The Barefoot Investor has dished out a blunt message to a woman with millions of dollars in her super fund after receiving a tense letter from her daughter about changes to 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 identified herself as Linda, said her mother was ‘distressed’ about the upcoming changes to superannuation.
Prime Minister Anthony Albanese and Treasurer Jim Chalmers announced in February plans to double the tax rate on money going into super funds from 15 to 30 per cent for Australians with more than $3million in their account.
The changes won’t come into effect until July 1, 2025 – after the next federal election.
A woman wrote to the Barefoot Investor criticising the federal government’s proposed changes to superannuation tax (stock image pictured)
In the letter, published in Pape’s weekly column, Linda said her mum was a widower who had ‘worked hard all her life, saving like crazy to ensure she had a secure retirement…and to leave a tidy nest egg for her kids’.
She went on to say her mother was ‘a smidge over the $3 million cap,’ as pointed out by her accountant.
‘But here is my question,’ she continued.
‘What the [expletive] is the Labor Government thinking about attacking the little nest eggs of ordinary Australians? And what the [expletive] is anyone doing about it?’
Linda said the changes were ‘not fair’ and thanked Pape for listening as ‘no-one else seems to’.
Pape (pictured right) conceded the retiree was going to ‘be absolutely fine’, but pointed out than many other Australians should be worried about further changes to superannuation
Pape began his reply by appearing to be empathetic toward the woman’s concerns.
‘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,’ he wrote.
‘After all, she could have just peed all her money against the wall and retired on the full pension, right?’
Pape acknowledged that while the above was true, Linda’s mother was far from being an ‘ordinary Australian’ with a ‘little nest egg’.
‘She’s got more cheese stuffed in her super than 99.5 per cent of the population,’ he said.
Last month , Prime Minister Anthony Albanese (pictured) announced plans to double the tax rate from 15 to 30 per cent for Australians with more than $3million in their super, from July 1, 2025
‘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 $3m balance into another low-tax environment’.
Pape conceded the retiree was going to ‘be absolutely fine’, but pointed out that many other Australians should be worried the government’s move was the ‘thin edge of the wedge’.
‘So, is the media right? Is the Government really aiming to come after your super?’ he asked.
‘Bloody oath they are!’
Pape went on to say governments would continue to raise taxes because Australia has a rapidly ageing population.
Pape said governments will continue to raise taxes as the population ages
‘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,’ he said.
Pape said the government wasn’t ‘attacking the little nest eggs of ordinary Australians’ as Linda had suggested.
‘It’s just that the government isn’t in the business of providing a tax haven for wealthy people,’ he said.
‘Or helping your mum provide a tax-effective inheritance for you’.
Pape pointed out the median super balance for Aussies 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’s tough.’
Labor this week struck out any speculation of further superannuation raids.
Finance Minister Katy Gallagher told the Senate on Wednesday the government has no plans to implement further changes to super policy.
‘The government has made clear this is the only change to superannuation,’ she said, noting the proposed policy will not take effect until after the next federal election.
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