The Barefoot Investor has sent a strong message to a woman with millions of dollars in her superfund after receiving a tense letter from her daughter about changes in tax policy.
Scott Pape, better known as financial guru The Barefoot Investor, responded to a message from a woman seeking advice on behalf of her retired mother.
The woman, who gave her name as Linda, said her mother was “distraught” about the upcoming changes to retirement.
Prime Minister Anthony Albanese and Treasurer Jim Chalmers announced plans in February to double the tax rate on money going into superfunds from 15 percent to 30 percent for Australians with more than $3 million in their account.
The changes will not take effect until July 1, 2025, after the next federal election.
A woman wrote to Barefoot Investor criticizing the federal government’s proposed changes to the retirement tax (file image pictured)
In the letter, published in Pap’s Weekly ColumnLinda said her mother was a widow who “worked hard all her life, saving like crazy to make sure she had a secure retirement … and to leave a tidy nest egg for her children.”
He went on to say that his mother was “a whit over the $3 million limit,” as noted by his accountant.
“But here is my question,” he continued.
‘What (expletive) is the Labor government thinking about attacking the small savings of ordinary Australians? And what (expletive) is anyone doing about it?
Linda said the changes were “not fair” and thanked Pape for listening like “nobody else seems to.”
Pape (pictured right) conceded the retiree was going to be “absolutely fine” but noted that many other Australians should be concerned about further changes to the pension.
Pape began his response by appearing to be empathetic to the woman’s concerns.
“I’m sure your mother must feel she is being unfairly targeted…and her only ‘crime’ was that she worked hard, saved more and made smart financial decisions,” he wrote.
‘After all, he could have thrown all his money against the wall and retired on a full pension, right?’
Pape acknowledged that while the above was true, Linda’s mother was far from an ‘ordinary Australian’ with ‘little savings’.
“She has more stuffed cheese in her supermarket than 99.5 percent of the population,” he said.
Last month, Prime Minister Anthony Albanese (pictured) announced plans to double the tax rate from 15 to 30 percent for Australians with more than $3 million in their super, starting July 1, 2025.
“And also, as you’ve said, she has access to an accountant who will diligently find a way to divert that ‘bit’ of the tax-affected portion of her $3 million balance to another low-tax setting.”
Pape conceded that the pensioner was going to be “absolutely fine” but noted that many other Australians should be concerned that the government’s move was “the thin edge of the wedge”.
‘So, is the media right? Does the government really intend to go after its superintendent? she asked.
“Dammit, they are!”
Pape went on to say that governments would continue to raise taxes because Australia has a rapidly aging population.
Pape said governments will continue to raise taxes as the population ages.
‘Caring for the elderly is expensive. Just like programs like the NDIS. Someone has to pay for it, and the heavy lifting will come from the richest people in our country,” he said.
Pape said the government was not ‘hitting the small savings of ordinary Australians’ as Linda had suggested.
“It’s just that the government is not in the business of providing a tax haven for rich people,” he said.
‘Or help your mother provide you with a tax-effective inheritance.’
Pape noted that the median superbalance for Australians aged 60-64 was just $139,056 for women and $180,928 for men.
“And many of these people will have to use their super to pay off their home loan when they retire,” he wrote.
‘Now that is difficult.’
This week, the job killed any speculation of more retirement raids.
Finance Minister Katy Gallagher told the Senate on Wednesday that the government has no plans to implement any further changes to the super policy.
“The government has made it clear that this is the only change in retirement,” he said, noting that the proposed policy will not take effect until after the next federal election.
