Barefoot Investor Scott Pape: What’s the Labor Government doing attacking nest eggs of ordinary Australians?

Linda asks: I’m writing on behalf of my mum, who is distressed about the upcoming changes to superannuation. She is a widow who has worked hard all her life, saving like crazy to ensure she had a secure retirement (believing it was her responsibility not to be a burden to society via the pension) and to leave a tidy nest egg for her kids.

Mum has been advised by her accountant that she is a smidge over the $3 million cap; once he wraps his head around the changes he will, I’m sure, offer her excellent advice on how to proceed. But here is my question: what the …. is the Labor Government thinking about attacking the little nest eggs of ordinary Australians? And what the …. is anyone doing about it? It appears that, despite negative press attention, the changes are going full steam ahead. It’s just not fair! Thanks for listening, Scott, as no one else seems to be hearing our small voices of protest.

Barefoot responds: I’m sure your mum must feel like she’s being unfairly targeted and her only “crime” was that she worked hard, saved harder, and made savvy financial decisions. After all, she could have just peed all her money against the wall and retired on the full pension, right?

Well, that’s true.

Yet what’s also true is that your mother is not “an ordinary Australian” and she does not have a “little nest egg”. She’s got more cheese stuffed in her super than 99.5 per cent of the population!

And besides, as you’ve said, she has access to an accountant who will dutifully work out a way to siphon that “smidge” of the tax-affected part of her $3 million balance into another low-tax environment.

So she’s going to be absolutely fine.

However, what most Australians are really worried about — and what the media has jumped on — is whether this move by the Government is the thin edge of the wedge.

So, is the media right? Is the Government really aiming to come after your super?

Bloody oath they are!

Yet that’s hardly breaking news. After all, with each passing year, politicians — on both sides — have made super less attractive.

Especially for higher income earners. They’ve deliberately limited the amount you can put in each year and how much you can keep in there, and now they’re upping the taxes.

My take?

They’ll keep doing it.

Reason being, Australia has a rapidly ageing population. Looking after old people is expensive. As are programs like the NDIS. Someone needs to pay for it, and the heavy lifting will come from the wealthiest people in our country.