How an Auditing Expert is Using TikTok to try and Stop the Federal Government’s Proposed Changes to Super
An auditing expert has taken to the ‘young-people’s medium’ – TikTok – in a bid to educate the younger generation about the Federal Government’s planned changes to Australia’s superannuation system.
Naz Randeria isn’t looking to become an influencer, but rather the self-managed superannuation and auditing expert passionately believes the changes will undermine the superannuation system more broadly and believes not enough people care or even understand the proposal.
“It’s been almost 12 months since the changes were first announced, and I think too many people have dismissed the measures as only having an impact on the so-called rich.”
“In reality it’s the younger generation who need to be taking notice, because they’re the ones with the most to lose.”
The TikToks explain the proposed changes, which will double the tax rate for earnings on superannuation balances above $3 million and tax unrealised capital gains, and highlighting Ms Randeria’s concerns.
“These measures will fundamentally change what is one of the best superannuation systems in the world, and it’s the current generation of young workers who will wear the burden.”
“By doubling the tax rate and introducing an entirely new concept of taxing unrealised gains, it creates a disincentive to save and will see more people need to rely on the Age Pension in their retirement.”
“That’s a significant cost burden for the future generation of taxpayers to have to fund.”
Ms Randeria admits using TikTok is outside her comfort zone, but she believes it’s the only way to make younger people take notice.
“Unfortunately, superannuation is flagged as too boring, or too hard for people to understand – so I’m hoping by taking to TikTok I can simplify the information and make more people realise that they should care about what happens to their money.”
Ms Randeria says there are a number of reasons why the younger generation should be concerned at the proposal;
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Threshold is Not Indexed: The $3 million figure is unindexed and fails to take into account future inflation, wage rises, regional disparity, the increased cost-of-living and Australians increased life expectancy, all of which will result in a greater number of people breaching the cap and being penalised in future, through no fault of their own.
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$3 Million Won’t be ‘Rich’ in Years to Come: In the same way that $1 million was considered a significant sum of money in previous decades, having a retirement nest egg of more than $3 million dollars is likely to be considered modest by the time those currently in their 20’s are retiring, some 40 years from now.
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Retirement Uncertainty: How can today’s younger generation truly plan for their retirement when there’s no guarantee the goal posts won’t shift again in future, especially as the current proposed measures are likely to result in increased Government spending on the Age Pension, and will have a significant impact on the Australian budget?
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Taxing Unrealised Gains: There is currently not a single investment product or structure in Australia where unrealised gains are taxed - including family trusts or corporate entities. Introducing it into superannuation sets a dangerous precedent for expansion in future, especially if the tax fails to generate estimated revenue.
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Finite Tax: The proposed tax will only generate forecast revenues if people continue to have balances above $3 million. If people divest and remove their funds to avoid breaching the threshold, and the tax no longer generates expected revenues, future Governments will be left to deal with the budget implications – meaning today’s young taxpayers will foot the bill and likely face further changes to the superannuation system. Ms Randeria says there is a disconnect between most Australians and their superannuation accounts, and that needs to change.
“The fact there’s $16 billion in lost and unclaimed superannuation in Australia just highlights that too many people aren’t engaged with their super, they’re not checking statements, they’re not paying attention to where the money is, and that needs to change.”
“It’s your money sitting in the account, you should absolutely care what happens to it. Particularly for the younger generation who still have another 40 years of working life and super accumulation ahead of them.”
“That’s why it’s so important that people understand what changing the superannuation system will mean for their future.”
Ms Randeria has been actively campaigning against the Federal Government’s proposed changes since they were announced last year, and as well as the TikTok series is also preparing a submission to the Senate Economics Legislation Committee, with a report due in April.
About Reliance Auditing Services
Reliance Auditing Services is a specialist independent auditing services firm, specialising in audit of self-managed superannuation funds and also providing external audit and assurance services to clients across Australia. The team offers more than 25 years’ experience across a diverse range of businesses and organisations.
