more importantly, trustworthy. Erode that trust and a government will find itself with a significant group of disgruntled voters. One of our members suggested the following unique solution: “The government and the opposition need to get together and create an independent commission to look after super, and future policies should only be made with bipartisan agreement. You cannot trust any one party with the vast wealth of the super industry.” Importantly, our members want a seat at the table for any government reviews where matters concerning their superannuation and SMSFs are being raised. Through surveys and ASMA representation, their voices can be heard and their concerns allayed.